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Special Report- ETFs in China
May 23, 2013--The China ETF is space is in the midst of a growth spurt with the range of products on offer undergoing a rapid expansion and investor interest in index funds continuing to grow both domestically and abroad.
China's proactive reformist regulators are encouraging innovation on all fronts and view ETFs as a convenient vehicle to bring capital into the market from overseas, while at home providing growth opportunities for the maturing fund management industry and raising the sophistication of retail investors – a problem which has long dogged the domestic investment space. From the point of view of investors meanwhile, ETFs continue to offer an efficient means to tap otherwise inaccessible growth trends as a vehicle for cross-border access or for honing in on specific domestic sectors.
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Source: IP&E
Japan delays cross-border rules amid US and European uncertainty
Equivalence and substituted compliance issues must be resolved quickly, or financial markets will be affected, says Kono at Japan FSA
May 23, 2013--Japan is delaying its cross-border clearing rules to avoid adding to the "tremendous uncertainty" created by the US and Europe over this issue, according to Masamichi Kono, vice-commissioner for international affairs at the Japan Financial Services Agency (JFSA).
The JFSA wants to establish its own set of cross-border rules, and extend clearing beyond the current interest rate swap and credit default swap remit, but is conscious of inconsistencies in the approaches of global regulators, Kono says.
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Source: Centralbanking.com
US's KraneShares thinking outside the 'ETF in a box'
May 23, 2013--US exchange traded fund manager KraneShares is preparing to launch a suite of funds after cutting ties with ETF incubator Exchange Traded Concepts.
Krane, which is specialising in China investments, has filed registration statements for nine ETFs since April under its own exemptive relief.
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Source: FT.com
Bank of Japan vows market steps to curb bond turbulence
May 22, 2013--The Bank of Japan vowed on Wednesday to take necessary steps to reduce volatility in bond markets that has threatened to jeopardize the government's fight to end deflation and revive growth.
The central bank upgraded its assessment of the economy for a fifth straight month, saying it "has started picking up," as Prime Minister Shinzo Abe's policy prescription of aggressive fiscal and monetary stimulus has boosted sentiment and a weaker yen has halted a decline in exports.
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Source: Reuters
BlackRock taps Asia with property deal
May 21, 2013--BlackRock has planted a flag in Asian property by buying MGPA, a Singapore-based private equity firm, in a deal that highlights investor demand for assets that offer steady income and protection against inflation.
The deal for MGPA, which began life as the property investment division of Australia’s Macquarie Group, will almost double the size of BlackRock’s property arm to $25bn in assets under management.
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Source: FT.com
Deutsche Bank- Synthetic Equity & Index Strategy-Global-ETF Handbook Series-Accessing Asia through ETFs
May 21, 2013--A global guide for accessing Asian markets with ETFs
Asia-growth drivers of the world economy
Asia has assumed increasing importance in the world stage with its high GDP growth rates and stable economic outlook. In contrast to major western countries which have been impacted by the credit and financial crisis, Asian economies have maintained a relatively stable growth path in the past decade.
IMF data indicates that close to 35% of the world GDP is contributed by Asia, which has been consistently increasing in the past few years. The aggregate weight of Asian components in the MSCI ACWI has increased steadily from 13% in Dec 2001 to 20.6% in Apr 2013.
Growth rates for major Asian countries peaked in 2011 before trending lower in 2012. As per Deutsche Bank estimates, Emerging Asia could record a GDP growth rate of 6.8% in 2013. The GDP growth estimates for Asia top the US and Euro Area and bear a positive outlook for 2013-14.
Equity market performance – Broad Asian indices outperform major global benchmarks
Broad Asian equity indices like the MSCI AP ex JPY and MSCI EM Asia recorded growth of 21-22% in 2012 and outperformed major global benchmarks like the MSCI World and S&P500 which went up by 16% over the same period. As per Deutsche Bank analysts, this trend is expected to continue in 2013 with year end targets for Asian indices placed much higher than the major benchmarks; S&P 500: 1,625 (3% upside), STOXX 600: 315 (7% upside), MSCI China: 75 (28% upside), Sensex: 22,500 (17% upside)
Access to Asia through ETFs
ETFs offer an easy access to Asian markets which can otherwise be complex due to fragmented markets, each with their own set of regulations for investing. They can also serve as an important investment vehicle in countries with restrictive foreign access such as China and India.
Currently there are over 1201 listings (665 products) of Asia focused ETFs in 24 countries across the globe with combined assets of over $232.6bn. These ETFs have recorded YTD Cash inflows of $15.5bn.
Asia focused ETFs have witnessed a remarkable annualized growth of over 15% since 2006 which indicates a healthy rise in their adoption as an investment vehicle across the globe. In addition to strong growth in AUM, there has been a massive expansion in the number of products as well; from 97 in 2006 to 665 presently. This has been possible on account of a large number of ETF issuers coming to the market with product offerings focused on Asia. Vanilla ETFs dominate the product list but there is healthy presence of more sophisticated products as well, offering a choice of investment.
This report looks at the range of ETFs which offer access to Asia and highlights considerations for ETF investors seeking exposure to the Asian markets. We also provide a product directory of globally listed ETFs which have an Asia focus.
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Source:Deutsche Bank -Synthetic Equity & Index Strategy-Global
DB-Synthetic Equity & Index Strategy-Asia-Pac Weekly ETF Market Review-ETP AUM added $1.9bn, Cash flows moderate
ETP Weekly Cash Flows
Turnover Review
Assets under Management Review
request report Tokyo Commodity Exchange Monthly Foreign Customer Trades Hit All-time High In April view more
Yuanta JV plans Greater China ETF platform view more BPI pegs planned ETF to MSCI index “We are entering into a subscription agreement with them to be our index provider,” she added.
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May 21, 2013--Market Review
Last week, all the major markets in the Asia-Pacific region had mixed markets. Compared to the week before, from north to south:
Japan (Nikkei 225) +3.63%
Korea (KOSPI2) +2.48%
China (CSI 300) +2.02%
Hong Kong (HSI) -1.02%
Singapore (FSSTI) +0.16%
Australia (S&P/ASX 200) -0.49%
New Product Launch Review
The Asia-Pacific ETP flows during last week totaled +$333mn (+0.2% of AUM) vs. +$3.9bn (+2.7% of AUM) of inflows the previous week, setting the YTD weekly flows average at +$303mn (+$6.1bn YTD in total cash flows). Equity ETFs recorded inflow of +$287mn of inflows while fixed income ETFs registered inflows of +$46mn. Emerging Country equity ETFs witnessed the highest weekly cash flows of +$174mn among all the segments. ETPs offering exposure to China registered inflows of +$136mn while Japan witnessed outflows of -$83mn.
Asia-Pacific ETP turnover totaled $12.2bn for the last week, -1.2% down from the previous week’s total. Japan reached on the top of the turnover ranking with $4.1bn turnover, followed by China ($3bn), South Korea ($2.8bn) and Hong Kong ($1.6bn). Among equity ETFs, emerging country, leveraged long, Asia-Pacific developed country and short ETFs had total turnovers of $4.5bn, $2.7bn, $2.3bn and $0.6bn, respectively. Among the commodity asset class, turnover in gold ETPs totaled $345mn.
Last week, Asia-Pacific ETP AUM added $1.9bn, and ended at $153.8bn. On a year-to-date basis, Asia-Pacific ETP market is up by $17.9bn or 13.1% above last year’s closing.
Source:Deutsche Bank - Synthetic Equity & Index Strategy - Asia
May 21, 2013--The Tokyo Commodity Exchange, Inc announced today that the April 2013 monthly volume of customer trades (sell & buy) originating overseas marked all-time high with 2,244,433 contracts renewing the record made in February 2013
with 1,920,053 contracts. This volume accounts for 34.3% of total monthly trades recording the highest ratio.
Source: TOCOM
May 21, 2013--After launching a fixed income mutual fund in China, Taiwan's Yuanta will roll out a more unusual cross-border ETF, a big step forward for China, Hong Kong and Taiwan.
Taiwan's largest mutual fund house, Yuanta Securities Investment Trust, has partnered China Resources to set up a joint venture in Shenzhen and will launch a fixed income fund later this year.
Source: Asian Investor
May 19, 2013--AYALA-LED Bank of the Philippine Islands' (BPI) planned exchange traded fund (ETF) product will track the performance of the MSCI Philippines index, a senior bank official said.
“Our ETF product will replicate the performance of the MSCI Philippines index,” said Theresa Marcial-Javier, BPI senior vice-president and group head of BPI Asset Management and Trust Group, told reporters in Makati City on Thursday last week.
Source: Business World Online
