Global ETF News Older than One Year
Keeping Ahead of the Curve: Investment Management in the New Regulatory Landscape
June 25, 2010--Ensuring compliance with existing regulations and preparing for new regulatory developments is a normal part of doing business for financial services organizations. However, the breadth and volume of regulatory initiatives around the world has surged in response to the global financial crisis, putting increasing strain on businesses already under pressure. Proposed regulatory reforms to the investment management and financial services industries seek to lessen systemic risk and enhance investor protection.
This report by KPMG International highlights a survey of top executives in the investment management services industry on how they view new regulatory reform and the potential impact on their business.
The executives were polled on new regulations affecting strategic objectives, the markets in which they operate, financial targets for the future, and the impact of regulation on investment returns.
view Keeping Ahead of the Curve: Investment Management in the New Regulatory Landscape
Source: KPMG
BlackRock's O'Brien steps down, leaves investment management
June 25, 2010--Mike O’Brien, head of EMEA institutional business at BlackRock, is to leave the company.
He is to pursue business interests outside investment management.
O’Brien spent 10 years at Barclays Global Investors before it was acquired by BlackRock last year.
His successor is to be Charles Prideaux, currently chief executive of BlackRock's fundamental equities business.
Source: IP&E
Banks win battle for limits to Basel III
June 24, 2010--Plans by global regulators to compel banks to set aside billions of dollars in extra capital to cope with future crises are to be pared back after intense lobbying by the industry.
After wrangling over the details of a regulatory overhaul published six months ago, a consensus on the Basel committee is suggesting that its proposals be thinned down.
A draft of the latest thinking of the committee, set up to oversee global financial regulation, is to be presented at this weekend’s G20 summit in Toronto.
Source: FT.com
Corporate Clean Energy Investment Trends in Brazil, China, India and South Africa
June 23, 2010--Overall Findings
1. Companies in BASIC countries are making very sizeable investments in clean energy. The scale of corporate investments in the four countries studied, particularly in China which
is the world’s largest investor in this area, is very large. These investments are being driven
by regulation, but also by other purely business-led considerations such as cost reduction and energy security.
2. High-level policy signals are necessary and useful.
All four of the countries studied have framework legislation which sets out principles and aspirations for greater energy efficiency and use of renewable energy. These high-level
signals can influence investment; they also create societal expectations which help to shape internal company policies.
3. In addition to high-level signals, clear and specific regulation is also needed. Although high-level policy signals are useful, corporate investment decisions are most strongly influenced by regulation that provides very specific requirements and mechanisms for action. Recent work by Chatham House describes this as “investment grade” policy.
4. CDM has made a contribution, and consideration should be given to its future role. The Clean Development Mechanism (CDM) has played an important role in incentivizing corporate investment, particularly for renewable energy. CDM’s uncertain future may affect levels of corporate investment in BASIC countries.
Summary of Findings by Country
Brazil
Energy Efficiency
Strong regulatory requirements for the energy sector are having an effect on corporate
investment;
In other industrial sectors policy and regulation exist, but are not currently playing a major role in corporate investment decisions;
Source: Carbon Disclosure Project
June 2010 “Islamic Market’s Measure” Preliminary Report - Monthly Report On The Performance Of The Dow Jones Islamic Market Indexes
June 23, 2010--Based on the close of trading on June 22, the global Dow Jones Islamic Market Titans 100 Index, which measures the performance of 100 of the leading Shari’ah compliant stocks globally, gained 1.59% month-to-date, closing at 1939.90. In comparison, the Dow Jones Global Titans 50 Index, which measures the 50 biggest companies worldwide, posted a gain of 1.56%, closing at 156.04.
The Dow Jones Islamic Market Asia/Pacific Titans 25 Index, which measures the performance of 25 of the leading Shari’ah compliant stocks in the Asia/Pacific region, increased 5.59%, closing at 1807.02. The Dow Jones Asian Titans 50 Index, in comparison, posted a gain of 3.86%, closing at 127.91.
Measuring Europe, the Dow Jones Islamic Market Europe Titans 25 Index, which measures the performance of the 25 of the leading Shari’ah compliant stocks in Europe, closed at 1839.72, a gain of 1.90%, while the conventional Dow Jones Europe Index gained 4.94%, closing at 229.51.
Measuring the performance of 50 of the largest Shari’ah compliant U.S. stocks, the Dow Jones Islamic Market U.S. Titans 50 Index increased, closing at 1993.00. It represents a gain of 0.78%. The U.S. blue-chip Dow Jones Industrial Average increased 1.55%, closing at 10293.52.
Source: Mondovisione
World Wealth Report 2010
Wealth recovery nearly compensates for 2008 losses as HNWI population grows 17.1% and HNWI wealth reaches $39 trillion
June 23, 2010----Asia-Pacific Leads Emerging Wealth Recovery -- BRIC Countries Continue to Drive Regional Growth
The world's high net worth individuals (HNWIs)(1) regained ground despite weakness in the world economy, according to the 14th annual World Wealth Report, released today by Merrill Lynch Global Wealth Management and Capgemini. The world's population of HNWIs returned to 10 million in 2009 and HNWI financial wealth increased, posting a gain of 18.9 percent to $39 trillion. Ultra-HNWIs(2) increased their wealth by 21.5 percent in 2009.
These figures indicate that emerging wealth recovery has nearly recouped 2008 losses, returning to levels last seen in 2007.
"The last few years have been significant for wealthy investors. While in 2008 global HNWI wealth showed an unprecedented decline, a year later we are already seeing distinct signs of recovery, and in some areas a complete return to 2007 levels of wealth and growth," said Sallie Krawcheck, president, Global Wealth and Investment Management, Bank of America.
"The rebound has been, and will continue to be, driven by emerging markets -- especially India and China, as well as Brazil," said Bertrand Lavayssiere, managing director, Global Financial Services, Capgemini. "In fact, Asia-Pacific was the only region in which both macroeconomic and market drivers of wealth expanded significantly in 2009."
While the global HNWI recovery was generally stronger in developing nations, most of the world's HNWI population and wealth remained highly concentrated in the U.S., Japan and Germany, which together accounted for 53.5 percent of the world's HNWI population in 2009, down slightly from 54 percent in 2008. North America remains the single largest home to HNWIs, with its 3.1 million HNWIs accounting for 31 percent of the global HNWI population.
Asia-Pacific HNWIs, Hit Especially Hard in 2008, Led Recovery in 2009
After falling 14.2 percent in 2008 to 2.4 million, Asia-Pacific's HNWI population rebounded in 2009 to reach 3 million, matching that of Europe's HNWI population for the very first time. Asia-Pacific wealth also surged 30.9 percent to $9.7 trillion, more than erasing 2008 losses and surpassing the $9.5 trillion in wealth held by Europe's HNWIs. This shift in rankings occurred because HNWI gains in Europe, while sizeable, were far less than those in Asia-Pacific, which saw continued robust growth in both economic and market drivers of wealth. Hong Kong and India led growth in Asia-Pacific, after experiencing massive declines in their HNWI bases and wealth in 2008.
Moving Forward, Asia-Pacific and BRIC Will Likely Be the Powerhouses of HNWI Growth
BRIC nations (Brazil, Russia, India and China) are expected to again be the drivers of HNWI growth for their respective regions in the coming years. In Asia-Pacific, China and India will continue to lead the way, with economic expansion and HNWI growth likely to keep outpacing more developed economies. Asia-Pacific HNWI growth is likely to be the fastest in the world as a result. In Latin America, Brazil is similarly expected to remain an engine of growth. Russia is expected to display strength due to its commodity-rich resource base.
Source: Capgemini
IEA says outlook for oil and natural gas markets still uncertain, but both share need for more investment, improved energy efficiency and better data
June 22, 2010--Oil and gas markets are starting to show signs of recovery, but the impact of the recession differs across regions,and the outlook remains very uncertain,” said Nobuo Tanaka, Executive Director of the International Energy Agency (IEA). Launching the new combined IEA publication Medium-Term Oil and Gas Markets 2010 today in Paris, he said "In both oil and gas, we see a notable dichotomy between non-OECD and OECD markets, with strong growth in China, India and the Middle East compared to weaker or flat demand elsewhere, especially in the fragile European economy. These contrasting trends cloud efforts to foresee how oil and gas markets will develop into the medium term. But what is clear is that both will need more investment, a greater focus on energy efficiency and improved data."
Oil supplies could tighten without improved efficiency and diversified transport fuels
Taking into account this uncertainty, the IEA report presents two oil demand cases for the next five years: one based on relatively strong GDP growth of nearly 4.5% per year from 2010 onwards (in line with the most recent IMF projections) and a reduction in oil use intensity of 3% annually; the other one based on lower GDP growth at 3%, but with correspondingly slower reductions in oil intensity. Under higher growth, even with ongoing energy efficiency improvements, oil demand increases by an average of +1.2 mb/d annually (1.4%), reaching close to 92 mb/d by 2015. Oil demand recovers to pre-crisis 2007 levels again by 2010. Effective OPEC spare capacity in this scenario begins to decline again as soon as next year, reaching 3.6 mb/d by 2015. While new OPEC capacity should come on stream in 2014, we anticipate a tightening global balance, with surplus capacity falling below 5% of global demand. This could lead to more jittery markets ahead, after what has been a prolonged period of relative price stability over the past year.
But such demand growth is not inevitable. "The projected growth in demand is not set in stone," Mr. Tanaka said. "Greater attention to improved oil use efficiency and diversification of transport fuel supplies could maintain spare capacity at closer to the current 5-6 million barrels per day, while generating a slow but steady increase in demand for OPEC crude." In the lower GDP growth scenario, oil demand growth averages around 1% (840 kb/d), taking global demand to 90 mb/d by 2015 and also effectively prolonging the period of more comfortable markets. Particularly noteworthy is the role of non-OECD countries, where almost all growth in oil demand is to be found under either scenario, and the pivotal importance of the transport sector in driving demand.
Source: IEA
June 2010 “Market’s Measure” Preliminary Report - A Monthly Report From Dow Jones Indexes On The Performance Of U.S., European, Asia And Other Global Stock Market Indexes
June 22, 2010-- Dow Jones Industrial Average Posts 3.02% Gain in JUNE, European Stocks Gain 6.28%, Asia Rises 4.67% and World Equities Rise by 2.63%
Basic Materials Sector Posts Biggest Gain for June in Europe
Retail Sector Takes the Hardest Hit for June in Worldwide
As of June 21 the Dow Jones Industrial Average rose 3.02% in June, closing at 10442.41. Stock market indexes in Europe, Asia and globally were up in June, according to preliminary monthly figures from global index providers, Dow Jones Indexes.
The Dow Jones Industrial Average rose 3.02% in June, closing at 10442.41. Year-to-date, the index is up 0.14%.
The Dow Jones Europe Index rose 6.28% in June to 232.44. So far this year, the index is down -12.04%.
The Dow Jones Asian Titans 50 Index rose 4.67% in June to 128.90. So far this year, the index is down -4.00%.
The Dow Jones Global Titans 50 Index rose 2.63% in June, closing at 157.67. Year-to-date, the index is down -9.20%.
JUNE 2010 Sector Winners and Losers
In the U.S., the Dow Jones U.S. Oil & Gas Index was the biggest winner in June, posting a 4.99% gain. The Dow Jones U.S. Consumer Services Index posted the biggest loss, dropping -0.61%.
In Europe, the Dow Jones Europe Basic Materials Index posted the biggest gain, climbing 8.65%. The Dow Jones Europe Oil & Gas Index had the sharpest decline, falling -0.05%.
In Asia, the Dow Jones Asia/Pacific Telecommunications Index posted the biggest gain, rising 6.96%. The Dow Jones Asia/Pacific Health Care Index posted the narrowest gain, up 4.07%.
Globally, the Dow Jones World Basic Resources Titans Index had the best performance, climbing 5.78%. The Dow Jones World Retail Titans Index posted the biggest loss, dropping -0.94%.
Source: Dow Jones Indexes
NASDAQ OMX Introduces Two Sharia-Compliant Indexes
New Indexes are Based on the NASDAQ-100 Index and the OMX Stockholm Benchmark Index
June 22, 2010--The NASDAQ OMX Group, Inc. (Nasdaq:NDAQ) announced the introduction today of two new Sharia-compliant indexes based on two of the world's most widely-followed benchmarks: The NASDAQ-100 Index® (Nasdaq:NDX) and the OMX Stockholm Benchmark Index (OMXSB). The new NASDAQ-100 Sharia IndexSM (N100SI) and the OMX Stockholm Benchmark Sharia IndexSM (OMXSBSHARIA) are the first of a new family of indexes launched by NASDAQ OMX Global Index Group that are designed to serve investors who wish to develop and maintain an Islamic investment portfolio.
The NASDAQ-100 Sharia Index and the OMX Stockholm Benchmark Sharia Index are designed to track the performance of securities in their underlying indexes that meet the Sharia requirements as prescribed by the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) and adopted by NASDAQ OMX with the guidance of the Sharia advisor, BMB Islamic UK Ltd.
The NASDAQ-100 Sharia Index is a modified market-capitalization weighted index designed to track the performance of the Sharia-compliant securities of the NASDAQ-100 Index. The NASDAQ-100 Index includes 100 of the largest domestic and international non-financial securities listed on The NASDAQ Stock Market® based on market capitalization. The index reflects companies across major industry groups including computer hardware and software, telecommunications, retail/wholesale trade and biotechnology.
The OMX Stockholm Benchmark Sharia Index is designed to track the performance of the Sharia-compliant securities in the OMX Stockholm Benchmark Index. The OMX Stockholm Benchmark Index consists of the 80 to 100 largest and most traded stocks on NASDAQ OMX Stockholm, representing all sectors.
"The NASDAQ-100 Sharia Index and the OMX Stockholm Benchmark Sharia Index were developed to meet increasing demand for a wider variety of Islamic investment opportunities," said NASDAQ OMX Executive Vice President John Jacobs. "These new Sharia-compliant indexes are a continuation of NASDAQ OMX's commitment to designing and calculating world-class indexes and to providing investors with relevant, objective indexes."
According to BMB Islamic's CEO Dr. Humayon Dar, who heads the Sharia monitoring process for the indices, "The new Sharia indices by NASDAQ OMX herald a new era of Islamic investing, especially for those who are looking for sophisticated Sharia compliant solutions beyond plain vanilla Islamic equity funds."
The NASDAQ-100 Sharia Index began calculating on June 22, 2010 at a base value of 1000.00, while the OMX Stockholm Benchmark Sharia Index began calculating on May 31, 2010 – also at a base value of 1000.00.
Source: NASDAQ OMX
Exchange-Traded Funds International Equity: EM Allocation Update
June 21, 2010--Morgan Stanley's Global Emerging Market (EM) Strategy team, led by Jonathan Garner, maintains an EM-based country allocation model. The model is adjusted monthly and seeks to outperform the MSCI EM Index on a 6- to 12-month time horizon.
The team made three relative rating changes to the model this month. Relative to the MSCI EM Index, Malaysia moves to an overweight recommendation while Colombia and Thailand are both downgraded to underweight recommendations. At the same time, Garner increases his overweight recommendation to Russia by 100 basis points funded by an equivalent reduction in China's overweight recommendation.
ETFs are available for most countries in Garner's model. Currently, US-listed ETFs are available for approximately 99% of the market cap of the MSCI EM Index and 99% of the recommended Morgan Stanley weights. ETFs may offer an efficient way to access Ems and the costs associated with them may be lower than the costs traditionally associated with other EM investments. Moreover, ETFs trade on exchanges, provide intra-day liquidity, many have options available, and most ETFs can be easily shorted.
Source: Morgan Stanley
