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Eurex to Launch First Futures Contract Based on Asian index
October 11, 2009--The international derivatives exchange Eurex announced today, that it will launch a new equity index future based on the MSCI Japan on 26 October 2009. With this extension, Europe’s largest derivatives exchange continues to broaden its coverage of major foreign benchmark indices. The new future will be its first derivative based on an Asian equity index.
“The MSCI Japan future extends our existing suite of foreign equity indices, among them the MSCI Russia future”, said Peter Reitz, member of the Eurex Executive Board. “Nowadays, many participants in financial markets invest globally. The Japanese cash market is the largest and most important market in Asia. With our MSCI Japan future we enable our European and US customers, in particular, to better hedge their Japanese equity exposure and offer at the same time new trading opportunities.” He pointed out, that the MSCI Japan index represents approximately 85 percent of the market capitalization of Japanese stocks. The MSCI Japan index comprises nearly 350 of the largest companies listed on the main Japanese cash markets.
The new future will be denominated in US dollar, settled in cash and will have quarterly expiration dates. As underlying it uses the net total return version of the MSCI Japan, which is the standard in the OTC market (Total Return Swaps) as well as with investment funds and exchange-traded funds.
To support order book trading, a market making scheme will be initiated to ensure on-screen liquidity. Trading hours will be from 8 am until 10 pm CET. In order to be in line with the Japanese market, settlement day will be the second instead of the third Friday, usually used for other Eurex index futures.
Source: Eurex
New iShares strategy ETF launched on Xetra
An additional equity based index fund from the ETF offering of iShares
(Barclays Global Investors) has been admitted to trading on Xetra®.
October 11, 2009--ETF name: iShares DJ STOXX Global Select Dividend 100 (DE)
Asset class: equity index ETF
ISIN: DE000A0F5UH1
Management fee: 0.47 percent
Distribution policy: distributing
Benchmark: DJ STOXX Global Select Dividend 100 Index
The new iShares ETF tracks the performance of the DJ STOXX Global Select
Dividend 100 Index, which enables investors a worldwide diversification
with
their investment in companies with high dividend yields. The index
comprises 40
companies from North-America, 30 from Europe and another 30 from the
Asian-Pacific region which distribute the highest dividends in relation to
their share price.
Source: Deutsche Börse
New iShares strategy ETF launched on Xetra
An additional equity based index fund from the ETF offering of iShares
(Barclays Global Investors) has been admitted to trading on Xetra®.
October 11, 2009--ETF name: iShares DJ STOXX Global Select Dividend 100 (DE)
Asset class: equity index ETF
ISIN: DE000A0F5UH1
Management fee: 0.47 percent
Distribution policy: distributing
Benchmark: DJ STOXX Global Select Dividend 100 Index
The new iShares ETF tracks the performance of the DJ STOXX Global Select
Dividend 100 Index, which enables investors a worldwide diversification
with
their investment in companies with high dividend yields. The index
comprises 40
companies from North-America, 30 from Europe and another 30 from the
Asian-Pacific region which distribute the highest dividends in relation to
their share price.
Source: Deutsche Börse
FESE Response To CESR Proposal For A Pan-European Short Selling Disclosure Regime
October 9, 2009--The Federation of European Securities Exchanges (FESE) represents the Market Operators of 42 securities
exchanges active in equities, bonds, and derivatives in the European Union (EU) and Iceland, Norway and
Switzerland.
We welcome the work that CESR has carried out since September 2008 with regard to the measures adopted by its
Members on short selling practices. Several EU securities regulators have adopted measures introducing stringent
disclosure / reporting requirements by firms to supervisory authorities.
We understand the rationale behind the
measures taken by the authorities as extreme market conditions triggered extreme measures to seek restoring
confidence in the markets. However, notwithstanding the laudable intentions, the restrictions imposed by several
authorities in the EU have been both discriminatory and ineffective:
1) The restrictions on short-selling have been discriminatory because of their scope of instruments and venues.
Firstly, in some jurisdictions the short-selling restrictions applied to certain cash equities only and did not cover other instruments that fulfil a similar function in the market (e.g. futures and options that allow investors to profit when the stock or the index declines).
Secondly, the restrictions applied only to cash equities admitted to trading on a Regulated Market (RM) and not to privately-issued stocks.
Thirdly, in some regimes, the restrictions did not cover trading happening outside of RMs - therefore, the banned stocks could be traded on private markets without limitations. The discriminatory nature of these measures was mainly due to the absence of an appropriate legislative framework that covers instruments traded in multiple execution venues under the supervision of different authorities across Europe. As a result, this situation provided unfair advantages to private OTC markets vis-à-vis RMs (and MTFs) whilst shifting the presumed risk to other venues and instruments not caught by the ban.
2) The restrictions on short-selling have not been effective in reducing share price volatility or limiting share price falls, but rather caused a decline in market efficiency for the affected stocks.
read response
Source: Federation of European Securities Exchanges (FESE)
FESE European Equity Market Report – September 2009 Figures
October 9, 2009--The ‘European Equity Market Report’ which gathers data from all the market segments operated by FESE members (including Regulated Markets and Multilateral Trading Facilities) as well as from the major MTFs operated by investment firms in the European market.
For the first time since the start of MiFID, this Report allows for an accurate comparison of trading statistics across trading venues
European Equity Market Report - Year 2009 (updated with September figures)
Source: FESE
Equity income funds set for comeback
October 9, 2009--Equity income funds, which have suffered in the past year as UK companies cut dividends, could be set for a comeback.
Once a favoured pick of private investors and financial advisers, the funds have suffered a rapid fall from grace.
In August, they were the least popular of all the UK’s managed funds, according to figures from the Investment Management Association. But as recently as September 2008 they were the best-selling funds overall.
read full story
Source: FT.com
LSE Falls To All-Time Low FTSE 100 Market Share - BATS Europe Sets 2nd Straight Record With 9.69%
October 9, 2009--LSE recorded its second consecutive all-time market share low in the FTSE 100 with 57.96% today as BATS Europe set its second record in a row – 9.69%.
BATS Europe was actually well above 10% (10.61%) prior to the LSE’s closing auction. With our September UK pricing special behind us, it is good to see market share increasing across the board – our 4.38% market share today for all of Europe was also a record.
Source: Online News
ETF Landscape: Industry Review, September 2009
October 9, 2009--At the end of August, global ETF assets hit an all time high of US$891Bn, 3.9% above the previous all time high of US$858Bn set in July 2009.
There were 1,773 ETFs with 3,137 listings from 95 providers on 41 exchanges around the world.
Visit Barclays Global for more information.
Source: ETF Research and Implementation Strategy, BGI
Regulators criticise 'unworkable' EU plans for hedge fund reform
October 9, 2009--Eddy Wymeersch, chairman of the Committee of European Securities Regulators (CESR), said the proposed legislation on alternative investment funds was unworkable and needed a rethink.
"I hope they will come forward with something more balanced," he said. "It really doesn't work. They have pooled everything together, the scope is absolutely too wide, everything is caught."
Its opposition to the current proposals is a major boost to the trade bodies and other critics of the directive, including London Mayor Boris Johnson, who have been campaigning vociferously against the legislation.
They argue the EU's measures are a knee-jerk response to the credit crisis that would destabilise the financial sector in the UK where 80pc of the hedge funds and 60pc of private equity firms are based.
read more
Source: Telegraph.co.uk
EDHEC warns that the proposed revision to IAS 19 would lead pension funds to shed risky assets
October 9, 2009--n a new position paper produced as a response to the proposed revision to IAS 19 by the International Accounting Standards Board (IASB), EDHEC has shown that the immediate recognition of the volatility of pension surpluses and deficits in the profit and loss accounts of the sponsor may lead pension funds to shed risky assets.
According to EDHEC, the IASB proposal gives pension funds no incentives to manage risk properly; instead, by suggesting that pension assets and liabilities can be considered held for trading, pension funds are given incentives to shed these liabilities.
The author of the report, Samuel Sender, Applied Research Manager with EDHEC-Risk, puts forward the following arguments in this position paper:
EDHEC firmly warns the IASB against the temptation to suppress the corridor approach, whereby actuarial gains and losses which fall within a corridor need not be recognised, as this would lead to a significant reduction in holdings of risky assets in pension funds.
EDHEC supports smoothing market yields as a way to filter out market noise.
EDHEC also supports the amortisation of pension surpluses and deficits, in a manner consistent with the general treatment of long-term assets and liabilities.
Finally, EDHEC recommends that pension funds use the projected benefit obligation to compute pension cost but that they report the accrued benefit as the pension liability in their balance sheet, a measure that would then be consistent with the prudential measure of pension liabilities.
This study was produced by EDHEC-Risk as part of the AXA Investment Managers ‘Regulation and Institutional Investment’ research chair.
The position paper “IAS 19 – Penalising changes ahead” can be downloaded by clicking on the following link:“IAS 19 – Penalising changes ahead”
Source: EDHEC
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