Global ETF News Older than One Year
Stock-Flow Adjustments and Fiscal Transparency: A Cross-Country Comparison
January 31, 2012--Summary:Over the past three decades, large and persistent discrepancies between the annual change in public debt and the budget deficit, so-called stock-flow adjustments, were a prominent feature of debt dynamics in many economies. The aim of this paper is to investigate the underlying determinants of such discrepancies and their relationship with fiscal transparency using data for 163 countries.
Results show that such discrepancies can only be partly explained by balance sheet effects and the realization of contingent liabilities and that significant differences exist in average stock-flow adjustments across countries reflecting country-specific factors. The more fiscally transparent the country, the smaller these tend to be. The contribution of stock-flow adjustments to increases in debt is likewise smaller in countries with above average fiscal transparency. This may not be coincidental, as a lack of fiscal transparency may make it easier for governments to engage in deceptive fiscal stratagems.
view IMF Working paper-Stock-Flow Adjustments and Fiscal Transparency: A Cross-Country Comparison
Source: IMF
Quarterly Food Prices Decline, but Remain Volatile
Price Index 24 percent higher on average than 2010
January 31, 2012—Global food prices declined 8 percent between September and December of 2011 due to increasing supplies and uncertainty about the global economy, but still remain volatile and high with the 2011 annual index 24 percent higher than its average in 2010, according to the World Bank Group’s latest Food Price Watch.
While the first quarter of 2011 witnessed sharp increases, five consecutive months of decreases at the end of the year drove the World Bank Food Price Index 7 percent below the December 2010 levels, and 14 percent lower than its February peak. Nevertheless, global prices remain high with the 2011 annual index averaging at 210 points against 169 points average in 2010.
Source: World Bank
Global food prices easing, volatility still high: World Bank
January 31, 2012--Global food prices are set to decline further in 2012 as a weaker world economy dampens consumer demand while food supplies rise, the World Bank said on Tuesday, warning that a possible rise in oil prices could reverse the trend.
The World Bank said prices have declined steadily but volatility has increased, including among staples like wheat, maize and rice. In some countries, domestic food prices are higher than levels in 2010, keeping pressure on poor households that spend the bulk of their income on food.
The World Bank increased its monitoring of global food prices in 2009 during a food and energy price crisis that hit food-importing countries the hardest and highlighted the chronic underinvestment in agriculture in developing countries.
Source: Reuters
D. Boerse regulator says has concerns over NYSE deal
January 30, 2012--Deutsche Boerse's home regulator, the Hessian Minister of Economics, said the German exchange operator has failed to address concerns about the proposed takeover of NYSE Euronext , throwing up another hurdle to the deal.
"We made it clear in discussions in November that we have legal reservations about the deal," Dieter Posch told reporters on Monday.
The ministry said concessions offered by Deutsche Boerse had not addressed its concerns. The ministry, based in Wiesbaden, Germany, has the power to revoke Deutsche Boerse's operating licence, a key prerequisite to a successful deal.
Source: SEC.gov
ETFS US Precious Metals Weekly: Gold set for strongest January in more than 30 years as Fed lays QE3 groundwork
January 30, 2012--Gold saw its fourth consecutive weekly rise last week, with YTD
returns matching growth over the whole of 2011 at around 9%. Federal Reserve interest rate projections hinting that official interest rates could remain rock-bottom into 2014 was the chief catalyst, tempting investors out of cash after 2011’s end of year deleveraging. Fed chairman
Ben Bernanke also hinted that if the Fed’s expectations of anaemic
recovery in the US jobs market comes to pass, the Fed will likely look at
ways to ramp-up monetary stimulus.
Negative real interest rates have been a key support factor for gold in recent years (see fig.1 below).
Precious metals positioning and technicals becoming more supportive. Net speculative futures positioning in silver, the hardest hit in the Q4 speculative long position clear-out, saw its fourth consecutive weekly build in net long positions last week, with net speculative futures positions in other precious metals also continuing to rise after hitting their lowest levels in at least 2 years by the end of 2011. Technicals are also becoming more supportive with gold holding above its 200 day moving average and other precious metals also moving back to their 200 day trend lines (see page 4 for details).
South African platinum mine falls, adding support to platinum prices. Anglo American, the world’s largest platinum supplier, announced a 19% drop in Q4 platinum output last week, with safety-related mine stoppages more than doubling in 2011. Labour disputes also remain an issue in 2012, with global platinum producer, Impala Platinum, losing approximately 3,000 oz of production per day relating to stopwork action in a mine in South Africa. The action is forecast to last a fortnight, potentially disrupting around 10% of average monthly platinum mine output in South Africa, provider of more than three-quarters of annual global platinum mine supply.
visit www.etfsecurities.com for more info.
Source: ETF Securities
Gold Price Retreats from 7-Week High
January 29, 2012--Gold ticked lower Monday after earlier rising to its highest in more than seven weeks as investors awaited the outcome of Greece's debt deal talks, but sentiment was supported by a firmer euro and lower-than-expected U.S. growth data.
Spot gold hit a high of $1,739 an ounce, its strongest since Dec. 8, and was at $1,734.65 an ounce by 0022 GMT, down $2.55.
The world's biggest hedge fund, Bridgewater Associates, was bullish on bullion as a hedge against inflation as governments print more money to reduce debt.
Source: IBTtimes
India’s economy grew by 8% in the last financial year
Standard & Poor’s rates India as investment grade BBB- and stable
Negative perceptions about the Indian economy could damage investment
The theme of the 42nd World Economic Forum Annual Meeting is The Great Transformation: Shaping New Models. January 28, 2012--“The macroeconomics of India are fundamentally strong. Those who have these alarm bells ringing should look inwards,” said Anand Sharma, Minister of Commerce and Industry, Textiles of India. Speaking today at the 42nd World Economic Forum Annual Meeting, Sharma vigorously defended the reforms made by his government and the economic prospects of India.
“India can take care of itself, I can assure you,” he said.
When questioned on India’s growing current account deficit, he told participants: “We need to spend to empower and educate our people.”
Supachai Panitchpakdi, Secretary-General of the United Nations Conference on Trade and Development (UNCTAD), echoed Sharma’s optimism. “India is not immune, but it has its own cushion with the size of domestic demand,” he said. He praised India’s open market policies, saying the country has one of the least interventionist exchange rate policies among emerging economies.
India’s investment grade rating of BBB- is more likely to improve than deteriorate, said Douglas L. Peterson, President of Standard & Poor's. He cited India’s strong domestic demand and domestic growth as reasons for optimism. “There are development challenges,” Peterson said, “such as the need in the agricultural sector for modernization.”
Source: World Economic Forum
Little hope for NYSE Euronext-Deutsche Boerse tie-up: report
January 26, 2012--The proposed merger of Deutsche Boerse and NYSE Euronext, which would create the world's largest market operator worth over $17 billion (13 billion euros) is in trouble, a senior executive was reported as saying on Thursday.
NYSE Euronext chief executive Duncan Niederauer told the Financial Times there was only a "glimmer of hope" the deal would be approved by European competition authorities.
The newspaper's website quoted Niederauer as acknowledging he had "misjudged" the approach taken by European Union antitrust authorities to the deal.
Source: EUbusiness
Europe Could Recover Its Dynamism, Says British Prime Minister David Cameron
Resolving the Eurozone crisis is the most urgent question facing Europe
Vital progress has been made, but Europe needs tough fiscal discipline, bold action and real political will
The theme of the 42nd World Economic Forum Annual Meeting is The Great Transformation: Shaping New Models.
January 26, 2012--Despite the uncertainty sweeping across the European Union, British Prime Minister David Cameron was bullish about the prospects for resolving the current Eurozone crisis. “Europe could recover its dynamism. I still believe we can. But only if we are bold. Only if we fight for our prosperity ... [and if we] get to grips with the debt,” he said.
The Prime Minister called for bold decisions on deregulation, on opening up the Single Market, on innovation and trade, and to address the “fundamental issues” at the heart of the Eurozone crisis. “All of these decisions lie in our own hands. They are the test of Europe’s leaders in the months ahead. ... The problems we face are man-made and with bold action and real political will we can fix them,” the Prime Minister urged.
Source: World Economic Forum
Investors see Africa as most attractive destination - EIU poll
January 25, 2012--More than one in two institutional investors see Africa as the most attractive region to invest in the next decade, with one in three expecting to put at least 5 percent of their portfolios into the continent by 2016, a survey showed on Tuesday.
Some 158 institutions including pension funds, hedge funds and private banks polled by the Economist Intelligence Unit EIU.L said Nigeria and Kenya are likely to bring the best investment returns within Africa over the next three years, followed by Zimbabwe, Egypt and Ghana.
Source: Reuters
