Global ETF News Older than One Year
IMF Publishes First Worldwide Survey of Foreign Direct Investment Positions
December 22, 2010--The International Monetary Fund (IMF) today released results from its inaugural Coordinated Direct Investment Survey (CDIS), the first worldwide survey of foreign direct investment positions. The results, published as an online database, cover investment positions at end-2009 for 72 participating economies. The survey will be carried out annually and the intention is to broaden coverage in terms of both geographical representation and breakdowns of the data.
“Policymakers and analysts will find the CDIS database an invaluable tool in assessing the patterns and volumes of foreign direct investment as well as the increasing interconnectedness of economies,” Ms. Adelheid Burgi-Schmelz, Director of the IMF’s Statistics Department, said after the launch.
Foreign direct investment (FDI) is cross border investment where a resident in one economy has control or a significant degree of influence on the management of an enterprise resident in another economy. This category of investment is of large and growing importance, increasing the need to improve data about it. In 2006, the IMF’s Committee on Balance of Payments Statistics endorsed the CDIS proposal, and the IMF began work on the project after formally deciding to proceed in March 2007.
Source: IMF
BlackRock New Report * ETF Landscape Industry Highlights, End of November 2010
December 22, 2010--At the end of November 2010, the global ETF industry had 2,422 ETFs with 5,413 listings and assets of US$1,231.0 Bn, from 133 providers on 46 exchanges around the world.
Additionally, there were 1,039 other Exchange Traded Products (ETPs) with 1,747 listings and assets of US$161.4 Bn, from 54 providers on 22 exchanges.
Combined, there were 3,461 products with 7,160 listings and assets of US$1,392.4 Bn, from 165 providers on 50 exchanges around the world, at the end of November 2010.
Source: Global ETF Research & Implementation Strategy Team, BlackRock
China extends help to tackle euro crisis
December 21, 2010---- China has promised to take further "concerted action" to support European financial stabilisation, including continuing to buy the bonds of countries at the centre of the sovereign debt crisis, according to senior European officials.
The officials, who declined to be named because of the sensitivity of the issue, said one of China's vice-premiers Wang Qishan, whose responsibilities include oversight of the economy, had given assurances that China would step up support for European stabilisation efforts "if necessary".
Source: CNN
Copper price at record on supply concerns
December 21, 2010--Copper prices hit an all-time high on Tuesday well above the key $9,000 a tonne level, after the world’s third largest mine of the red metal halted exports after an accident.
The jump in copper prices came amid a broader rally in commodities prices, with the cost of cotton hitting a fresh all-time high and the price of high quality coffee surging to a 13½-year peak.
Source: FT.com
What Caused the Global Financial Crisis - Evidence on the Drivers of Financial Imbalances 1999 - 2007-IMF Working Paper
December 20, 2010--Summary: This paper investigates empirically the drivers of financial imbalances ahead of the global financial crisis. Three factors may have contributed to the build-up of financial imbalances: (i) rising global imbalances (capital flows), (ii) monetary policy that might have been too loose, (iii) inadequate supervision and regulation. Panel data regressions are performed for OECD countries from 1999 to 2007, so as to shed light on the relative importance of these factors, as well as the extent to which these factors might have interacted in fuelling the build-up.
We find that the build-up of financial imbalances was driven by capital inflows and an associated compression of the spread between long and short rates. The effect of capital inflows on the build-up is amplified where the supervisory and regulatory environment was relatively weak. We find that, by contrast, differences in monetary policy cannot account for differences across countries in the build-up of financial imbalances ahead of the crisis.
Source: IMF
U.S. Leveraged Finance Multiple EV-aluator
December 20, 2010--Summary
In this introductory installment of its recurring valuation-focused special report series, Fitch Ratings provides a summary of how market multiples (enterprise value [EV]/EBITDA) for more than 400 high-yield issuers in the U.S. have tracked over time on an aggregated sector basis. The report highlights how these market multiples have compared with transaction multiples of publicly traded U.S. companies and with the
distressed valuation multiples employed by Fitch for purposes of its recovery analysis.
This report also provides a snapshot of how leveraged certain sectors are relative to their enterprise valuations assigned by the market, and in doing so offers an insight into how implied equity cushions have fluctuated through the credit cycle. Fitch’s key observations include the following:
Current market valuation multiples for most sectors have rebounded from their downturn lows with the revival in the equity markets. As expected, the highest swings in market valuation (as measured in terms of standard deviation) over the past decade have been witnessed in cyclical sectors such as homebuilding, technology, followed by media and entertainment. Curiously, though, the retail sector - also arguably subject to similar cyclicality forces ? emerged as the most stable in terms of market valuations across time.
This report also provides empirical evidence that supports a moderate deleveraging trend (relative to leverage levels in 2006) among speculative-grade companies in seven out of the 18 sectors. The chemicals sector, followed by energy and natural resources, delevered at a faster rate than their valuation multiples had compressed since 2006, contributing to enhanced equity cushions.
The recent resurgence in M&A activity has been spurred by an enabling environment of low bond yields, robust primary markets, reasonable corporate valuations, strong corporate cash balances (expected to be over $2 trillion), and limited organic growth prospects. As evident from the sector charts on pages 3-24, current transaction multiples for an overwhelming majority of sectors are still nowhere near their 2006-2007 peaks.
Source: Fitch Ratings
December 2010 Monthly Preliminary Performance Report Dow Jones-UBS Commodity Indexes
December 20, 2010--The Dow Jones-UBS Commodity Index was up 5.76% for the month of December. The Dow Jones-UBS Single Commodity Indexes for Cotton, Sugar and Coffee had the strongest gains with month-to-date returns of 27.94%, 17.97%, and 11.98%, respectively. The three most significant downside performing single commodity indexes were Live Cattle, Natural Gas and Gold, which were down 1.76%, 1.53%, and 0.50% respectively, in December.
Year to date, the Dow Jones-UBS Commodity Index is up 11.49% with the Dow Jones-UBS Cotton Sub-Index posting the highest gain of 105.14% so far in 2010. Dow Jones-UBS Natural Gas Sub-Index has the most significant downside YTD performance, down 45.00%.
Source: Mondovisione
Exchanges also face financial reform
December 20, 2010--Exchanges like to boast that, while they are an unusually visible part of the financial markets, they had nothing to do with the financial crisis of 2008. Trading of stocks, options and futures carried on throughout the worst moments of the crisis, with prices being quoted continuously and deals done.
However, exchanges are not unaffected by the sweeping changes to the financial landscape as a result of the regulatory overhaul of financial services – the biggest since since the US stock market crash of 1929.
Source: FT.com
Investors buy into haven of the dollar
December 20, 2010--The dollar was in demand as investors sought havens from the eurozone debt crisis while rising geopolitical tensions in the Korean peninsula weighed on Asian currencies.
Sentiment for the euro remained fragile after Moody’s downgrade for Ireland and its warning on Spain last week. “The lack of any substantive plan to bulk up the European financial stability facility or provide an alternative crisis management system has kept the market negative on the euro as the downgrades keep rolling in from Moody’s,” said Adrian Schmidt, of Lloyds Bank Corporate Markets.
Source: FT.com
Sugar and coffee hit multi-year highs
December 20, 2010--Sugar and coffee prices hit multi-year highs on Monday, further boosting food inflation concerns as supply problems mounted after a string of lower-than-expected harvests due to unfavourable weather, analysts said.
The surge in sugar and coffee prices comes as other agricultural commodities – from corn and wheat to soyabean and barley – trade near a two-year high.
Source: FT.com
