Global ETF News Older than One Year
Global IPO Market Bounces Back in 2017
December 15, 2017--In the wake of all time market highs, global IPO issuance bounced back in 2017, reversing a trend of decline in the previous two years as the outlook for global economies improved. Global IPOs raised $141 billion in 2017, up 33% from 2016's subdued levels and above the $138 billion ten-year median.
The rebound in IPO activity was led by issuance in North America (24% of proceeds; +109% y/y) and Europe (28%; +44%), thanks to large deals like Snap, Allied Irish Bank and Pirelli. While the financial sector held its lead with 21% share of proceeds, 2017 saw more diversified issuance. In particular, activity from the tech sector picked up strongly in 2017 (proceeds rose 122%). Tech IPOs were also among the best performers, including strong returns from Roku, Foxconn and China Literature. Global performance was steady, returning 15% ex-China thanks to continued strength from US and Asia Pacific IPOs.
Source: Renaissance Capital
DECPG Global Weekly
December 15, 2017--Taking Stock
U.S. Federal Reserve raised interest rates; core inflation edged down in November. As expected, the Federal Open Market Committee (FOMC) raised its benchmark federal funds rate by 25 basis points to a range of 1.25-1.5 percent at its December meeting, citing continued growth and strong job creation.
Meanwhile, core consumer price inflation-which excludes food and energy prices-edged down to 1.7 percent (y/y) in November, from 1.8 percent in October (Figure 1), indicating that underlying inflation remains subdued.
ECB kept monetary policy unchanged; Euro Area composite PMI hit an almost 7-year high in December. At its December meeting, the European Central Bank (ECB) left the main refinancing rate and the interest rates on the lending and deposit facilities at zero, 0.25 percent, and negative 0.4 percent, respectively-in line with expectations.
Source: World Bank
IMF Working Papers-A Model to Assess the Probabilities of Growth, Fiscal, and Financial Crises
December 14, 2017--Summary:
This paper summarizes a suite of early warning models to assess the probabilities of growth, fiscal, and financial crises in advanced economies and emerging markets. We estimate separate signal-extraction models for each type of crisis and sample of countries, and we use our results to generate "histories of vulnerabilities" for countries, regions, and the world.
For the global financial crisis, our models report that vulnerabilities in advanced economies were rooted in the bursting of leveraged bubbles, while vulnerabilities in emerging markets stemmed from lengthy booms in credit and asset prices combined with growing weaknesses in the corporate and external sectors.
Source: IMF
Fed Tightening May Squeeze Portfolio Flows to Emerging Markets
December 14, 2017--A key question facing global investors today is what impact the US Federal Reserve's monetary policy normalization process will have on capital flows to emerging markets. The IMF's new model estimates show that normalization-raising the policy interest rate and shrinking the balance sheet-will likely reduce portfolio inflows by about $70 billion over the next two years, which compares with average annual inflows of $240 billion since 2010.
Shrinkage in the Fed's $4.5 trillion balance sheet, which began in October, accounts for most of the impact on portfolio flows-defined as foreign purchases of emerging market stocks and bonds. Reduced availability of foreign capital could make it more challenging for emerging market economies to finance their deficits and roll over maturing debt.
Source: IMF
IMF Working Papers -International Commodity Prices and Domestic Bank Lending in Developing Countries
December 14, 2017--Summary:
We study the role of the bank-lending channel in propagating fluctuations in commodity prices to credit aggregates and economic activity in developing countries. We use data on more than 1,600 banks from 78 developing countries to analyze the transmission of changes in international commodity prices to domestic bank lending.
Identification relies on a bankspecific time-varying measure of bank sensitivity to changes in commodity prices, based on daily data on bank stock prices. We find that a fall in commodity prices reduces bank lending, although this effect is confined to low-income countries and driven by commodity price busts. Banks with relatively lower deposits and poor asset quality transmit commodity price changes to lending more aggressively, supporting the hypothesis that the overall credit response to commodity prices works also through the credit supply channel. Our results also show that there is no significant difference in the behavior of foreign and domestic banks in the transmission process, reflecting the regional footprint of foreign banks in developing countries.
Source: IMF
ETF Securities Investment-Gold, Oil, and Inflation in 2018
December 14, 2017--Summary
Gold may remain flat for 2018 but remains an attractive tool to hedge against potential market volatility and geopolitical risks.
Oil prices may weaken due to rising US production despite falling global inventories and elevated political risk premia.
Inflation may persistently rise throughout 2018.
Macro Outlook
The world is currently experiencing synchronous growth supported by massive central bank stimulus. There are, however, indications that developed markets are likely close to their cycle highs, and a period of slower growth potentially lies ahead. While we think that the world economy will escape a significant upset in 2018, there remain formidable tail risks.
Source: etfsecurities.com
World's Biggest Pension Fund Says AI Will Replace Asset Managers
December 14, 2017--GPIF's Mizuno: Google, Amazon could become largest managers
Traditional managers need to update business models, he says
Hiromichi Mizuno was named chief investment officer of Japan's Government Pension Investment Fund, the world's biggest manager of retirement savings, in 2014. He has since led a push to increase equity holdings and advocated for incorporating ESG, or environmental, social and governance, factors into investing.
Source: Bloomberg
Bitcoin Points Way to 'Massive Change' for Commodity Businesses
December 13, 2017--Blockchain ledgers can cut trading costs, minimize fraud risk
Promise of more security, fewer documents draws BP, Tyson, UBS.
Blockchain is upending the world's financial markets with the rise of bitcoin, and now the digital-ledger system is poised to do the same next year for raw materials like food and energy.
Source: Bloomberg
OPEC-Monthly Oil Market Report-December 2017
December 12, 2017--Oil Market Highlights
Crude Oil Price Movements
The OPEC Reference Basket surged near 10% to $60.74/b in November, its highest since June 2015. Crude futures prices improved further to levels not seen since summer 2015. Continuing bullish oil market fundamentals and optimism that OPEC and non-OPEC would extend the production adjustment which would support the oil market over November...
World Economy
The global GDP growth forecast remains at 3.7% for both 2017 and 2018. US growth was revised up in both 2017 and 2018 to 2.3% and 2.5% respectively. Growth in the Euro-zone remains unchanged at 2.3% in 2017 and 2.1% in 2018. Japan's growth in 2017 remains unchanged at 1.6%, while 2018 expectations have been lifted to 1.4%...
World Oil Demand Global oil demand is projected to grow at around 1.53 mb/d in 2017, in line with last month's forecast. China is projected to lead oil demand growth in the non-OECD, followed by Other Asia-which includes India-and OECD Americas. In 2018, world oil demand is expected to grow by 1.51 mb/d.
Source: OPEC
Leading cryptocurrency exchange faces outages as bitcoin rivals surge
December 12, 2017--Litecoin, a leading bitcoin rival, has soared 150 percent in four days.
This month's cryptocurrency boom isn't limited to bitcoin. Over the last 24 hours, two of bitcoin's biggest rivals-Litecoin and Ethereum's ether-have enjoyed huge price gains.
Trading volume has been so intense that one of the leading cryptocurrency exchange services, Coinbase, has suffered downtime.
Source: arstechnica.com
