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PowerShares Adds Convertibles ETF to Lineup
May 26, 2011--The PowerShares Convertible Securities Portfolio (CVRT) was listed for trading yesterday (5/26/11), becoming the second ETF targeting convertibles. Convertible securities are bonds that the holder can convert into shares of common stock of the issuer. This feature tends to make them more correlated than non-convertible bonds to stock market movements.
CVRT will try to mimic the performance of the BofA Merrill Lynch All U.S. Convertibles Index, which is designed to track the performance of U.S. dollar-denominated investment grade and non-investment grade convertible securities sold into the U.S. market and publicly traded in the United States.
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Source: TMCNET.com
CFTC Staff to Host Public Roundtable to Discuss Protection of Cleared Swaps Customer Collateral
May 25, 2011--Staff of the Commodity Futures Trading Commission (CFTC) will hold a public roundtable on June 3, 2011, from 9:30 a.m. to 5:00 p.m., to discuss issues related to the protection of cleared swaps customer collateral. The roundtable will assist the CFTC in the rulemaking process to implement the Dodd-Frank Wall Street Reform and Consumer Protection Act.
The roundtable will be held in the Conference Center at the CFTC's headquarters at Three Lafayette Centre, 1155 21st Street, NW, Washington, DC. The discussion will be open to the public with seating on a first-come, first-served basis. Members of the public may also listen by telephone and should be prepared to provide their first name, last name and affiliation
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Source: CFTC.gov
Strong demand for $35bn of 5-year Treasuries amid weak data
May 25, 2011--Investors aggressively sought $35bn of five-year Treasury debt sold on Wednesday at the lowest yield levels of the year.
In a sign of the demand, bid-cover ratio, or the measure of orders placed in relation to the auction amount, was 3.2 times, the highest since September 1994, when it was 3.29 times, according to Nomura Securities
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Source: FT.com
PowerShares files with the SEC
May 25, 2011--PowerShares has filed a post-effective amendment, registration statement with the SEC for the PowerShares Fundamental Pure Large Growth Portfolio (PXLG) and the
PowerShares Fundamental Pure Large Value Portfolio (PXLV)
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Source: SEC.gov
DTCC: Indemnification Provision In Dodd-Frank Could Create Unintended Negative Consequences
Provision Could Undermine Regulators’ Ability to See Unfragmented View of Market Data
May 25, 2011-- The Depository Trust & Clearing Corporation (DTCC) today cautioned in testimony before a House Agriculture subcommittee that the indemnification provision of Dodd-Frank could create unintended negative consequences, including undermining efforts to enhance transparency and mitigate systemic risk in the over-the-counter (OTC) derivatives market. The hearing was called to discuss global harmonization, extra-territoriality issues and technical concerns with the implementation of the Dodd-Frank Act.
"The underlying legislative intent of the Dodd-Frank Act could be subverted by the legislative language, preventing the exchange of information between regulators and frustrating efforts to identify and mitigate international financial risk and fragment regulatory oversight on a jurisdiction-by-jurisdiction basis," said Larry Thompson, DTCC managing director and general counsel, in testimony before the Subcommittee on General Farm Commodities and Risk Management.
Thompson said that foreign regulators are unlikely to grant US-based swap data repositories (SDRs) indemnification in exchange for access to data as required by the Dodd-Frank Act. Without an indemnity agreement, SDRs may be legally precluded from providing critical market data to regulators overseas. As a result, foreign jurisdictions could be incentivized to create their own local repositories to avoid indemnification—a move that would lead to data fragmentation.
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Source: DTCC
Bernanke May Resist ‘Noah’s Ark’ Approach on Systemic Risk
My 25, 2011--Bloomberg reports: Republican lawmakers and industry lobbyists are pressing a council of regulators including Federal Reserve Chairman Ben S. Bernanke and Treasury Secretary Timothy F. Geithner to reject a so-called Noah’s Ark strategy in choosing which non-bank companies to put under Fed supervision.
Under the Dodd-Frank Act, the Financial Stability Oversight Council must designate companies whose failure would threaten economic stability. The Fed could require the firms to raise capital and reduce risky practices. They also would have to file “living wills” so they could be unwound in an orderly way.
Source: Bloomberg
UBS Announces New Exchange Traded Note Linked to 2X Leveraged Wells Fargo® Business Development Company Index
May 25, 2011--UBS Investment Bank announced today that it has expanded its ETRACS Exchange Traded Notes (“ETNs”) platform by adding the new ETRACS 2xLeveraged Long Wells Fargo Business Development Company Index. It began trading today on NYSE Arca under the ticker symbol, BDCL, and provides leveraged exposure to Business Development Companies through a single investment.
“We are excited to add this ETN to our growing family of ETRACS ETNs. This new ETRACS 2xLeveraged Long Wells Fargo Business Development Company Index is particularly useful for investors seeking exposure to the BDC space and with 2X leverage, the Current Annual Leveraged Yield is 14.57%*,” said Christopher Yeagley, Managing Director and US Head of Equity Structured Products. “This ETN follows our successful launch of the Wells Fargo Business Development Company Index ETN (Ticker: BDCS), the first exchange traded product giving exclusive exposure to BDCs, on April 28, 2011. It is our third ETN with Wells Fargo and we are pleased to partner with them once again.”
BDCs are public vehicles that invest in private equity and debt and were created to increase financing available to small businesses. They function much like private equity funds, although BDCs allow various investors, regardless of size, to participate. A BDC lends to small and midsized companies at high yield equivalent rates and often takes equity stakes in these companies.
The Wells Fargo Business Development Company Index is comprised of 26 BDCs and is a float adjusted, capitalization-weighted index that is intended to measure the performance of BDCs that are publicly listed and satisfy specified market capitalization and other eligibility requirements.
Source: UBS
New York City Proclaims May 26, 2011 To Be ‘Dow Jones Industrial Average Day’ in Recognition Of Iconic Index’s 115th Anniversary
NYC Mayor Michael Bloomberg Calls Dow:
'Most Recognizable, Most Frequently Quoted, Longest-Serving Market Indicator of its Kind'
Charles Dow was a 'Pioneer' Who Anticipated Investors 'Would Value Objective Measure of How Large Companies Traded During a Standard Session in the Stock Market', Mayor Bloomberg Adds
May 25, 2011-- The City of New York has proclaimed May 26, 2011 to be “Dow Jones Industrial Average Day” in recognition of the iconic index’s 115th anniversary.
Founded on May 26, 1896 in New York City by Charles Dow, one of the founders of The Wall Street Journal, the Dow Jones Industrial Average has evolved from 12 stocks published for readers of The Journal to 30 stocks, becoming “the most recognizable, most frequently quoted, and longest-serving market indicator of its kind,” said New York City Mayor Michael Bloomberg in an official proclamation issued from his office.
Referring to The Dow’s 115th anniversary as an “historic milestone,” Mayor Bloomberg added that Mr. Dow anticipated investors “would value an objective measure of how large companies traded during a standard session in the stock market.”
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Souce: Dow Jones
Standard & Poor's Announces Changes In The S&P/TSX Venture Composite Index
May 25, 2011--Standard & Poor's will make the following changes in the S&P/TSX Venture Composite Index after the close of trading on Thursday, May 26, 2011:
Rare Element Resources Ltd. (TSXVN:RES) will be removed from the index.
The company will graduate to trade on TSX under the same ticker symbol. Rare Element will remain a constituent of the S&P/TSX Venture 30 Index until the next index rebalancing at the end of July, 2011.
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 & Poor
Global X Funds Launches First Canada Preferred ETF (CNPF)
May 25, 2011--Global X Funds, the New York based provider of exchange traded funds, today launched the Global X Canada Preferred ETF (Ticker: CNPF). This is the first ETF to target Canadian companies that issue preferred stock.
For investors seeking income, preferred shares are an asset class worth considering due to their unique combination of bond and equity characteristics. Like bonds, preferred shares generally pay stable dividends with more frequent distributions than common shares. Like equity, preferred shares trade on an exchange and have the potential to appreciate in value, offering additional income growth potential for investors. Moreover, preferred shareholders have priority over common shareholders with regard to claims on company earnings and assets, which provide some downside protection.
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Source: Global X
