Global ETF News Older than One Year
IMF Paper-Managing Volatility in Low-Income Countries - The Role and Potential for Contingent Financial Instruments
March 19, 2012--Summary:The paper examines the case for contingent financial instruments for low-income countries (LICs), from both the market and official sector. These include commodity price hedging instruments, contingent debt instruments (commodity-linked bonds, deferred repayment loans), and natural disaster insurance, for example.
The paper considers the adequacy of the existing framework of ex post and ex ante support to LICs facing exogenous shocks, and examines the need for and possible constraints to greater availability of contingent instruments. Would there be a role for the international community, particularly the IMF and World Bank, in helping to address the constraints that limit development and use of these instruments?
Source: IMF
ETFS Precious Metals Weekly: Platinum Price Surges Past Gold as Cyclical Assets Rally on Macro Outlook
March 19, 2012--Gold price falls, platinum price rallies as global growth confidence continues to improve. The gold price fell to its lowest
level in two months last week as continued improvements in US
economic data and an increase in the Fed’s assessment of the
economic outlook cuased investors to reduce their expectations of
further near-term monetary easing.
While the recent price correction has pushed gold down below its 200-day moving average, underlying structural fundamentals supporting the gold price such as low real interest rates, currency debasement concerns, sovereign debt risks, emerging market central bank diversification of reserve assets into gold, rising China consumer and investor demand, have not changed. Perhaps not surprisingly, with confidence in a sustainable global growth rebound improving, cylically-sensitive precious metals such as platinum and palladium are benefitting, with the platinum price surging above the gold price last week for the first time in six months. As long as this growth optimism continues, the more cyclically sensitive precious metals will likely continue to outperform.
India doubles gold import duties in an attempt to slow rising current account deficit. India’s finance minister, in his budget speech, announced that the basic customs duty on standard gold coins and bars will be increased fom 2% to 4% in a bid to reduce the current account deficit. Mr Muherjee noted that ‘one pf the primary drivers of the current account deficit has been the growth of almost 50% in imports of gold and precious metals’. The rise in duties is expected to be passed onto consumers by jewellers and likely to be another constraint on the world’s largest jewellery market at a time when the Indian rupee is hovering near 2-month lows against the US Dollar.
Zimbabwe pushes ahead with ‘indigenisation’ plans. Impala Platinum’s Zimbabwean subsidiary, Zimplats, has agreed to transfer a 51% stake to local indigenous groups and the government after a threat by the government to nationalise the company. Platinum Group metals prices have remained well supported despite the selloff in both gold and silver in recent weeks.
visit www.etfsecurities.com for more info
Source: ETF Securities
Global economy on recovery path, risks remain--IMF chief
March 18, 2012--The global economy has stepped back from the brink of danger and signs of stabilisation are emerging from the euro zone and the United States, but high debt levels in developed markets and rising oil prices are key risks ahead, the IMF said on Sunday.
The global economy may be on a path to recovery, but there is not a great deal of room for maneuver and no room for policy mistakes," International Monetary Fund (IMF) Managing Director, Christine Lagarde, said in a speech in Beijing.
In a separate talk on the same day, Lagarde said that China's yuan could become a reserve currency in the future, adding that the country needed a roadmap for a stronger, more flexible exchange rate system
Source: Reuters
Dubai Gold & Commodities Exchange Weekly Market Commentary - March 18, 2012
March 18, 2012--Economic Data Overview
The largest rise in US consumer prices in ten months did not cause Treasury yield to rise. However strong jobs data and continued signs of growth in the US economy as well as concerns about the inflationary threat of energy costs saw US ten year yields make the most sustained advance in six years last week.
All markets are very nervous about inflation. The interest rate forward curve is now predicting a 25bp rise in US rates in the third quarter of 2013 instead of no change in rates until the final quarter of 2014.
The prospect of a further round of US quantitative easing now looks more distant. Growth is what the markets want to see out of the US but not inflation. The worst combination is limited growth and higher inflation, as the measures need to address inflation will suppress growth. With yields still not far from their all-time lows across the US yield curve, all the panic will be to upside inflationary shocks. Last year in crisis-torn markets the place to be was in the bonds and not stocks. This year equities are proving resilient as higher inflation may give companies the opportunity to grow margins. So far the official response is not to worry and the Fed suggests that the recent advance in energy costs will be temporary and overall inflation is expected to remain subdued.
Source: Dubai Gold & Commodities Exchange (DGCX)
Call to adopt US flash crash reforms globally
March 16, 2012--Reforms by the US authorities following the May 2010 “flash crash” should also be be introduced by other regulators, according to the International Organisation of Securities Commissions (Iosco), the umbrella body for the world’s market regulators.
In a consultation paper on exchange traded funds published on Wednesday, Iosco said ETF exchanges should consider adopting rules to mitigate the occurrence of liquidity shocks (such as the flash crash) and their transmission across correlated markets.
Source: FT.com
BRICS Exchanges To Cross-list Benchmark Equity Index Derivatives
March 16, 2012--Bombay Stock Exchange said the five of the world's leading emerging market indices would commence cross list their derivative indices on each other's trading platforms from March 30.
The cross-listing of benchmark equity index derivatives is likely to facilitate liquidity growth in the BRICS markets and will considerably strengthen their international position.
The derivatives to be cross-listed and offered in the local currency and local trading hours of each of the exchanges will include Brazil's IBOVESPA futures, Russia's MICEX Index futures, India's Sensex Index futures, Hong Kong's Hang Seng Index futures and Hang Seng China Enterprises Index futures, and South Africa's FTSE/JSE Top40 futures.
Further, JSE will also list options on the benchmark futures of the other four member exchanges.
Source: NASDAQ OMX
MAS signs MOU with European financial authority
March 16, 2012--The Monetary Authority of Singapore (MAS) has signed a Memorandum of Understanding (MOU) with the European Securities and Markets Authority (ESMA) on the supervision of credit rating agencies (CRAs).
The new partnership will pave the way for the enhanced sharing of supervisory information between the two authorities for more effective supervision of cross-border CRAs operating in Singapore and within the European Union (EU), MAS said in a statement released Friday.
It also provides a formal basis for supervisory cooperation between MAS and ESMA.
The CRAs play an important role in the global financial markets and have significant impact on market operations and investors confidence, MAS said.
Source: Channel News Asia
London Stock Exchange Group PLC is in talks with Singapore and Australia's exchanges
March 16, 2012--London Stock Exchange Group PLC (LSE.LN) is in talks with Singapore and Australia's exchanges about trading each other's blue-chip stocks, the Financial Times reported Thursday on its website, citing three unnamed sources.
Under the proposed arrangement, LCH.Clearnet Group Ltd.--the Anglo--French clearinghouse operator that LSE is finalizing the acquisition of--would act as clearinghouse for Singapore stocks traded in London, the report quoted the sources as saying.It would also clear U.K. stocks offered on Singapore Exchange Ltd. (S68.SG), the report said.
Source: Fox Business News
ESMA allows EU-registered CRAs to endorse credit ratings issued in the US,
March 15, 2012--ESMA today announces that it considers the regulatory frameworks for credit rating agencies (CRAs) of the United States of America, Canada, Hong Kong and Singapore to be in line with European rules.
The EU Regulation (EC) No 1060/2009 on Credit Rating Agencies1 requires ESMA to assess whether the requirements of third-country CRA regimes are “as stringent as” the European ones. Today’s announcement allows European financial institutions to continue using for regulatory purposes credit ratings issued in these countries after 30 April 2012.
ESMA’s assessment of third-country CRA regimes is an important tool for enhancing internationally consistent supervision of CRAs in the interests of protecting financial markets and investors in the EU.
For the endorsement by EU CRAs of credit ratings issued in non-EU countries, the ratings must be issued by CRAs that are registered or licensed and are subject to supervision in those countries. This is already the case for the USA and Hong Kong. In Canada2 and Singapore the registration of CRAs is at an advanced stage and we understand should be completed before 30 April 2012.
In order to facilitate regulatory information exchange and as a precondition to endorsement, ESMA has also entered into co-operation agreements for the supervision of CRAs with the national competent authorities of the USA, Canada, Hong Kong and Singapore.
Source: ESMA
US and European Corporate Bond Issuance is Set to Become Prohibitively Expensive for SMEs as Liquidity Concentrates in Major Names
Although $386Bn in Investment-Grade Bonds Were Issued in the US in the First 10 Weeks of 2012, Dealer Bond Holdings are at Their Lowest in 10 years, According to New TABB Group Research
March 15, 2012--Corporate bond coupons are set to be driven higher and issuance will become prohibitively expensive for SMEs (small and medium enterprises) as US and European regulatory change forces a liquidity crisis in secondary trading and activity concentrates
in only the largest, shortest bonds issued by the most trusted names, according to new research published today by TABB Group.
Regulators on both sides of the Atlantic are challenging the traditional principal-based, market-making model for corporate bonds, forcing an end-game where bonds will trade like stocks in a transparent, equity-like, exchange framework. “Short term, the effects of such wholesale change will be negative with secondary market liquidity damaged and more fragmented than it already is,” says Will Rhode, a London-based TABB senior analyst and author of “Corporate Bond Trading: Building Networks, Realising Liquidity.”
Source: TABB Group
