Global ETF News Older than One Year
New report analyses trade and development impact of global value chains
July 17, 2012--Economic globalization has been promoting economic convergence and integration, states the report.
In order to benefit from these trends, countries need to grasp the nettle of trade policy reforms at three levels: unilateral, multilateral, and through preferential trade agreements. The temptation to return to protectionism in response to the economic crisis would have serious consequences for the global economy, particularly the most trade-dependent developing states, highlighting the critical role of the WTO in levelling the playing field.
Source: World Economic Forum
HSBC Exec Resigns as Senators Hammer Money-laundering Lapses
July 17, 2012--HSBC Holdings Plc put itself at the mercy of the U.S. Senate on Tuesday, acknowledging shortcomings in its anti-money laundering operations and revealing the resignation of a global executive.
David Bagley, a top compliance executive at HSBC since 2002, told a Senate investigative panel that he would step down, after the panel released a scathing report calling out a "pervasively polluted" culture at the bank.
Source: NewsMax
Mirae BRICs Weekly-Markets Call on Countries to Modify Stimulus Program
July 17, 2012--China
GDP growth hits a three-year low of 7.6%YoY.
Last week, the Hang Seng Index fell throughout the week while the China bourses recovered some of its losses towards the end of the week amid positive news including improving liquidity and growth results that were in line with expectations.
China’s GDP growth rose 7.6% year-on-year in the second quarter of 2012. Despite being a three-year low, it matched with the Bloomberg analyst median estimate of 7.7%.
India
Rate cut expected in India.
Indian stock markets stayed flat last week. May industrial production went up 2.4%, while June exports fell 5.5% on a year-on-year basis.
On a sub-sector level, mining trends remained stable, manufacturing rose 2.5% and electricity recorded 5.6% which was in line with trends. Capital goods plunged 7.7%, while consumer sales recorded decent growth.
Brazil
Mixed signals from markets.
Brazilian industrial production decreased by 0.9% month-on-month in May while June’s Brazilian CPI (IPCA) posted an increase of 0.08% MoM, which was below market consensus.
Brazilian equities remain out of favour as the Q2 earnings season begins. Consensus points towards weak or negative earnings growth for sectors such as energy and financials, though recent share price action has largely priced this in.
Russia
Russia’s economy resilient despite global economic slowdown.
Within emerging markets, Russia outperformed, gaining 9.2% despite a fall in the oil price, as commodities more broadly rebounded.
Source: Mirae Asset Management
Global Investment Management Industry Continues To Face A Regulatory Avalanche Of Disparate Rules: KPMG Report
Progress is Slow, But Moving toward More Consistent Rules across Every Region
July 17, 2012--In its fourth annual analysis of global financial regulations, KPMG, the audit. tax and advisory firm. says investment managers continue to face daunting challenges brought on by a changing global regulatory environment, which is fraught with unanswered questions and an array of differing rules in each region.
Observers, however, are beginning to see some consistency regarding the implementation of new regulations across the globe, with the U.S. and Europe setting the bar and Asia catching up.
"We are beginning to see progress toward more consistency with regard to global regulations but there still remains disparity in the regulatory requirements across the regions," said John Schneider, head of KPMG's Investment Management Regulatory practice in the U.S. and a co-author of the report.
"The goal is to reach a global connectiveness and consistency as to how regulations unfold, which is critical if we are to make sure the competitive landscape is not significantly altered," Schneider added.
read more view the KPMG Report-Evolving Investment Management Regulation-A clear path ahead?
Source: KPMG
ETF providers: Big is still beautiful
More than 15 years later, his catchphrase still applies to exchange-traded funds, which State Street helped pioneer in the 1990s. ETFs are popular and economies of scale seem to be a big part of success when it comes to selling the products.
Source: Financial News
ETFS Precious Metals Weekly: Precious Metals Investors Await Bernanke's Congressional Testimony
With interest rates near zero, it would appear that “unconventional” monetary policy is the likely next step. As such, Bernanke’s upcoming Congressional testimony on the US economy on Tuesday and Wednesday has the potential to signal what the market hoped for from the last FOMC meeting. With gold one of the perceived few hedges against further US dollar debasement, any hints of a potential third round of quantitative easing will likely be bullish the gold
price. Silver prices will likely follow gold’s lead in coming weeks, with the
correlation between the two precious metals the highest in six weeks.
Gold and US Dollar correlation at highest level in 4 months. US dollar
strength continues to hamper the performance of precious metals, gold in
particular, with the negative correlation between the two assets standing at -0.5, the highest level in 4 months. When gold is moving inversely to the US dollar, it naturally trades in a less reactive manner to systemic risk in Europe. Politicians were predictably silent on details of the proposed European bailout structures after last week’s European finance ministers meeting, giving little in the way of directional cues for gold. The effect of US dollar strength on the gold price can clearly be seen looking at gold in US dollars compared to gold priced in Euros (see chart below).
Mining union unrest highlights supply problems for PGMs. The
Association of Mineworkers and Construction Union (AMCU) has called on
South African miner, Aquarius Platinum, to re-open its closed Everest mine
and is threatening to take legal action. Aquarius, the world’s fourth largest platinum producer, closed its Everest mine in June citing margin
compression. The latest union action highlights the growing supply side
constraints affecting PGM producers. With these issues likely to persist as
unions battle for membership, supply side concerns are likely to help
support platinum and palladium prices. visit www.etfsecurities.com for more info
Source: ETF Securities
IMF-Fiscal Monitor Update-Nurturing Credibility While Managing Risks to Growth
Overall, advanced economy deficits are forecast to decline by about ¾ percentage point of GDP this year and about 1 percent of GDP next year in both headline and cyclically adjusted terms, a rate that strikes a compromise between restoring fiscal sustainability and supporting growth. However, continued focus on nominal deficit targets runs the risk of compelling excessive fiscal tightening if growth weakens. In addition, there is a risk in the United States of political gridlock that puts fiscal policy on autopilot and results in a sharp and sudden decline in deficits—the “fiscal cliff.” In most advanced economies, a steady pace of adjustment focused on the measures to be implemented rather than on headline deficit targets is preferable, especially in light of heightened downside risks to the outlook. In most emerging economies, headline and cyclically adjusted deficits are projected to remain broadly unchanged over 2012–13, which is appropriate given these countries’ generally stronger fiscal positions and the downside risks to the global economy. However, some emerging economies need to be more ambitious to reduce vulnerabilities.
Underlying fiscal adjustment on track
Source: IMF
Global Financial Stability Report-GFSR Market Update-Intense Financial Risks: Time for Action
Aside from supportive monetary and liquidity policies, the timely implementation of the recently agreed measures, together with further progress on banking and fiscal unions, must be a priority. Uncertainties about the asset quality of banks’ balance sheets must be resolved quickly, with capital injections and restructurings where needed. Growth prospects in other advanced countries and emerging markets have also weakened, leaving them less able to deal with spillovers from the euro area crisis or to address their own home-grown fiscal and financial vulnerabilities. Uncertainties on the fiscal outlook and federal debt ceiling in the United States present a latent risk to financial stability.
Market rally interrupted by renewed sovereign funding pressures.
Source: IMF
IMF-World Economic Outlook Update-New Setbacks, Further Policy Action Needed
Growth in a number of major emerging market economies has been lower than forecast. Partly because of a somewhat better-than-expected first quarter, the revised baseline projections in this WEO Update suggest that these developments will only result in a minor setback to the global outlook, with global growth at 3.5 percent in 2012 and 3.9 percent in 2013, marginally lower than in the April 2012 World Economic Outlook.
Source: IMF
Providers work hard to crack DC market
European defined-contribution plans, however, are so far not showing any interest, with cost remaining a significant barrier.
Earlier this year, the market was abuzz with rumours that technology company Apple’s 401(k) retirement scheme, a DC plan, had invested solely in ETFs. The speculation turned out to be untrue, according to sources close to the scheme, but the flurry of excitement it elicited shows that institutional interest in ETFs is growing rapidly.
Source: Financial News
July 16, 2012--In 1996, Nicholas Lopardo, the former head of State Street Global Advisors, explained his firm's success in index-tracking products simply as "passive is massive".
July 16, 2012--Gold holds above 50-dma as investors look for hints of quantitative
easing in Bernanke's upcoming congressional testimony.
Gold
remains above its key 50 day-moving-average, but is trading tentatively
ahead of key policy meetings. The release of the June FOMC minutes last
week was underwhelming in terms of a clear QE signal, disappointing gold
bulls. However, the door was clearly left open, with FOMC members
highlighting that if US economic activity deteriorates further they are
'prepared to take further action as appropriate'.
July 16, 2012--Fiscal adjustment is proceeding generally as expected in advanced economies, with headline and underlying fiscal deficits that are broadly in line with projections in the April 2012 Fiscal Monitor.
July 16, 2012--Risks to financial stability have increased since the April 2012 Global Financial Stability Report (GFSR). Sovereign yields in southern Europe have risen sharply amid further erosion of the investor base. Elevated funding and market pressures pose risks of further cuts in peripheral euro area credit. The measures agreed at the recent European Union (EU) leaders' summit provide significant steps to address the immediate crisis.
July 16, 2012--In the past three months, the global recovery, which was not strong to start with, has shown signs of further weakness. Financial market and sovereign stress in the euro area periphery have ratcheted up, close to end-2011 levels.
July 16, 2012--US pension schemes, which are normally slow to embrace new investment products,are starting to show growing enthusiasm for exchange-traded products.
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