Global ETF News Older than One Year
Could the wisdom of crowds help investor and regulator madness on governance and ownership?
An anonymous survey of investor concerns might be the basis for neutral dialogue to prevent future systemic crises.
December 16, 2009--Charles Mackay’s 1841 classic book: ‘Extraordinary Popular Delusions and the Madness of Crowds’, has been a staple for readers – notably financiers – interested in some of the biggest – and strangest – societal neuroses in recent centuries. Alongside a fascinating chapter on the ‘Influence of politics and religion on the hair and beard’ (bear with me), there are accounts of the wildest and most damaging historical financial speculations: Tulipomania in 17th century Holland, the South Sea bubble in 18th century England and the Mississippi Scheme of 1720 in which Scots rogue, John Law, bankrupted the French state and many of its citizens with promises of riches in the Americas.
The book records the seemingly inexorable link between greed, folly and herd mentality; all present and correct in our latest financial breakdown to such devastating affect. Re-reading Mackay got me thinking about the practical, tangible responses of regulators and institutional investors to the credit crunch to try and ensure it doesn’t happen again. Amidst the political and public clamour for resolution, I wondered if there had actually been any action yet, outside of short-term banker bonus hysteria? Are we doomed to relive the same calamitous bubble manias over and over again, and can we afford to? The answer to the last question should, I hope, be no, with the caveat that financial bubbles are probably unavoidable.
Link to the report: Credit Crisis, Business as Usual for Institutional Investors?
Source: Responsible Investor
Dow Jones Indexes Wins 18th Award for its Islamic Market Index Series
December 16, 2009--Dow Jones Indexes, a leading global index provider, today announced that it has been named “Best Index Provider Shari’ah compliant Indexes” by Dubai-based Islamic Business & Finance magazine.
The Islamic Business & Finance awards are designed to inspire and reward excellence in Islamic business and finance globally.
“2009 marks the tenth anniversary of the Dow Jones Islamic Market Indexes and we proudly look back on a remarkable decade of leading-edge index innovation and excellence. Market participants globally have chosen our superior and unique Islamic indexes to be the standard for Shari’ah compliant indexing. We are honored to conclude this commemorative year with this prestigious award. We remain committed to provide meaningful, new Islamic indexes in the years to come,” said Michael A. Petronella, president, Dow Jones Indexes.
Award winners are based on votes of readers of Islamic Business & Finance via its website http://www.cpifinancial.net. The published short list of nominees is initially created by an independent board of advisors based on achievements over the last year of business.
The Dow Jones Islamic Market Indexes were introduced in 1999 as the first indexes intended to measure the global universe of investable equities that pass screens for Shari’ah compliance. With more than 100 indexes, the series is the most comprehensive family of Islamic market measures and includes regional, country, and industry indexes, all of which are subsets of the Dow Jones Islamic Market Index. An independent Shari’ah Supervisory Board counsels Dow Jones Indexes on matters related to the compliance of index-eligible companies.
In the past 6 years, the Dow Jones Islamic Market index series has won industry awards by organizations, research institutions and magazines around the world; amongst them are the International Islamic Finance Forum, the Kuala Lumpur Islamic Finance Forum, the Islamic Center of Southern California, Global Finance magazine, Incisive Media and Islamic Finance News.
There are currently more than 150 licensees with more than US$7 billion in assets benchmarked to the Dow Jones Islamic Market Indexes. For more information on the Dow Jones Islamic Market Indexes, please visit http://www.djindexes.com.
Source: Dow Jones Indexes
Two Sectors Dominated the List of Defaults in October 2009
December 16, 2009--October 2009’s list of defaults is dominated by two sectors that have been seriously troubled since the recession began--financial institutions and media. Standard & Poor's Ratings Services saw only 14 companies in October that were unable to meet their debt obligations. But despite that low monthly total, these companies had $24.1 billion in bad debt, bringing the year to date total to $572.7 billion.
Designed for credit risk professionals, Loss Trends Monthly provides insight into default and recovery data trends across various sectors and regions. The default and recovery data included in the report is based on preliminary dollar estimates from Standard & Poor’s Risk Solutions’ CreditPro®
Source: Standard & Poors
Standard & Poor's Announces Changes In The S&P/TSX Canadian Indices
Decdember 15, 2009--Standard & Poor's Canadian Index Operations announces the following index changes:
Eldorado Gold Corporation (TSX:ELD) has announced the successful completion of a scheme of arrangement under Australian law whereby it will acquire all the shares of Sino Gold Mining Limited (ASX:SGX).
Shareholders of Sino Gold will receive 0.55 shares of Eldorado for each share of Sino Gold held. The relative weight of Eldorado will increase in the S&P/TSX Composite and Capped Composite, the S&P/TSX 60, 60 Capped and Equity 60, the S&P/TSX Equity and Capped Equity, the S&P/TSX Capped Materials, the S&P/TSX Global Gold and the S&P/TSX Global Mining indices to reflect the issuance of new shares as part of the transaction, which will be effective after the close of trading on Friday, December 18, 2009.
Company additions to and deletions from an S&P equity index do not in any way reflect an opinion on the investment merits of the company.
Source: Standard & Poors
ETF Landscape Industry Preview End of November 2009
December 14, 2009--Highlights
Global ETF and ETP Industry 2009:
Global ETF assets have hit an all time high of US$982 Bn at the end of November 2009; 4.3% above the previous all time high of US$942 Bn set in October 2009.
At the end of November 2009 the Global ETF industry had 1,907 ETFs with 3,678 listings and assets of $982.28 Bn, from 103 providers on 39 exchanges around the world.
Globally, net sales of mutual funds (excluding ETFs) were US$13.3 Bn, while net sales of ETFs were US$93.8 Bn during the first nine months of 2009 according to Strategic Insight.
Additionally, there were 601 other Exchange Traded Products (ETPs) with assets of US$154.52 Bn from 40 providers on 19 exchanges.
Combined, there were 2,508 products with 4,565 listings and assets of US$1,136.80 Bn from 129 providers on 42 exchanges around the world.
US ETF and ETP Industry 2009:
US ETF assets have hit an all time high of US$665 Bn at the end of November 2009 which tops the previous all time high of US$640 Bn set in October 2009.
At the end of November 2009 the US ETF industry had 753 ETFs and assets of $665.45 Bn, from 26 providers on two exchanges.
In the US, net sales of mutual funds (excluding ETFs) were minus US$131.5 Bn, while net sales of ETFs domiciled in the US were positive US$64.0 Bn in the first nine months of 2009 according to Strategic Insight.
Additionally, there were 144 other Exchange Traded Products (ETPs) with assets of US$88.38 Bn from 18 providers on one exchange.
Combined, there were 897 products with assets of US$753.82 Bn from 40 providers on two exchanges in the US.
European ETF and ETP Industry 2009:
European ETF assets have hit an all time high of US$217 Bn at the end of November 2009 which is 5.5% above the previous all time high of US$206 Bn set in October 2009 and 35.5% above the high of US$160 Bn recorded in July 2008.
At the end of November 2009 the European ETF industry had 812 ETFs with 2,315 listings and assets of $216.78 Bn, from 32 providers on 18 exchanges.
In Europe net sales of mutual funds (excluding ETFs) were US$177.7 Bn while net sales of ETFs domiciled in Europe were US$28.6 Bn during the first nine months of 2009 according to Lipper FMI.
Additionally, there were 175 other Exchange Traded Products (ETPs) with assets of US$19.95 Bn from five providers on six exchanges.
Combined, there were 987 products with assets of US$236.73 Bn from 33 providers on 18 exchanges in Europe.
Source: ETF Research and Implementation Strategy Team, Blackrock
BofA Merrill Lynch Global Research Forecasts a Slow but Steady Global Economic Recovery in 2010
Equities and commodities poised to benefit while bond outlook is modest
December 14, 2009--According to the BofA Merrill Lynch Global Research Macro Year Ahead for 2010, the global economy will grow ahead of consensus estimates in 2010.
BofA Merrill Lynch Global Research is forecasting global GDP growth of 4.4 percent in 2010.
Emerging Market economies are expected to take the lead, growing at an anticipated average rate of 6.3 percent while Developed World economies are expected recover from recession and grow at an average 2.7 percent.
The report highlights several reasons for this optimistic, above consensus outlook.
First, after Lehman’s collapse global policy makers adopted a “do whatever it takes” attitude to the economic and financial crises. This has meant not only consistently aggressive monetary and fiscal stimulus, but policies that are repeatedly recalibrated to match the scale of the crisis.
Second, the BofA Merrill Lynch Global Economics team points out that forecasters and investors tend to underestimate the power of the business cycle. During recessions, many sectors of the economy overshoot to the downside and any improvement in confidence results in a bounce in activity.
“We expect the economic recovery to remain stronger than consensus expectations, but still significantly weaker than a normal recovery from a major recession,” said Ethan Harris, head of North America economics and coordinator of global economics.
“With few domestic imbalances, the eurozone can ride the upturn in global manufacturing and enjoy robust growth,” said Holger Schmieding, head of European economics research.
The muted recovery will likely lead to low core inflation, continued soft monetary policy and further quantitative easing, the report says. This outlook favours equities and commodities and signals a year of lower returns for government and corporate bonds.
Equities to benefit from growth The prediction from BofA Merrill Lynch Global Research of 4.4 percent GDP growth in 2010 spells good news for equities. Global stock markets will be in a strong position to continue the recovery started in 2009 so long as a second recession is avoided. Despite the 30 percent return so far in 2009, valuations remain below the 10-year average of a 16.0x price-earnings ratio. Furthermore global economic policy favours risk-taking.
“We remain long risk assets, including global equities, until we see a policy mistake or a double-dip in economic activity,” said Michael Hartnett, chief global equities strategist.
Gary Baker, head of European equity strategy, said, “Our positive global economic view for 2010 suggests that consensus top line sales estimates are too cautious. Attractive valuations and strong earnings revisions point to another good year for European equities, led initially by cyclicals.”
David Bianco, head of U.S. equity strategy expects S&P 500 sales growth to be led by the four ‘global cyclical’ sectors of Technology, Energy, Industrials and Materials. “We also expect Financials and Energy to appreciate the most in 2010 and expect strong appreciation with lesser risk from Industrials, Tech and Materials. Our S&P 500 12-month price target is 1275.” said Bianco.
Source: BofA Merrill Lynch
Siam City Bank To Enter The FTSE SET Large Cap After The December 2009 Semi-Annual Review
December 14, 2009--FTSE Group (“FTSE”), award-winning global index provider, and the Stock Exchange of Thailand (“SET”) announce that Siam City Bank Public Company Limited will replace Thai Tap Water Supply Public Company Limited in the FTSE SET Large Cap Index following the semi-annual review concluded by the FTSE SET Advisory Committee today.
The FTSE SET Large Cap Index is used as the basis of financial products including the ThaiDEX FTSE SET Large Cap ETF (TFTSE), derivatives and for benchmarking. The indices are reviewed semi-annually by the independent FTSE SET Index Advisory Committee in accordance with the index ground rules. The reviews ensure that the indices accurately reflect the market they represent. This is essential when the indices are used to benchmark investment portfolios and used as the basis of index-linked products.
Other indices in the FTSE SET Index Series were also reviewed, with a summary of changes as follows. Full details of additions and deletions can be found at http://www.ftse.com/Indices/FTSE_SET_Index_Series/Index_Reviews.jsp:
Source: FTSE
Deutsche Bank sets €10bn profit target
December 14, 2009--Deutsche Bank is to target record pre-tax profits of €10bn ($14.6bn) from its operating businesses by 2011, Germany’s largest bank said yesterday.
The goal compares with pre-tax profits of about €7.2bn in 2007 from the same operations and reflects the bank’s belief in its recovery prospects.
Source: FT.com
Russell Investments Selects NASDAQ OMX to Disseminate Index Values for Its Global Indexes
December 14, 2009--The
NASDAQ OMX Group, Inc. (Nasdaq:NDAQ) and Russell Investments today
announced that NASDAQ OMX(R) has been selected as the primary source of
real-time index values for Russell's global and ex-U.S. indexes.
In order to more broadly distribute this comprehensive, rules-based index information, NASDAQ OMX will begin disseminating real-time values for the Russell Global Indexes on January 11, 2010 via its premier index service, the Global Index Data Service(SM) (GIDS(SM)). GIDS subscribers have low administrative and technology costs and GIDS is designed to facilitate excellence in trading performance and portfolio valuation due to its frequent dissemination of index data. GIDS supports a diverse array of NASDAQ OMX-branded indexes that cover equities, bonds, commodities and exchange traded funds (ETFs), as well as third party partnered indexes.
"Russell and NASDAQ OMX clients worldwide will have instant access to our comprehensive global index data, equipping them with the sharpest picture of the global investment landscape," said Rolf Agather, Russell's director of index research and innovation. "This arrangement streamlines our process for efficiently delivering real-time, delayed and end-of-day data through existing data feeds."
"We are pleased to be selected to disseminate index values for a leading index provider like Russell Investments," said Randall Hopkins, Senior Vice President of Global Data Products, NASDAQ OMX. "By leveraging the capabilities of NASDAQ OMX, critical Russell index information is delivered to the market in real-time and in a highly scalable manner for customers. This agreement expands the relationship between our organizations which work closely together during the annual reconstitution of Russell indexes."
Since 2004, Russell has leveraged the NASDAQ Closing Cross for the annual reconstitution of its U.S. indexes. The NASDAQ Closing Cross is used to determine NASDAQ official closing prices (NOCPs) which are widely used throughout the financial industry.
NASDAQ OMX will disseminate values for these Russell Investment indexes through the NASDAQ OMX Global Access program. NASDAQ OMX Global Access offers Russell the opportunity to distribute its data through one of the largest and most successful data distribution organizations in the world, NASDAQ OMX Global Data Products. By leveraging the sales, administrative, technical and brand strength of NASDAQ OMX, Global Access provides customers turn-key access to a premier data business. For details, visit http://www.nasdaqtrader.com/Trader.aspx?id=globalaccessprogram.
Source: NASDAQ OMX
NASDAQ Announces the Annual Re-Ranking of the NASDAQ-100 Index
December 11, 2009--The NASDAQ OMX Group, Inc.
(Nasdaq:NDAQ) announced today the annual re-ranking of the NASDAQ-100
Index(R), effective with the market open on Monday, December 21, 2009.
The following seven issues will be added to the NASDAQ-100 Index: Vodafone Group Plc (Nasdaq:VOD), Mattel, Inc. (Nasdaq:MAT), BMC Software, Inc. (Nasdaq:BMC), Mylan Inc. (Nasdaq:MYL), QIAGEN N.V. (Nasdaq:QGEN), SanDisk Corporation (Nasdaq:SNDK), and Virgin Media Inc. (Nasdaq:VMED).
"We are delighted that these companies have been included in the NASDAQ-100 Index," said NASDAQ OMX Executive Vice President John L. Jacobs. "Of the seven new companies in the index, four transferred their listed securities from the NYSE to The NASDAQ Stock Market(R). Inclusion in the NASDAQ-100 Index, a globally recognized brand, provides these companies with increased visibility and distinguishes them as some of the world's leading large-cap growth companies."
The NASDAQ-100 Index is composed of the 100 largest non-financial stocks on The NASDAQ Stock Market and dates to January 1985 when it was launched along with the NASDAQ Financial-100 Index(R), which is comprised of the 100 largest financial stocks on NASDAQ(R). These indexes were originally designed to segment NASDAQ into two major industry groups to support media coverage and to act as benchmarks for financial products such as options, futures, and funds. The NASDAQ-100 Index is re-ranked each year in December, timed to coincide with the quadruple witch expiration Friday of the quarter.
On a cumulative price return basis, the NASDAQ-100 Index has returned 1314% since inception, although past performance is not indicative of future performance.
The NASDAQ-100 Index is the basis of the PowerShares QQQ(R) Trust (Nasdaq:QQQQ) which aims to provide investment results that, before expenses, correspond with the NASDAQ-100 Index performance. In addition, options, futures and structured products based on the NASDAQ-100 Index and the PowerShares QQQ Trust trade on various exchanges.
As a result of the re-ranking of the NASDAQ-100 Index, the following seven securities will be removed: Akamai Technologies, Inc. (Nasdaq:AKAM), Hansen Natural Corporation (Nasdaq:HANS), IAC/InterActive Corp (Nasdaq:IACI), Liberty Global's Class A Common Stock (Nasdaq:LBTYA), Pharmaceutical Product Development, Inc. (Nasdaq:PPDI), Ryanair Holdings plc (Nasdaq:RYAAY), and Steel Dynamics, Inc. (Nasdaq:STLD).
To learn more about the criteria for inclusion to the NASDAQ-100, visit https://indexes.nasdaqomx.com/data.aspx?IndexSymbol=NDX.
Source: NASDAQ OMX
