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DB-Synthetic Equity & Index Strategy-Asia-Pac Weekly ETF Market Review-Japan focused ETFs bring $1bn inflows
August 13, 2013--Data in this report is as of 9 August 2013.
Market Review
Last week, all the major markets in the Asia-Pacific region remained in negative territory except China. Compared to the week before, from north to south:
Japan (Nikkei 225) -5.88%
South Korea (KOSPI2) -2.49%
China (CSI 300) +1.72%
Hong Kong (HSI) -1.73%
Singapore (FSSTI) -0.74%
Australia (S&P/ASX 200) -1.20%
New Product Launch Review
Last week, one new product was launched in the Asia-Pacific ETP market. Harvest Fund Management listed one fixed Income ETF (159926 CH) on Shenzhen Stock Exchange tracking medium term Chinese sovereign bonds. This is the second ETF listed in Asia-Pacific region providing exposure to Chinese sovereign bonds. Previously, Guotai Asset Management has issued one fixed income ETF (511010 CH) with a focus on 5-year Chinese sovereign bonds.
ETP Weekly Cash Flows -Japan received $1bn flows
Last week, Asia-Pacific ETP market recorded cash inflows of +$932mn vs. +$300mn of inflows for the previous week, setting the YTD weekly flows average at +$394mn (+$12.6bn YTD in total cash flows). Developed markets equity ETFs collected largest weekly cash inflows of +$1bn while Emerging markets ETFs lost -$203mn in cash outflows over the last week. On a country level, ETFs benchmarked to Japan received +$1bn of cash inflow while Taiwan experienced weekly outflows of -$133mn.
At ETP level, largest inflows were dominated by ETFs benchmarked to Japan where Nomura Nikkei 225 ETF (1321 JP), Nikko ETF Topix (1308 JP)) and Topix ETF (1306 JP) received weekly cash flows of +$220mn, +$190mn and +$182mn respectively. Over the same period, biggest outflows were experienced by Fubon MSCI Taiwan ETF (0057 TT) recording -$105mn of outflows.
Turnover Review – Floor activity up by 3.5%
Asia-Pacific ETP turnover totaled $12.2bn for the last week, 3.5% above from the previous week’s total. Japan took the lead in the turnover ranking with $4.8bn turnover, followed by Korea ($2.8bn), China ($2.7bn) and Hong Kong ($1.4bn). Among equity ETFs, leveraged long, emerging country, Asia-Pacific developed country and short ETFs had total turnover of $4.2bn, $3.9bn, $1.9bn and $0.8bn respectively. Within the commodity asset class, turnover in gold ETPs totaled $89mn.
Assets under Management Review – Assets lost $0.9bn
Last week, Asia-Pacific ETP AUM reduced by $0.9bn, and ended the week at $155.1bn. On a year-to-date basis, Asia-Pacific ETP market is up by $19.2bn or 14.1% above last year’s closing.
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Source: Deutsche Bank-Synthetic Equity & Index Strategy-Asia
ETF Securities Precious Metals Weekly-Silver Shines on Optimistic Sentiment Shift
August 12, 2013--Precious metals increasingly pricing in potential for tapering of Fed bond
buying. A weaker US dollar, declining equity prices and improvement in Chinese
economic data supported precious metals (PMs) last week.
Silver led the PM sector higher, rallying 4.4% to end the week back above US$20/oz. Gold shrugged off what appeared to be coordinated fed-speak regarding potential tapering of the QE bond buying program in September, ending the week unchanged but above US$1,300/oz. Supported by improving global economic prospects and strong physical demand, the more industrial sensitive PMs also benefited from rising sentiment. Platinum bumped up against US$1,500 resistance
for the first time since June, gaining 3.9% on the week and widening its premium above gold to 14%. The PM market recovered from weakness earlier in the week, benefiting from a growing sentiment shift favouring the PMs relative to equities.
With the backdrop of very low equity volatility and the S&P 500 up 19% on the year compared to a 21% decline in gold, we expect the performance differential between gold and the S&P 500 to narrow rather than widen as the market increasingly prices in the reduction of US Federal reserve accommodation.
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Source: ETF Securities Research
TSE-ETF/ETN Monthly Report for Jul 2013
August 9, 2013--Continued vibrancy pushes the ETF/ETN market to its third highest monthly trading value on record.
Trading in the ETF/ETN market continued to be active in July. Monthly trading value reached about 1.67 trillion yen with daily average of about 76 billion yen.
A monthly decline in the trading value of the ETF/ETN market did not affect the popularity of leveraged and inverse ETFs among investors. Trading of "NEXT FUNDS Nikkei 225 Leveraged Index ETF (1570)" remained robust with trading value in excess of 800 billion yen. The trading value of "Nikkei 225 Bull 2x ETF (1579)," which was newly listed in May, also rose significantly from last month.
Investors were drawn to certain issues, such as "NEXT NOTES HSI Leveraged ETN (2031)" whose trading value was boosted significantly by the rising Hang Seng Index.
view the TSE ETF/ETN Monthly Report for Jul 2013
Source: Tokyo Stock Exchange (TSE)
Nikkei-TOCOM Commodity Index to Include Agricultural Product & Sugar Market
Contracts as Components from December 2, 2013
August 9, 2013--The Tokyo Commodity Exchange (TOCOM) and Nikkei announced today that Agricultural Product & Sugar Market commodities, including soybeans, azuki, corn and raw sugar, will be added as components of the Nikkei-TOCOM Commodity Index and the Nikkei-TOCOM Nearby Month Commodity Index.
The addition is scheduled to begin on December 2, 2013. The two companies, which have jointly published the indexes since April, 2009, will also revise the component weightings of the subject indexes and calculate sub-indexes with the newly added contracts.
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Source: Tokyo Commodity Exchange (TOCOM)
DB-Synthetic Equity & Index Strategy-Asia-Pac Weekly ETF Market Review-New product launches bring diversity
August 9, 2013--Data in this report is as of 31st July 2013
Monthly Trends-Asia Pacific
Market Review
Last month, Asia-Pacific region had mixed markets. Compared to the month before, from north to south:
Japan (Nikkei 225) -0.07%
Korea (KOSPI2) +2.36%
China (CSI 300) -0.35%
Hong Kong (HSI) +5.19%
Singapore (FSSTI) +2.27%
Australia (S&P/ASX 200) +5.19%
New ETP launches-More diversity to the existing product range
During July, Asia-Pacific ETP market saw six new product launches-three within equity, two in commodity and one in fixed income asset class.
Equity: China Universal Asset Management listed one equity ETF on the Hong Kong Exchange tracking the CSI 300 index. This was the sixth ETF under RQFII program which allows overseas investors to access the China A-share market.
BetaShares Capital listed one fundamental strategy based equity ETF (QOZ AU) providing exposure to the performance of the Australia listed top 200 companies as measured by fundamental size. This ETF was listed on the Australian Securities Exchange. Another equity ETF (WXHG AU) was listed on the Australian Securities Exchange by State Street GA. This ETF tracks the S&P Developed ex-Australia LargeMidCap AUD Hedged Index. Earlier this year, State Street GA launched an ETF (WXOZ AU) which tracks unhedged version of the same index.
Commodity: Guotai Asset Management (518800 CH) and Huaan Fund Management (518880 CH) listed their first gold ETFs on the Shanghai Stock Exchange. These were the first commodity ETP launches in the Chinese market ever. Previously, only equity and fixed income products were available to invest in China.
Fixed Income: Deutsche Bank (SH8 SP) launched the only fixed income ETF during July. The fund was listed on the Singapore Exchange and tracks the Markit iBoxx ABF Indonesia Government bond Index. This is the first ETF which provides exposure to Indonesian sovereign bonds. Previously, Deutsche Bank had issued one equity ETF (XMIN SP) with a focus on Indonesian equity markets.
Further, BlackRock cross listed its three equity ETFs (1582 JP, 1581 JP & 1583 JP) on Tokyo Stock Exchange tracking MSCI Kokusai, MSCI EM IMI and MSCI Frontier Markets 100 Index respectively. These ETFs are primarily listed in the US.
Cash flows: South Korea and Taiwan equities see healthy inflows Last month, Asia-Pacific ETP market recorded moderate cash inflows of +$0.5bn setting the YTD monthly flows average at +$1.6bn (+$11.4bn YTD in total cash flows). EM equity ETFs outperformed DM equity ETFs and amassed inflows of +$1.3bn, driven by positive flows into South Korea (+$0.8bn) and Taiwan (+$0.7bn) focused ETFs. DM ETFs witnessed outflows of -$0.4bn which were primarily contributed by Japan and Hong Kong focused ETFs, each recording -$0.2bn of outflows. Leveraged long strategy ETFs saw largest redemptions for the month totaling -$0.7bn.
Fixed income ETFs contributed +$230mn of cash inflows in July and money market ETFs were the primary gainers recording +$131mn inflows.
Winners and losers: At ETP level, the largest inflows were received by Mirae Asset’s MAPS TIGER 200 ETF (102110 KS), Fubon MSCI Taiwan ETF (0057 TT) and Polaris MSCI Taiwan Index Fund (006203 TT) collecting +$565mn, +$314mn, +$260mn respectively. While the largest redemptions were experienced by Samsung KODEX Leverage ETF (122630 KS), Daiwa Topix ETF (1305 JP) and China CSI 300 Index ETF (83188 HK) with outflows of -$463mn, -$271mn and -$268mn respectively.
Last three months: ETFs focused on Japan & Hong Kong (DM) and South Korea, China & Taiwan (EM) witnessed significant cash flow activity in the last three months. Japan focused ETFs attracted +$6.2bn inflows from May’13 to Jul’ 13 while ETFs benchmarked to China recorded outflows of -$0.8bn over the same period.
Turnover: Floor activity down by 11% on a month-over-month basis Asia-Pacific ETP turnover totaled $54.7bn for July, 10.9% down from the previous month’s total when floor activity soared. On a country level, stock exchanges in Japan topped the turnover ranking with aggregate turnover of $16.7bn. South Korea ($15.1bn), China ($12.9bn) and Hong Kong ($8bn) followed Japan in the turnover ranking with considerable totals. Among equity ETFs, the emerging country, leveraged long, Asia-Pacific developed country, and short ETFs were the most traded products recording total turnovers of $20bn, $16.4bn, $7.6bn, and $4.4bn respectively. Within the commodity asset class, turnover in gold ETPs totaled $417mn.
AUM-Assets increased by 1.3% in July Last month, Asia-Pacific ETP AUM added $1.9bn and closed the month at $151.2bn. On a year-to-date basis, Asia-Pacific ETP market is up by $15.3bn or 11.2% above last year’s closing.
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Source: Deutsche Bank-Synthetic Equity & Index Strategy-Asia
Chi-X Global and SBI Japannext set sights on South Korea
August 8, 2013--South Korea is set to become the third Asian equities market to open to competition between exchanges and upstart trading venues after Chi-X Global and SBI Japannext, both backed by large banks, said they were exploring entering the country.
The moves are a sign that the breaking of longstanding national exchange monopolies and equity market fragmentation – a trend that has swept Europe in the past six years – is gathering pace in Asia.
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Source: FT.com
ICICI Prudential Mutual Fund launches CNX 100 ETF
August 6, 2013--The investors in this fund will also benefit from the tax exemptions under section 80CCG of the Income Tax Act, 1961, as this fund qualifies for RGESS.
ICICI Prudential AMC announced the launch of ICICI Prudential CNX 100 ETF, an open ended Index Exchange Traded Fund that constitutes 100 most liquid large cap stocks listed on the NSE.
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Source: IIFL
China money rates fall after c.bank injects funds
Key 7-day money rate slumps 20 bps to 4.15 pct
C.bank injects 12 bln yuan into market, yield at 4 pct
Stable money rates seen
August 6, 2013--China's money rates fell slightly on Tuesday after the People's Bank of China (PBOC)
injected funds through open market operations, bolstering
confidence that the central bank is maintaining rate stability.
The PBOC injected 12 billion yuan ($1.96 billion) into the
money markets through seven-day reverse bond repurchase
agreements on Tuesday.
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Source: Reuters
IMF Japan: Selected Issues
August 5, 2013--DETERMINANTS OF LONG-TERM INTEREST RATES IN JAPAN AND IMPLICATIONS UNDER THE GOVERNMENT'S NEW POLICIES1
This note examines the key determinants of long-term sovereign yields using a panel of the main
advanced economies. Empirical results suggest that Japan's forward rates are determined by fiscal conditions, demography, growth and the inflation outlook, and the investor base of government securities.
Deteriorating fiscal conditions would push up long-term rates by about 2 percentage points over the medium term, but the effect is partly offset by higher demand for safe assets amid population aging and increased purchases by the Bank of Japan (BoJ). A widening trade deficit, surprisingly, only contributes modestly to long-term yields, in part because of Japan’s sizeable net foreign assets holdings.
A. Background
1. In April 2013, the BoJ has introduced a new quantitative and qualitative monetary easing (QQME) framework by doubling the purchase size of Japanese government bond (JGB) and extending the average maturity of JGB holdings in an effort to meet the 2 percent inflation target and lift growth (text chart). The QQME is part of the government's three-pronged approach to revitalize Japan—also known as Abenomics—that includes flexible fiscal policy, aggressive monetary easing, and structural reforms.
view the IMF Japan: Selected Issues report
Source: IMF
First Metro registers ETF with corporate regulator
August 5, 2013--FIRST METRO Investment Corp. (FMIC) has filed with the Securities and Exchange Commission (SEC) incorporation papers of its exchange traded fund (ETF), the corporate regulator said in a notice published in a newspaper yesterday.
SEC announced that "...on July 19, a sworn registration statement was filed with the SEC on behalf of First Metro Philippine Equity Exchange Traded Fund, Inc. for registration of 30 million common shares with par value of P100 or an aggregate price of P3 billion, representing its entire authorized capital stock."
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Source:Business World Online
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