Global ETF News Older than One Year
China growth and eurozone debt woes batter risk assets
May 23, 2011--Markets are enduring a classic “risk off” session as traders are rattled by evidence of slowing growth in China and, particularly, the debilitating eurozone fiscal crisis.
The FTSE All-World equity index is down 1.7 per cent and industrial commodities are sliding. Wall Street is starting a fourth consecutive week of declines as the S&P 500 dropped 1.2 per cent and the FTSE Eurofirst 300 fell 1.7 per cent. Miners, financials and technology groups suffered selling.
Source: FT.com
ETFS Precious Metals Weekly: Gold Speculative Longs Clear Out
Gold price supported by deepening sovereign debt concerns.
Futures position clear out sparks first signs of bargain-hunting in silver.
Lonmin labor strike highlights ongoing PGM supply vulnerabilities.
May 23, 2011--Gold speculative long positions fall back to early 2011 levels. COMEX positioning data shows gold speculative long positions have dropped back to
early 2011 levels, indicating a good portion of the recent froth in the gold
market has cleared. This follows the recent clear-out of long silver positions.
Sovereign debt concerns returned to the fore last week as Fitch downgraded Greece’s long term debt rating to B+, S&P issued a downgrade warning on Italy’s debt, and Spain’s political leaders were punished at the polls. Weaker than expected global activity indicators added to investor concerns about the durability of the global recovery.
Platinum and palladium prices hurt by weak growth data, though labor strikes in South Africa highlight longer-term supply difficulties in the world’s largest platinum producing country.
Gold price supported by deepening sovereign debt concerns. In addition to Fitch and S&P’s European debt downgrades last week, the defeat of Spain’s incumbent political party in local elections highlights the difficulty government’s face in implementing the fiscal austerity in the face of high unemployment. US budget negotiations will likely thrust the US government debt picture into the spotlight this week. The US Treasury has warned Congress that it must raise the US government’s $14.3 trillion debt ceiling by August to avoid government debt defaults.
visit www.etfsecurities.com for more info.
Source: ETF Securities
Joint Associations Committee Releases Combined Principles for Retail Structured Products
May 23, 2011--The Joint Associations Committee on Retail Structured Products is pleased to announce it is reaffirming the set of principles for managing the provider-distributor relationship (PD Principles) in retail structured products and the principles for managing the distributor-individual investor relationship (DI Principles), originally published in July 2007 and July 2008 respectively.
The Principles were drafted with the intent of achieving fair treatment for individual investors and clarifying the respective roles and responsibilities of the various parties involved in the creation and distribution process. The years since 2008 have seen increased recognition by governments and regulators of the importance of a vibrant and well-functioning retail structured products market.
A combination of demographic trends and the impact of the financial crisis have resulted in a greater onus on individuals to take responsibility for their long-term financial planning and, in particular, to make private financial provision for their retirement. Retail structured products will play a key role in meeting such increased investment demand. However, the financial crisis has also impaired investor confidence. Such considerations have led to regulatory initiatives designed to improve investor protection in multiple jurisdictions.
view the Joint Associations Committee -Combined Principles For Retail Structured Products
Source: The Institute of International Finance
Big exchange mergers stopped in their tracks
May 20, 2011--With stunning speed, the week saw the unravelling of two large exchange mergers, casting a cloud over the wave of consolidation that has swept the business since October last year.
First, London Stock Exchange's attempt to forge an all-share merger with TMX Group, operator of the Toronto and Montreal bourses, was stopped in its tracks by a rival C$3.6bn bid from a consortium of Canadian banks and pension funds.
Source: FT.com
NYSE aids China with international board
May 20, 2011-- The New York Stock Exchange (NYSE) is working with China to launch the country's international board that will allow foreign firms to list on the mainland, in a move seen as a crucial step in developing its capital markets.
Chinese officials have yet to provide details of the international board, seen as a centrepiece in Shanghai's attempt to become an international financial centre by 2020, though they have said it could be launched later this year.
Source: FIN24
Oil prices steady, IEA warns on demand
May 19, 2011--Oil steadied on Thursday, as the International Energy Agency warned that high prices could threaten global economic growth and called for increased output to tackle the problem.Brent North Sea crude for delivery in July dipped five cents to $112.25 per barrel in London deals.
New York's main contract, light sweet crude for June, edged up one cent to $100.11 a barrel.
The IEA said that despite a recent 10% fall, oil prices remained high because of strong demand and geopolitical uncertainty - a reference to popular unrest in the Middle East.
Source: FIN24
Playing catch-up bolsters JSE
May 19, 2011--The JSE ended higher on Thursday, with local investors, who were off on Wednesday due to municipal election, playing catch-up to their global counterparts.
Stronger commodities and good earnings from companies such as SABMiller [JSE:SAB] helped lift investor spirits, said Kevin Algeo, portfolio manager at Imara SP Reid. On Wednesday, when the local market was closed for elections, global equities rallied.
Source: FIN24
In Which Exchange Rate Models Do Forecasters Trust? IMF Working paper
May 19, 2011--Summary: Using survey data of market expectations, we ask which popular exchange rate models appear to be consistent with expectation formation of market forecasters.
Exchange rate expectations are found to be correlated with inflation differentials and productivity differentials, indicating that the relative PPP and Balassa-Samuelson effect are common inputs into expectation formation of market forecasters.
view the IMF Working paper-In Which Exchange Rate Models Do Forecasters Trust?
Source: IMF
Coordinated Global Regulatory Reform for OTC Derivatives is Creating a New Interest Rate Swap Market, Says TABB Group
Alternative Ways of Managing Exposure See Renewed Interest
May 19, 2011 – Coordinated global regulation for the over-the-counter (OTC) derivatives markets is creating a dramatically different market for interest rate swaps with central clearing for end-users, the use of organised trading facilities and increased transparency and reporting requirements.
In new research published today, “The Changing Environment for Managing Interest Rate Exposure,” TABB Groupsays alternative methods of managing exposure will see greater adoption due to regulatory reform, specifically in the US and Europe where efforts will force standardized derivatives onto trading facilities with central clearing. This will create a new trading landscape for OTC interest rate swaps (IRS).
“New central clearing requirements for end-users such as asset managers and hedge funds will require these clients to post initial margin and variation margin, substantially raising the cost of doing business particularly for longer dated instruments,” says Andy Nybo, a TABB principal, the international advisory and research firm’s head of derivatives and author of the new reportAs transaction costs and other expenses associated with margin and capital requirements rise, TABB believes that market participants will be prompted to search for alternative methods of managing their interest rate exposure.
Source: TABB Group
Emerging market investors should avoid BRICs – Cambridge Associates
May 19, 2011--Institutional investors, including pension funds, with allocations to emerging markets of more than 5% should focus away from BRICs in an approach that replicates their diversified exposure to developed markets, according to Cambridge Associates, a consultancy.
A paper on "making emerging market exposure more like developed market exposure" claimed that adopting long-only strategies focused on BRIC markets and "multinationals like Gazprom and Samsung" that happen to be in emerging markets meant investors would miss opportunities in smaller companies that are more directly exposed to emerging market growth.
Source: IP&E
