Global ETF News Older than One Year
Global FDI recovery derails
Global foreign direct investment declined by 18 per cent in 2012-a level close to the trough reached in 2009-due mainly to macroeconomic fragility and policy uncertainty for investors.
January 24, 2013--Global foreign direct investment (FDI) inflows declined by 18 per cent in 2012, down from $1.6 trillion in 2011 to an estimated $1.3 trillion.
The strong decline of FDI flows is in stark contrast to other macroeconomic variables, including gross domestic product (GDP), trade and employment growth, which all remain in positive territory.
The FDI recovery that had started in 2010 and 2011 will now take longer than expected. FDI flows could rise moderately to $1.4 trillion in 2013 and $1.6 trillion in 2014, due to slight improvements in macroeconomic conditions and the reprofiling (e.g. releasing record cash reserves for investment) of transnational corporations (TNCs). However, significant risks to this scenario persist, including structural weaknesses in major developed economies and in the global financial system, and significant policy uncertainty in areas crucial for investor confidence. Should these risks prevail, the FDI recovery could be further delayed.
view the Global Investment Trend Monitor, No. 11
Source: UNCTAD.org
Bankers Call for Better-Not More -Regulation
Leaders of financial institutions disagree over whether the sector is still too complex and opaque
Financial institutions must take risks to fuel economic growth, but these risks must be managed
Regulation is needed, but global regulation may be a challenge in today's rapidly changing, multipolar world
January 23, 2013--Leaders of the world's largest financial institutions participating in the World Economic Forum Annual Meeting today agreed that the sector is still too complex and opaque, with the exception of James Dimon, Chairman and Chief Executive Officer, JPMorgan Chase & Co., USA.
Participants agreed on the need for regulation, but disagreed on how much is too much and whether or not global regulation is possible in today’s rapidly changing, multipolar world.
Source: World Economic Forum
World Economic Outlook Update-Gradual Upturn in Global Growth During 2013
January 23, 2013--Global growth is projected to increase during 2013, as the factors underlying soft global activity are expected to subside. However, this upturn is projected to be more gradual than in the October 2012 World Economic Outlook (WEO) projections. Policy actions have lowered acute crisis risks in the euro area and the United
States.
But in the euro area, the return to recovery after a protracted contraction is delayed. While Japan has slid into recession, stimulus is expected to boost growth in the near term. At the same time, policies have supported a modest growth pickup in some emerging market economies, although others continue to struggle with weak external demand and domestic bottlenecks. If crisis risks do not materialize and financial conditions continue to improve, global growth could be stronger than projected. However, downside risks remain significant, including renewed setbacks in the euro area and risks of excessive near-term fiscal consolidation in the United States. Policy action must urgently address these risks.
Source: IMF
WFE Publishes 2012 Global Market Highlights
Market Capitalization Growth Rate Up, Volume of Exchange-Traded Products Down
January 23, 2013--The World Federation of Exchanges' (WFE) annual survey of global markets found that while the global market capitalization increased 15.1% in 2012, the volume of all products traded on WFE member exchanges fell significantly.
According to worldwide statistics compiled by the WFE, the value of Electronic Order Book (EOB) share trading was down 22.5%, and the number of derivative contracts traded on-exchange decreased by 20%.
“We appreciate our members’ commitment to helping us compile our Annual Market Statistics, as we believe it is important to offer a true, objective picture of the current state of on-exchange trading worldwide,” said Hüseyin Erkan, CEO of the WFE. “Our 2012 Global Market Highlights offers the most comprehensive series of data covering a large range of exchanges’ activities, allowing for a more detailed approach of markets.”
According to the WFE figures, which are gathered from WFE member exchanges, the number of listed companies remained stable in 2012, while both ETFs and securities derivatives increased their listings. Specific 2012 highlights from WFE are as follows:
Equity Markets
In 2012, the WFE global market capitalization increased by 15% reaching US$ 54 trillion, getting back to its end-of 2010 level. The best performance was observed in the Americas (+17.2%) followed by Asia-Pacific (+15.4%) and Europe Africa Middle East (EAME) (+11.6%). In the Americas, the growth was primarily driven by the U.S. exchanges that increased 19%.
read more
Source: World Federation of Exchanges (WFE)
Macro Matters-EM: Economic Recovery Maintains
Investors expect rise in foreign capital inflows to benefit brokerage firms. Moreover, the upward trend was further supported by speculation government may increase investment in green energy as the nation’s capital experienced the worst air pollution in recent years over the weekend.
However, the best news came on Friday. The government reported that the economy expanded at a faster pace than expected. The world’s second largest economy expanded at 7.9% yoy and 7.8% in 4Q12 and 2012, respectively.
India-Market welcomes government’s partial deregulation of diesel price. Indian stock market gained last week with Sensex surpassing the 20,000 pt level. Along with better-than-expected earnings, announcements by the government buoyed market sentiment.
Brazil-BCB maintains the Selic rate flat at 7.25%.
The Brazilian Central Bank (BCB) maintained the Selic rate flat at 7.25% during its January Copom Meeting. The post meeting communiqué highlighted a deterioration in recent inflation risks, alongside a less intense recovery in domestic activity.
Russia-Russia outperformed within emerging markets in Dec.
The US debt ceiling debate will intensify over the coming weeks, causing a potential increase in volatility, however the VIX volatility index is currently at lows not seen since 2007, indicative of the improvement in sentiment in recent months.
Source: Mirae Asset Financial Group
IMF Working paper-Regionalization vs. Globalization
Our model allows us to assess the roles played by the global, regional, and country-specific factors in explaining business cycles in a large sample of countries and regions over the period 1960–2010. We find that, since the mid-1980s, the importance of regional factors has increased markedly in explaining business cycles especially in regions that experienced a sharp growth in intra-regional trade and financial flows. By contrast, the relative importance of the global factor has declined over the same period. In short, the recent era of globalization has witnessed the emergence of regional business cycles. view the IMF Working paper-Regionalization vs. Globalization
Source: IMF
S&P Capital IQ Teams with Clearwater Analytics to Provide Fixed Income Pricing and Reference Data to Financial Professionals Globally Through Secure, Web-Based Investment Accounting Solution
to industry professionals through Clearwater's global investment accounting and reporting platform. The expanded service will be available beginning February 20, 2013.
"Expanding the availability and delivery speed of pricing and descriptive data from S&P Capital IQ through trusted platforms like Clearwater's is yet another way we are working to improve services to financial professionals who manage investments," said Rui Carvalho, Managing Director, S&P Capital IQ. "We are providing access to pricing and descriptive data on over 3 million fixed income securities. S&P Capital IQ Valuations provides investors with a cross-market approach to assessing risk and value in portfolios, offering independent valuations across asset classes for global fixed income securities and hard-to-price instruments using both market and model approaches".
Source: S&P Capital IQ
IOSCO Publishes Suitability Requirements for Distribution of Complex Financial Products
The report, which forms part of IOSCO’s ongoing drive to promote customer protection, introduces nine principles that cover the following areas related to the distribution of complex financial products by intermediaries:
Classification of customers
General duties irrespective of customer classification
Disclosure requirements
Protection of customers for non-advisory services
Source: IOSCO
ETF Securities- Precious Metals Weekly: Platinum Price Surpasses Gold on South African Disruptions
The potential loss in production is equivalent to 7% of total mine supply in 2012 and is expected to tighten result in further tightness in the platinum market. Supply side issues in South Africa are likely to remain the main platinum price driver in 2013. Labour disruptions and production rationalisation are likely to continue to tighten the supply-demand balance, as more companies follow Amplats' example. With nearly 80% of the world's supply of platinum mined in South Africa, supply disruptions and political hurdles in the country can significantly impact the price.
Thomson Reuters GFMS remains bullish gold in 2013, forecasting gold to average an all-time high over the first half of the year. The consultancy company published its latest Gold Survey 2012 update last week, with predictions for the first half of 2013. Despite the sell-off in the last quarter of 2012, Thomson Reuters GFMS expects that extremely accommodative monetary stance from the US Fed and other major central banks and continued sovereign debt concerns will remain in place and will return to the fore this year. While the market appears concerned the Fed may prematurely end its QE program in 2013, other central banks are flooding financial markets with cheap liquidity including the ECB, the Bank of Japan, and potentially more from the Bank of England with a new governor in 2013. Visit www.etfsecurities.com for more info.
Source: ETF Securities
Global Experts Poll: Economic Confidence Improves in First Quarter, Fears Subside
The Economic Confidence Index rose to 0.43 from 0.38 on a scale from 0 to 1, getting closer to optimistic territory amid some positive signs from the Eurozone and a sense that the worst fears for the US “fiscal cliff” debt crisis had been allayed. Regionally, the improvement in confidence was most marked in North America. “The first Economic Confidence Index result of 2013 gives us some cause for optimism, but the figure is still in negative territory overall. We still need dynamic leadership to drive the economy ahead and overcome challenges,” said Martina Gmür, Senior Director of the Forum’s Network of Global Agenda Councils. view results-Global Confidence Index
Source: WEF
January 22, 2013--Economic growth accelerated for the first time in 2 years.
Earlier last week the Chinese A share market by buoyed by news that the market regulation would increase the quota for overseas investors by 10 times.
Indian stock market gained last week with Sensex surpassing the 20,000 pt level. Along with better-than-expected earnings, announcements by the government buoyed market sentiment.
Equities posted further gains in the week ending January 17th, the MSCI Brazil climbing 30bps to sit +6.3% in the month in USD terms. The BRL denominated Ibovespa index rose 80bps and sits +4.4% in the month.
The global asset class has enjoyed a strong December-January period, buoyed by marginally positive, or simply less negative data from Europe, the US and China.
January 22, 2013--Summary: Abstract: Both global and regional economic linkages have strengthened substantially over the past quarter century. We employ a dynamic factor model to analyze the implications of these linkages for the evolution of global and regional business cycles.
January 22, 2013--Recognizing the expanding information needs of corporations, insurance companies, and asset management firms for timely data to manage their portfolios, S&P Capital IQ, a leading provider of multi-asset class data, research and analytics, today announced an agreement with Clearwater Analytics to provide a broad range of fixed income evaluated pricing and terms and conditions data
January 21, 2013--The International Organization of Securities Commissions (IOSCO) today published a final report on Suitability Requirements with respect to the Distribution of Complex Financial Products, which sets out principles relating to the distribution by intermediaries of complex financial products to retail and non-retail customers.
January 21, 2013--The platinum price temporarily surpassed the gold price for the first time in 10 months on Amplats' platinum operations review. A mplats announced a 400koz estimated reduction in production last week deriving from mine closures in an attempt to contain its rising costs.
Economic confidence index ticks up to 0.43 from 0.38 last quarter, closer to optimistic territory of over 0.5
Percentage fearing a major economic disruption for year ahead falls to 48% from 53% last quarter
Seventh quarterly Global Confidence Index polled 390 experts from business, government, international organizations and academia who are members of the Forum’s Network of Global Agenda Councils
January 21, 2013--Confidence in the state of the world economy recovered somewhat in the first quarter of 2013, according to a World Economic Forum poll of 390 experts.
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