Americas ETP News
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Horizons ETFs Enters Latin American Market in Joint Venture With Grupo InterBolsa
October 25, 2012-- Horizons ETFs Management (USA) LLC ("Horizons USA"), a subsidiary of Mirae Asset Global Investments Co., Ltd. ("MAGI") has entered into a definitive agreement with InterBolsa USA Holdings, Inc. ("InterBolsa USA Holdings"), a subsidiary of Grupo InterBolsa to launch a joint venture, Horizons ETFs Management (LATAM) LLC ("Horizons LatAm"), which will sponsor and manage exchange traded funds ("ETFs") in Latin America.
Horizons LatAm will initially focus on listing ETFs in the Colombian market. Horizons USA will have an 80% interest in Horizons LatAm, while InterBolsa USA Holdings have a 20% interest.
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Source:Mirae Asset Global Investments
Canadian Securities Regulators Seek Comment on Amendments Relating to Direct Electronic Access
October 25, 2012--The Canadian Securities Administrators (CSA) announced today it is seeking feedback on proposed amendments to NI 23-103 Electronic Trading (NI 23-103), which would provide a framework for the provision of direct electronic access (DEA).
NI 23-103 outlines the risk and supervisory policies, procedures and controls that must be put in place for dealers to manage the risks associated with electronic trading, including the use of algorithms and high frequency trading. NI 23-103 will be implemented on March 1, 2013 .
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Source: Canadian Securities Administrators
Schapiro: No "Concrete Plans" to Alter Erroneous Trade Rules, After Knight Debacle
October 25, 2012--The Securities and Exchange Commission is not considering any changes to the "clearly erroneous" trade rules that could respond to the type of flood of incorrect orders sent onto the nation's stock markets Aug. 1 by market maker Knight Capital.
"We will always be revisiting rules after particular experiences,'' if there is concern about how the rules are working, chairman Schapiro told Traders Magazine at the annual meeting of the Securities Industry and Financial Markets Association here. "But I wouldn't say there is anything concrete planned," after the Knight incident.
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Source: Traders Magazine
IMF Working paper-Financial Spillovers to Chile
October 24, 2012--Summary: This paper quantifies financial spillovers from global risk factors to banks' funding costs in Chile. It decomposes Chilean banks' bond and interbank spreads into domestic and external factors.
The results suggest moderate spillovers. On average, global spillovers pushed up bank bond and interbank spreads in Chile by about 50 basis points in 2008–12. While in 2008–09, most spillovers originated in the U.S., in mid-2010 onwards, European distress played a prominent role.
view the IMF Working paper--Financial Spillovers to Chile
Source: IMF
FOMC statement
October 24, 2012--Information received since the Federal Open Market Committee met in September suggests that economic activity has continued to expand at a moderate pace in recent months.
Growth in employment has been slow, and the unemployment rate remains elevated. Household spending has advanced a bit more quickly, but growth in business fixed investment has slowed. The housing sector has shown some further signs of improvement, albeit from a depressed level. Inflation recently picked up somewhat, reflecting higher energy prices. Longer-term inflation expectations have remained stable.
Nasdaq Plays Down High-Speed-Trade Impact
October 24, 2012--The top executive of Nasdaq OMX Group Inc. said a marketwide slide in high-frequency trading volume won't have a material impact on the exchange operator.
Chief Executive Robert Greifeld said high-frequency trading accounts for only about $50 million in annual revenue at Nasdaq, which is expanding its technology and corporate services to become less reliant on handling stock and derivatives transactions. In 2011, Nasdaq had $1.69 billion in revenue.
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Source: Wall Street Journal
SEC's Schapiro Considers Ways To Rein In Fast Traders
October 24, 2012--Securities and Exchange Commission Chairman Mary Schapiro has floated a series of possible regulations the agency could impose to rein in high-speed traders.
"We're looking at a wide variety of additional measures to bolster market resiliency," Ms. Schapiro told Fox Business Network on Tuesday in response to a question about concerns stemming from computerized trading.
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Source: Wall Street Journal
ProShares files with the SEC
October 24, 2012--ProShares has filed an order for exemptive relief with the SEC.
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Source: SEC.gov
ISE PR ISE Expands Execution Capabilities for Multi Legged Strategy Orders with Stock Options
New Stock Execution Venues Include Deutsche Bank, Getco, Instinet LLC and Knight
October 24, 2012--The International Securities Exchange (ISE) today announced that it has significantly expanded its execution capabilities for multi-legged strategy orders that include a stock component.
The stock leg of these orders will now be able to access liquidity at Deutsche Bank, Getco, Instinet LLC and Knight, in addition to ISE’s existing routing capabilities to ConvergEX. The addition of multiple venues for stock execution will enhance the fill rate and execution quality for multi-legged options orders with stock, such as buy-writes and delta neutral orders. ISE currently supports multi-legged orders of up to eight options legs and one stock leg.
Boris Ilyevsky, Managing Director of ISE’s options exchange, said, “The addition of new venues to source liquidity for the stock component of buy-writes and delta neutral orders will substantially improve the execution quality of these orders. ISE already offers industry-leading capabilities for trading multi-legged strategy orders, and this latest enhancement demonstrates our commitment to continually improve upon our offering.
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Source: International Securities Exchange (ISE)
DB-Synthetic Equity & Index Strategy-North America-Weekly ETF Market Review-ETP inflows of $8.5bn show risky assets remain favored by investors
October 23, 2012--Net Cash Flows Review
Markets fared better outside the US during the previous week. The MSCI EAFE (in USD) and the MSCI EM (USD) rose by 2.52% and 1.00%, respectively. Although the broad US market (S&P 500) didn't move much, some sectors experienced significant momentum.
US Materials was up by 2.14%, while US Technology was down by 2.1%. In the fixed income side, credit outperformed rates, with the 10Y US Treasury Yield rising by 10bps. Within commodities, all sectors experienced downside pressure with the exception of the Agriculture segment which was up by 1.45% (DB Diversified Agriculture Index).The USD was mixed, and Volatility (VIX) rose by 5.70% during last week.
The total US ETP flows from all products registered $8.51bn (+0.7% of AUM) of inflows during last week vs $3.38bn (-0.3%) of outflows the previous week, setting the YTD weekly flows average at +$3.3bn (+$140.13bn or +13.4% YTD in total cash flows).
Equity, Fixed Income, and Commodity ETPs experienced flows of +$6.80bn (+0.8%), +$1.95bn (+0.8%), -$0.28bn (-0.2%) last week vs. -$4.64bn (-0.5%), +$0.96bn (+0.4%), +$0.37bn (+0.3%) in the previous week, respectively.
US-focused equity ETFs recorded inflows of $3.5bn (+0.6%), with most of it flowing into the large cap segment. Among US sectors, Materials (+$0.4bn, +5.3%) and Healthcare (+$0.3bn, +2.5%) received the top inflows, while Energy (-$0.4bn, -1.6%) and Technology (-$0.3bn, -1.6%) experienced the largest outflows. Emerging Market ETFs recorded significant inflows as well, mostly driven by EM broad (+$1.0bn, +1.0%), China (+$0.7bn, +9.4%), and Brazil (+$0.5bn, +5.2%) ETFs. Finally, Corporate ETFs experienced inflows of $1.5bn (+1.5%).
Top 3 ETPs & ETNs by inflows: SPY (+$2.7bn), EEM (+$1.0bn), FXI (+$0.7bn)
Top 3 ETPs & ETNs by outflows: IWM (-$0.4bn), GLD (-$0.4bn), XLE (-$0.3bn)
New Launch Calendar: Broad range of new products
There were 3 new ETFs and 1 new ETN listed during the previous week. All of the products, but one, were listed in the NYSE Arca; while the remaining product was listed in NASDAQ. The new products offer access to US mortgage REITs, core emerging markets, low vol + high income, and US TIPs.
Turnover Review: Floor activity increased by 16%
Total weekly turnover increased by 16% to $271bn vs. $234bn from the previous week. However, last week's turnover level was 28% below last year's weekly average. Equity, Fixed Income and Commodity ETPs turnover increased by $32.1bn, $3.1bn and $1.9bn the previous week, respectively.
Assets under Management (AUM) Review:
ETP assets still near $1.3 trillion
US ETPs assets rose by 0.9% to $1.29 trillion during the previous week. As of last Friday, US ETPs have accumulated an asset growth of 23.3% YTD. Assets for equity, fixed income and commodity ETPs moved +$12.7bn, +$2.0bn, and -$2.6bn during last week, respectively.
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Source: Deutsche Bank -Synthetic Equity & Index Strategy-North America
