Global ETF News Older than One Year
IMF Working paper-Changes in the Global Investor Base and the Stability of Portfolio Flows to Emerging Markets
December 28, 2015--Summary: An analysis of mutual-fund-level flow data into EM bond and equity markets confirms that different types of funds behave differently. Bond funds are more sensitive to global factors and engage more in return chasing than equity funds.
Flows from retail, open-end, and offshore funds are more volatile. Global funds are more stable in their EM investments than "dedicated" EM funds. Differences in the stability of flows from ultimate investors play a key role in explaining these patterns. The changing mix of global investors over the past 15 year has probably made portfolio flows to EMs more sensitive to global financial conditions.
Source: IMF
Deutsche Bank to Sell Stake in Chinese Bank
19.99% ownership of Hua Xia Bank being acquired by PICC Property and Casualty
December 28, 2015--Deutsche Bank AG has agreed to sell its entire stake in Chinese bank Hua Xia Bank Co., the German lender said on Monday.
Deutsche will sell its 19.99% stake to PICC Property and Casualty Co. Ltd., an arm of a Chinese insurer, for between 23 billion yuan and 25.7 billion yuan, depending on the exchange rate, the company said.
Source: Wall Street Journal
Cryan sells out of China to boost Deutsche Bank capital levels
December 28, 2015--Deutsche Bank is to sell its stake in the Chinese lender
Hua Xia for up to €3.7bn as Germany's biggest bank steps up efforts to strengthen its balance sheet under John Cryan.view more
Source: FT.com
US warns Europe over granting market economy status to China
December 28, 2015--Washington has warned Brussels against granting China 'market economy status', saying the long-sought trade concession could hamper efforts to prevent Chinese
companies flooding US and European markets with unfairly cheap goods.
Source: FT.com
ETFs to play main role in the next crisis
Liquidity fears in indexed products have caused jitters this year
December 28, 2015--The next financial crisis will be played out in indexes and exchange traded funds.
That is inevitable given the huge share that ETFs now take of investor fund flows, and their popularity as hedge fund trading vehicles.
Source: FT.com
World Bank-Year in Review: 2015 in 12 charts
December 24, 2015--Now that we've reached the end of 2015, it's clear this was a year of major milestones, emerging trends, and new beginnings.
Among other things, 2015 marked a historic drop in poverty, a major climate change agreement, and record low child and maternal mortality rates. Take a look at what the data show.
1. The Global Poverty Rate Fell below 10%
2. The World Reached an Accord on Climate Change
3. A Record Number of People Were Forcibly Displaced
Source: World Bank
IMF Working paper-International Sovereign Bonds by Emerging Markets and Developing Economies: Drivers of Issuance and Spreads
December 24, 2015--Summary: What determines the ability of low-income developing countries to issue bonds in international capital and what explains the spreads on these bonds?
This paper examines these questions using a dataset that includes emerging markets and developing economies (EMDEs) that issued sovereign bonds at least once during the period 1995-2013 as well as those that did not. We find that an EMDE is more likely to issue a bond when, in comparison with non-issuing peers, it is larger in economic size, has higher per capita GDP, and has stronger macroeconomic fundamentals and government. Spreads on sovereign bonds are lower for countries with strong external and fiscal positions, as well as robust economic growth and government effectiveness. With regard to global factors, the results show that sovereign bond spreads are reduced in periods of lower market volatility.
Source: IMF
IMF Working paper-How External Factors Affect Domestic Economy: Nowcasting an Emerging Market
December 23, 2015--Summary: External headwinds, together with domestic vulnerabilities, have loomed over the prospects of emerging markets in recent years.
We propose an empirical toolbox to quantify the impact of external macro-financial shocks on domestic economies in parsimonious way. Our model is a Bayesian VAR consisting of two blocks representing home and foreign factors, which is particularly useful for small open economies. By exploiting the mixed-frequency nature of the model, we show how the toolbox can be used for "nowcasting" the output growth. The conditional forecast results illustrate that regular updates of external information, as well as domestic leading indicators, would significantly enhance the accuracy of forecasts. Moreover, the analysis of variance decompositions shows that external shocks are important drivers of the domestic business cycle.
Source: IMF
IMF-March Madness in Wall Street: (What) Does the Market Learn from Stress Tests?
December 23, 2015--Summary: Annual stress tests have become a regular part of the supervisors' toolkit following the global financial crisis. We investigate their capital market implications in the United States by looking at price and trade reactions, information asymmetry and uncertainty indicators, and bank activities.
The evidence we present supports the notion that there is important new information in stress tests, especially at times of financial distress. Moreover, public disclosure seems to help reduce informational asymmetries. Importantly, public disclosure of stress test results (and methodology) does not seem to have reduced private incentives to generate information or to have led to distorted incentives.
Source: IMF
2015 second hottest year on record for Europe
December 23, 2015--The year 2015 will be the second hottest on record in Europe, with mean annual temperatures just above the 2007 average and below the record set in 2014, according to an analysis by one of the World Meteorological Organization's regional climate centres.
Much of eastern Europe was exceptionally warm, with temperatures higher than in 2014. Only in parts of Ireland were temperatures lower than the 1981-2010 long-term average, according to the Climate Indicator Bulletin from WMO's European Regional Climate Centre node on Climate Data operated by the Royal Netherlands Meteorological Institute, KMNI.
Source: World Meteorological Organization
