Global ETF News Older than One Year
HSBC attempts to boost ETF liquidity
December 11, 2012--HSBC Global Asset Management has altered the business model of its exchange traded funds operations by adding a second official market maker who will help to improve the trading liquidity of its ETF range.
Susquehanna International Securities, one of the largest ETF traders in Europe, will provide continuous bid and offer prices for HSBC’s range of 25 ETFs, effectively providing competition to the bank’s own ETF market making activities, which are delivered by HSBC Global Markets.
Source: FT.com
Fund managers seek alternatives to automated trade-study
September 10, 2012--Almost a third of fund managers believe automated trading has had its day and are considering a move to alternative trading methods, including a return to "human-led trading models", a study released on Monday showed.
But any mistrust of automated trading by fund managers contrasts sharply with the attitude of brokerages and investment banks, where 67 percent of firms are looking to increase the use of automated trading.
Source: Reuters
Inflows Into ETFs and ETPs Resume as Uncertainty Diminishes
December 10, 2012--Despite a bumpy beginning to the month, by the end of November, assets in exchange-traded funds and other exchange-traded products had hit a record $1.9 trillion, according to data provided by ETFGI.
With at least some sources of market uncertainty removed, investors resumed investing in exchange-traded funds (ETFs) and products (ETPs) during November, contributing net new assets of $21.3 billion to these securities over the course of the month. That propelled assets in ETFs and ETPs to an all-time high of $1.9 trillion, with the lion’s share of that – or $1.3 trillion – invested in ETFs/ETPs in the United States.
Source: AlphaNow
BIS-December 2012 Quarterly Review: Policy measures and reduced short-term risks buoyed markets
December 10, 2012--Forecasts for global economic growth fell in the three months to early December, yet most risky asset prices increased. These prices benefited from further loosening of monetary policies and perceptions that some major near-term risks to the world economy had diminished.
Cross-border claims of BIS reporting banks dropped sharply between April and June, for the second time in three quarters. Interbank claims - especially inter-office positions - fell significantly, whereas claims on non-banks remained relatively stable. Banks from emerging market economies in Asia-Pacific largely filled the gap left by euro area and Swiss banks pulling back from lending to the region.
The OTC derivatives market continued to shrink. Notional amounts outstanding declined for the second half-year in a row, to $639 trillion at end-June 2012.
Source: BIS
ETF Securities-ETFS Precious Metals Weekly-A Temporary Identity Crisis for Gold
December 10, 2012--December 10, 2012--Diverging views of gold price outlook. While the gold price has rallied 6% in the last 6 months, futures market selling prompted a modest sell-off last week. Futures market selling stands in direct contrast to increased demand for gold from the ETP sector, with global ETP holdings rising last week to another all-time high of 84.5m oz.
Investors appear to be split across most asset classes, with both equity and bond markets posting gains last week. Given strong physical demand, we expect the gold price weakness to remain temporary. Investor demand for gold ETPs is likely to remain high as strategic investors use gold as a hedge against worst case outcomes from the fiscal cliff negotiations and European fiscal and debt problems. Italian Prime Minister Monti's threat over the weekend to resign (and his possible replacement by former Prime Minister Berlusconi) substantially adds to Europe's sovereign debt risk profile. In addition, the official sector continues to build gold positions to diversify reserves. South Korea's central bank bought around 14 tonnes of gold in November, a jump of around 20% in its holdings. With the US manufacturing ISM slipping back below 50 and US fiscal policy likely to tighten in 2013, the FOMC is likely to further ease monetary policy to ensure its target of lower unemployment is met. Therefore while a recovery in US growth in 2013 may cause real interest rates to rise and add headwinds to gold price performance, there are enough supporting factors to indicate relatively limited gold price downside. Meanwhile, there are many potential upside tail risks.
Euro and Franc weakness could have opposite impact on gold. The euro reversed earlier strength on the back of downward GDP growth forecast revisions by both the ECB and Bundesbank at the end of the week, with a strong US dollar putting downward pressure on the gold price. While the Swiss Franc (CHF) also weakened versus the US dollar after Swiss banks started to charge negative interest on deposits, ultimately this could potentially benefit gold demand, as defensive investors begin to incrementally prefer gold over the CHF as their wealth preservation currency.
Further signs of recovery in the US may support cyclical precious metals. The US economy added 146k jobs in November, beating expectations that were tempered by Superstorm Sandy that hit the east coast last month. More jobs were added in November than October (although the October figure saw a large downward revision). If the US can avoid a worst-case fiscal-cliff induced recession next year, white precious metals silver, platinum and palladium may outperform, given their gearing into the global industrial cycle.
Key events to watch this week: FOMC meeting and US fiscal negotiations. Given the lack of progress in US budgetary discussions, the Fed is likely to continue to support loose monetary conditions to counter weak business investment. Announcements of new bond purchases to replace "Operation Twist" flows will likely be taken positively by gold investors.
Visit www.etfsecurities.com for more info.
Source: ETF Securities
NYSE Euronext Monthly ETF Activity Report -November 2012
December 10, 2012--Listings
November 2012 saw a total of three new ETF listings from two different issuers: 1 ETF from ThinkCapital and 2 ETFs from Lyxor:
ETF Symbol: TAT
Listing date: 26/11/2012
ETF Trading name: TC iAAT
Underlying index: iBoxx Gov AAA-AA 1-5 Index
ETF Symbol: LVX
Listing date: 30/11/2012
ETF Trading name: Lyxor ETF VIX USD
Underlying index: S&P 500 VIX Futures Enhanced Roll
ETF Symbol: LVO
Listing date: 30/11/2012
ETF Trading name: Lyxor ETF VIX EUR
Underlying index: S&P 500 VIX Futures Enhanced Roll
At end of November, NYSE Euronext European markets had 680 listings of 590 ETFs from 16 issuers.
Trading activity
Average daily value traded on-book in November of €210.4 million, down 7.43% MoM.
Total value traded on-book amounted to €4.63 billion, down 20.61% vs. YTD Average.
Average of 6,213 on-book trades (single-counted) executed daily last month, a decrease of 43.3% vs Novemberber 2011, and up 2.3% MoM.
Total of €663.0 million exchanged in block trades in November, down 10.42% from the €740.1 million in October.
Overall, block trade volume represented 14.32% of total regulated market ETF trading activity on NYSE Euronext.
Assets Under Management (AUM)
At the end of Novemberber 2012, the combined AUM of all ETFs listed on the NYSE Euronext European markets totalled €154.0 billion, up 7.65% YTD.
Market Quality
2 LPs took on liquidity responsibilities for 8 additional LP contracts on 8 different ETFs:
IMC FINANCIAL MARKETS started activity on 6 new ETFs: 2 Amundi ETFs, 1 CS ETF, 1 db-x tracker, 1 iShares ETF and 1 Lyxor ETF.
FLOW TRADERS took the lead on the new ThinkCapital ETF while also adding 1 CS ETF to their list.
Median spread for all listed ETFs of 35.7 bps.
23 Liquidity Providers currently active on ETFs.
view the EU ETP Monthly Activity Report
view US ETP Monthly Flash report
Source: NYSE Euronext
Thomson Reuters Announces Findings of its Annual Sukuk Perceptions and Forecast Study
Global captive sukuk demand is expected to almost double from $240 billion in 2012 to reach $421 billion by 2016
December 10, 2012-- Thomson Reuters today released the findings of a Sukuk Perceptions and Forecast Study conducted by Thomson Reuters and Zawya in November 2012.
The study centres around a survey of sukuk lead arrangers and investors conducted in August and September 2012. The primary empirical data gathered from the survey was subsequently developed to provide forward-looking analytics on the appetites and preferences of sukuk investors for 2013 and beyond.
According to the study, global captive sukuk demand is expected to double from $240 billion in 2012 to reach $421 billion by 2016. Supply is also forecasted to grow but the spread between demand and supply is expected to widen even further to more than $280 billion within the next four years.
Source: Thomson Reuters
NASDAQ OMX Acquires 25% of Dutch Derivatives Trading Venue TOM
December 10, 2012--NASDAQ OMX Group, Inc. (Nasdaq:NDAQ) today announced the acquisition of 25 percent of the Dutch cash equity and equity derivatives trading venue TOM, The Order Machine. The agreement also includes an option for NASDAQ OMX to acquire an additional 25.1 percent of the remaining shares and secure a majority stake in TOM.
The transaction provides TOM global reach and scale and delivers on NASDAQ OMX's strategy to expand its derivatives presence across the European market. The current owners will remain shareholders, and as co-owners BinckBanck will provide order flow and Optiver and IMC will provide liquidity in the Dutch market. The fourth co-owner ABN AMRO will also connect to TOM.
Source: NASDAQ OMX
Former iShares boss returns to ETF arena
December 9, 2012--Lee Kranefuss, a former head of iShares, the world's largest exchange traded funds manager, has been appointed by Warburg Pincus to lead the $30bn global private equity group's expansion into the ETF market.
Mr Kranefuss was the chief executive officer of iShares from its launch in 2000 under the watch of Barclays Global Investors until 2010 when the business had accumulated assets of more than $600bn.
Cary Davis, managing director at Warburg Pincus said Mr Kranefuss has been hired to evaluate opportunities in ETFs,
Source: FT.com
Backroom dealing exposed
December 9, 2012--Large asset management groups appear to be routinely co-ordinating internal trades in order to protect funds that are suffering heavy redemptions from being forced to sell stock at fire-sale prices.
The findings raise serious questions as to whether fund managers engaging in such “backroom dealing” are violating their fiduciary duty to their own investors by buying stock in order to aid a colleague.
Source: FT.com
