Global ETF News Older than One Year
Emerging Markets Present Unique Opportunity For Carbon Conscious Portfolio Managers
Findings From A Study By Trucost Reveal That Emerging Markets Portfolios Are Up To 60% More Carbon Intensive Than Similar Portfolios In The US And Europe, Offering Unique Opportunities For Carbon Efficient Strategies
October 21, 2010--As growth opportunities in developed markets become limited, investors are increasing allocations to emerging market strategies covering growth economies such as China, India and Brazil in order to deliver their expected returns.
However, in comparison to developed countries, public equity markets in developing countries are still dominated by resource and carbon-intensive companies, presenting additional financial risks and unique opportunities to investors as many of these countries take action to limit rising greenhouse gas (GHG) emissions.
Emerging market countries including Brazil, South Africa, India and China, have set targets to reduce emissions by 2020 under the Copenhagen Accord, which could underpin a legally binding climate change agreement covering more than 80% of global greenhouse gas emissions at the UN climate change conference that starts in Cancun next month.
The study shows that almost 80% of greenhouse gases from companies on emerging market benchmark portfolios are emitted through their own operating activities, which is likely to be subject to policy measures such as performance standards and carbon taxes proposed to achieve national emission reduction targets. Abatement costs to reduce just 4% of projected emissions could equate to more than 5% of earnings for 24 emerging market companies in the Utilities, Resource, Oil & Gas, Construction and Travel sectors in 2013.
Source: Mondovisione
Singapore Exchange and NASDAQ OMX Extend Cooperation
ADR Trading on GlobalQuote Starts Today
New Collaboration Includes Dual Listings
October 21, 2010--Following the cooperation to bring American Depository Receipts (ADRs) on GlobalQuote, Singapore Exchange (SGX) and NASDAQ OMX (Nasdaq:NDAQ) today also announce plans to offer companies the opportunities for listing on both exchanges.
The listing co-operation includes offering a cross listing opportunity to currently listed companies on both the NASDAQ Stock Market and SGX as well as dual listing opportunities for new IPOs. This initiative potentially allows better price discovery and trading opportunities in the Asian and U.S. time zones. NASDAQ-listed companies with strong brand awareness and active business endeavors in Asia will benefit from a secondary listing on SGX. SGX-listed companies interested in reaching U.S. investors will be able to list their ADRs on the NASDAQ Stock Market.
At 9am today, 19 American Depositary Receipts of Asian companies will be quoted for trading on the GlobalQuote board on Singapore Exchange (SGX). SGX and NASDAQ OMX intend to add more ADRs from Asian-based companies onto GlobalQuote, providing investors with an array of trading opportunities, including some that were previously unavailable during the Asian trading day.
Magnus Bocker, CEO of SGX, said, "The partnership with NASDAQ OMX will bring a wider selection of investment choices to our investors and offer companies access to an enlarged pool of investors. This strengthens our Asian gateway strategy."
Bob Greifeld, CEO of NASDAQ OMX, said, "We have a strong working relationship with SGX that goes back to 2003, when we provided the technology platform for their trading system. The collaboration we are announcing today is a natural next step in our relationship and will give our customers the ability to increase their investor base and reach a more global investor community."
Source: NASDAQ OMX
Global Regulatory Overhaul is Pushing for Greater Transparency in OTC Instruments, Says TABB Group
New Research Report Examines the Changing OTC Valuations Industry; OTC Valuation Spending Projected to Grow at an 11% CAGR through 2013
October 20, 2010-- The recently passed Dodd-Frank Wall Street Reform and Consumer Protection Act includes provisions addressing the lack of transparency in the OTC derivatives market that will provide a significant boost to the prospects of independent valuation service providers.
According to TABB Group in a just published research report, “OTC Valuation Services: How You Know if the Price is Right” regulators want more openness in the markets on many different levels. “Dodd-Frank speaks to central clearing, swap execution facilities (SEFs), a central trade repository and the Office of Financial Research to provide a framework for lowering systemic risk,” says Andy Nybo, a TABB principal, the advisory and research firm’s head of derivatives and co-author of the report with Finn Christensen, a senior contributing analyst. “As OTC instruments begin to trade on SEFs and are centrally cleared, they will provide a wealth of benchmark data that will feed more standardized OTC valuation models. This will force a change in business models current valuation service providers use to stay competitive.”
Nybo says OTC derivatives trading volume has returned to 2007 levels. “Although the challenges and opportunities faced by valuations services are varied, TABB believes better times are ahead for those firms able to successfully navigate changes brought about by regulatory reform. Spending on OTC valuations remains an increasingly important area of focus across the industry, with spending totaling an estimated $249 million in 2010.” He adds that by 2013, spending will increase by 18.1%, to $294 million. Over the 2002 to 2013 period, spending for OTC derivative valuation activities will grow at an estimated CAGR of 11%.
Source: TABB Group
The Impact of the Great Recession on Emerging Markets-IMF Working paper
October 20, 2010--This paper examines the impact of the recent global crisis on emerging market economies (EMs). Our cross-country analysis shows that the impact of the crisis was more pronounced in those EMs that had initial weaker fundamentals and greater financial and trade linkages. This effect is observed along a number of dimensions, such as growth, stock market performance, sovereign spreads, and credit growth.
This paper also shows that during this crisis, pre-crisis reserve holdings helped to mitigate the initial growth collapse. This finding contrasts with other studies that fail to find a significant relationship between reserves and the growth decline. This paper argues that our preferred measure of impact is a more accurate reflection of the true impact of the crisis on EMs.
Source: IMF
China defends policy on rare earths
October 20, 2010--China has denied that it is violating World Trade Organisation rules in its strongest statement since the US announced an investigation last week into Beijing’s rare earths and green technology policies.
China reins in rare earth exports - Oct-19.Japan seeks to cut dependence on China - Oct-06.‘Rare earths’ fears spur US review - Sep-26..“China will continue controlling measures on exploiting rare earth, its production and exports and these measures are not in conflict with WTO regulations,” the ministry of commerce said on Wednesday. “China will continue to supply the world with rare earths.”
However Japanese officials said exports of rare earths – 17 elements vital to technological products as diverse as wind turbines, car batteries and sophisticated radar systems – have still not returned to normal after they were halted during a diplomatic dispute last month. The New York Times reported on Wednesday that China had halted rare earths shipments to Europe and the US.
Source: FT.com
International Capital Flows and Development: Financial Openness Matters-Working paper
October 19, 2010--Summary: Does capital flow from rich to poor countries? We revisit the Lucas paradox and explore the role of capital account restrictions in shaping capital flows at various stages of economic development. We find that, when accounting for the degree of capital account openness, the prediction of the neoclassical theory is confirmed: less developed countries tend to experience net capital inflows and more developed countries tend to experience net capital outflows, conditional of various countries’ characteristics.
The findings are driven by foreign direct investment, portfolio equity investment, and to some extent by loans to the private sector.
view the working paper-International Capital Flows and Development: Financial Openness Matters
Source: IMF
BlackRock ETF Landscape: Global Handbook, Q3 2010
October 19, 2010--This is a comprehensive directory of all 3,182 ETFs and ETPs with 6,361 listings, assets of US$1,196.9 Bn from 159 providers on 46 exchanges around the world.
At the beginning of September 2010 the global ETF industry had 2,308 ETFs with 4,922 listings, assets of US$1,061.9 Bn, from 129 providers on 43 exchanges around the world.
Additionally, there were 874 other Exchange Traded Products (ETPs) with 1,439 listings and assets of US$135.0 Bn from 48 providers on 20 exchanges. Combined, there were 3,182 products with 6,361 listings, assets of US$1,196.9 Bn from 159 providers on 46 exchanges around the world.
The growth in ETF listings can be explained, in large part, by strong investor demand for these types of products. The proliferation of new offerings has also made it more challenging in terms of decision-making.
Source: Global ETF Research & Implementation Strategy Team, BlackRock
Shell to review Dow Jones Sustainability Index as bonus metric after being dumped from benchmark
Response to “subjective” decision by Dow Jones/SAM
October 18, 2010--Oil giant Shell is reviewing whether to continue using the Dow Jones Sustainability Indexes as a metric to gauge senior management bonuses after it was deleted from the index.
Performance against the index currently accounts for half of the sustainable development part – or 10% of variable pay – of a scorecard Shell uses to judge executive committee members
Dow Jones and its partner SAM, the sustainable investing arm of Robeco, dropped Shell from the index in September after having removed BP in June following the Gulf of Mexico oil spill.
view the Shell Sustainability Report
Source: Responsible Investor
Global Aging Preparedness Index
October 17, 2010--The world is being overtaken by a stunning demographic transformation known as global aging. Over the next few decades, global aging promises to affect everything from business psychology and workforce productivity to the shape of the family and the direction of global capital flows. Perhaps most fatefully, it could throw into question the ability of societies to provide a decent standard of living for the old without imposing a crushing burden on the young.
Which countries are most prepared to meet the challenge? And which countries are least prepared? The Global Aging Preparedness Index (or GAP Index) provides the first comprehensive quantitative assessment of the progress that countries worldwide are making in preparing for global aging, and particularly the old-age dependency dimension of the challenge. The GAP Index consists of two separate subindices—the fiscal sustainability index and the income adequacy index. It covers twenty countries, including both developed economies and emerging markets. To learn more about the GAP Index, please visit its website at gapindex.csis.org.
view Global Aging Preparedness Index Full Report
Source:Center for Strategic and International Studies (CSIS)
IOSCO publishes recommendations for market interventions and securitisation in Emerging Markets
October 15, 2010--The Emerging Markets Committee (EMC) of the International Organization of Securities Commissions (IOSCO) meeting in Istanbul this week has approved two reports containing recommendations for regulators in emerging markets jurisdictions aimed at assisting them in relation to market interventions and the securitisation market.
Effectiveness of Market Interventions in Emerging Markets-Final Report
Securitization and Securitized Debt Instruments in Emerging Markets-Final report
Source: IOSCO
