Global ETF News Older than One Year
Food Prices and Political Instability -IMF Working Paper
March 22, 2011--Summary: We examine the effects that variations in the international food prices have on democracy and intra-state conflict using panel data for over 120 countries during the period 1970-2007. Our main finding is that in Low Income Countries increases in the international food prices lead to a significant deterioration of democratic institutions and a significant increase in the incidence of anti-government demonstrations, riots, and civil conflict.
view the Food Prices and Political Instability IMF Working Paper
In the High Income Countries variations in the international food prices have no significant effects on democratic institutions and measures of intra-state conflict. Our empirical results point to a significant externality of variations in international food prices on Low Income Countries' social and political stability.
Source: IMF
Changes to NASDAQ OMX Indexes
March 22, 2011--
Semi-Annual Changes to the NASDAQ OMX Clean Edge Smart Grid Infrastructure Index
Semi-Annual Changes to the NASDAQ OMX CEA Smartphone Index
Semi-Annual Changes to the NASDAQ OMX Clean Edge Global Wind Energy Index
Quarterly Changes to the Wilder NASDAQ OMX Global Energy Efficient Transport Index
Source: NASDAQ OMX
Global Financial Centres Index 9 Published Today - "Asia - The MainArea for Growth"
March 21, 2011--Today the Z/Yen Group publishes the ninth Global Financial Centres Index (GFCI 9) covering 75 financial centres. The big change from GFCI 8 in September 2010 is that Hong Kong has clearly joined London and New York as one of the 'Big Three' Global Financial Centres. The main headlines of GFCI 9 are:
Asia continues to exhibit enhanced competitiveness with eight centres in the top twenty (against six North American centres and five European ones). In GFCI 1 (March 2007) there were just three Asian centres in the top twenty. Seoul was the largest riser moving into 16th place, up 25 points in the ratings;
there remains no significant difference between London, New York and Hong Kong in the GFCI 9 ratings; respondents continue to believe that these centres work together for mutual benefit; confidence amongst financial services professionals has fallen since GFCI 8, as shown by lower overall ratings - 47 centres have lower ratings in GFCI 9 with only 25 centres rated higher (three centres have the same ratings as in GFCI 8);
The Global Financial Centres Index 9 MARCH 2011 report
Source: Long Finance
IEA-Highlights of the latest Oil Market Report
March 20, 2011--Political unrest in the Middle East and North Africa, currently focused on Libya, has injected volatility into futures markets, with prices gyrating by an average $3/bbl daily. By mid-March benchmark crudes were trading $10-15/bbl above average February levels, with Brent last seen just shy of $114/bbl and WTI around $100/bbl.
Global oil product demand growth remains largely unchanged at 2.9 mb/d in 2010 and 1.4 mb/d in 2011, but high oil prices entail significant downside risks to this year’s outlook. Baseline changes in non-OECD Asia and stronger Middle East levels lift absolute demand slightly to 87.9 mb/d and 89.4 mb/d, in 2010 and 2011 respectively.
World oil supply rose to an all-time high of 89 mb/d in February, up 0.2 mb/d from January. Non-OPEC oil supply rose 0.3 mb/d to 53.2 mb/d on re-instated Alaskan output. 2010 non-OPEC estimates are left unchanged at 52.8 mb/d, while the 2011 forecast is raised by 0.1 mb/d, to 53.6 mb/d, on stronger-than-expected Canadian output.
Source: International Energy Agency (IEA)
FSB publishes peer review of risk disclosure practices in respect of exposures
March 18, 2011--The Financial Stability Board (FSB) published today a thematic peer review report of risk
disclosure practices by financial institutions in FSB member jurisdictions in respect of
exposures to structured credit products.
The recent financial crisis highlighted the importance to market confidence of firms making clear disclosures of their exposures to risks. The Financial Stability Forum (predecessor to the FSB) recommended, in its report on Enhancing Market and Institutional Resilience published in April 2008, improvements in disclosures about structured credit products and certain other risk exposures that were of concern to market participants in 2008.
This FSB report reviews both financial institutions’ public disclosures of these risk exposures as well as the actions undertaken by FSB member jurisdictions and the private sector participants to enhance disclosure practices. The review finds that FSB member jurisdictions have successfully prompted financial institutions to improve their disclosure of exposures to structured credit products. Most FSB members have also taken steps to implement enhanced Pillar 3 disclosures regarding securitisation and related exposures published by the Basel Committee on Banking Supervision in July 2009. More generally, standard setting bodies have improved their disclosure requirements for financial institutions in these areas in the wake of the financial crisis.
view the Thematic Review on Risk Disclosure Practices Peer Review Report Draft
Source: Financial Stability Board (FSB)
Imperfect Information and Saving in a Small Open Economy
March 18, 2011-- Summary: Emerging markets are more volatile and face different types of shocks, in size and nature, compared to their developed counterparts. Accurate identification of the stochastic properties of shocks is difficult. We show evidence suggesting that uncertainty about the underlying stochastic process is present in commodity prices.
In addition, we build a dynamic stochastic general equilibrium model with informational frictions, which explicitly considers uncertainty about the nature of shocks. When formulating expectations, the economy assigns some probability to the shocks being temporary even if they are actually permanent. Parameter instability in the stochastic process implies that optimal saving levels (debt holdings) should be higher (lower) compared to a process with fixed parameters. Imperfect information about the nature of shocks matters when commodity GDP shares are high. Thus, economic policies based on misperception of the underlying regime can lead to substantial over/under saving with important associated costs.
view IMF Working paper-Imperfect Information and Saving in a Small Open Economy
Source: IMF
Russell Launches New Global Index Series With Enhanced Investability - Index Series Complements Russell Global Index, Increases Liquidity For Tradable Products
Index series complements Russell Global Index, increases liquidity for tradable products
March 17, 2011-- Russell Investments announced today the launch of the new Russell Global 3000™ Index series of 18 indexes – all sub-components of the comprehensive Russell Global Index – for investors who seek enhanced tradability features for investment vehicles. The new series, which extends Russell's trademark U.S. market index naming method for the first time globally, features the Russell Global 1000™ Index and Russell Global 2000™ Index, as well as the Russell Global ex-U.S. variants and growth and value sub-component indexes.
Based on three decades of experience in innovative index design, which today accounts for $3.9 trillion in benchmarked assets, the new series uses the same global-relative methodology as the Russell Global Index. The new series also provides investors with exposure to the Russell Global investable universe through more liquid equity indexes with enhanced investability.
"The Russell Global Index comprehensively represents the investable global opportunity set," said Rolf Agather, managing director of index research & innovation at Russell Investments. "The Russell Global 1-2-3 series optimizes that broad universe to produce a smaller basket of stocks designed for passive investment while still closely tracking the Russell Global Index. Our widely-used benchmark products, which are broad, deep and descriptive of the investable market opportunity, now have a complementary series that offers the option of highly liquid indexes with reduced membership."
In order to offer optimized global exposure in convenient, smaller baskets, the Russell Global 1000 and Russell Global 2000 Indexes, for example, are comprised of a smaller number of large-cap and small-cap stocks, in order to represent the respective global investable market capitalization tiers. The 2,000 global small-cap stocks in the Russell Global 2000 Index, for example, are the largest members of the comprehensive Russell Global Small Cap Index, which comprises about 7,000 securities. Similar to the pattern for the U.S. benchmarks, the Russell Global 1000 Index and the Russell Global 2000 Index equal the Russell Global 3000 Index.
Source: Russell
EDHEC-Risk Institute announces the launch of EDHEC-Risk Indices & Benchmarks
March 17, 2011--EDHEC-Risk Institute has announced the creation of a spin-off, EDHEC-Risk Indices & Benchmarks, which aims to be one of the leading beta designers for the investment industry. EDHEC-Risk Indices & Benchmarks will be based in London, New York, Nice and Singapore and has recruited two experienced executives to spearhead business development in Europe and North America. Profiles of these new recruits, Eric Shirbini and Vijay Vaidyanathan, can be found overleaf.
Professor Noël Amenc, Director of EDHEC-Risk Institute and Chairman of EDHEC-Risk Indices & Benchmarks said, “EDHEC-Risk Indices & Benchmarks hopes to be perceived as a concept and implementation provider for smart beta. We believe that the index and benchmarking research that EDHEC-Risk Institute has conducted since it was founded in 2001 has led to a series of products that provide more efficient and more academic-based solutions to investors’ needs than the indices and benchmarks currently available on the market. EDHEC-Risk Indices & Benchmarks is the channel through which these solutions will be made available to the investment community.”
Source: EDHEC-Risk Institute
Pension reforms must deliver affordable and adequate benefits, warns OECD
March 17, 2011--Recent reforms will still be insufficient to cover increased pension costs in the future, despite increases in retirement ages in half of OECD countries, according to a new OECD report.
Pensions at a Glance 2011 says that by 2050 the average pensionable age in OECD countries will reach 65 for both sexes.
This represents an increase of about 1.5years for men and 2.5 years for women. But life expectancy is rising even faster, outstripping the increase in pension ages by about 2 years for men and 1.5 years for women.
This means that in all but five OECD countries the time spent in retirement will continue to grow. Recent reforms are a step in the right direction to rein in public pension spending rising as a result of population ageing. The size of the working-age population in the OECD will peak around 2015 and decline by over 10% in 2050. But governments should consider the impact of benefit cuts on the most vulnerable. Pension reforms in OECD countries since the early 1990s have reduced future benefits on average by 20 per cent.
view the Pensions at a Glance 2011: Retirement-Income Systems in OECD and G20 Countries
Source: OECD
Creditless Recoveries -IMF Working paper
March 15, 2011--Summary: Recoveries that occur in the absence of credit growth are often dubbed miracles and named after mythical creatures. Yet these are not rare animals, and are not always miracles. About one out of five recoveries is "creditless", and average growth during these episodes is about a third lower than during "normal" recoveries.
Aggregate and sectoral data suggest that impaired financial intermediation is the culprit. Creditless recoveries are more common after banking crises and credit booms. Furthermore, sectors more dependent on external finance grow relatively less and more financially dependent activities (such as investment) are curtailed more during creditless recoveries.
view IMF Working paper-Creditless Recoveries
Source: IMF
