Global ETF News Older than One Year
Meeting of Financial Stability Board
October 3, 2011--At its meeting today, the Financial Stability Board (FSB) reviewed and approved a number of
policy proposals to be submitted to the G20 Summit in November, including on a package of measures to address the “too big to fail” problem. Members also discussed the current strains in financial markets arising from sovereign debt and the steps being taken to address them.
Key financial regulatory reforms
Addressing systemically important financial institutions (SIFIs). The FSB reviewed and approved the package of policy measures to be submitted to the G20 to address the “too big
to fail” problems posed by SIFIs, taking account of the results of the public consultation over the summer. The policy package will include:
Key Attributes of Effective Resolution Regimes for Financial Institutions, which will form a new international standard for the features all national regimes should have to enable failing financial institutions to be resolved safely and without exposing the taxpayer to the risk of loss.
A requirement that individual globally important SIFIs (G-SIFIs) have recovery and resolution plans, informed by resolvability assessments, and that home and host authorities develop institution-specific cooperation agreements and cross-border crisis management groups.
Additional loss absorbency requirements for those banks determined to be G-SIFIs, based on the methodology developed by the Basel Committee on Banking Supervision for assessing the global systemic importance of banks.
Measures to enhance the intensity and effectiveness of supervision, in particular of SIFIs. Recommendations will include improved data systems for risk management at SIFIs and assessments of the adequacy of supervisory resources
Source: Financial Stability Board (FSB)
ETFS Precious Metals Weekly: Massive clear-out of net long positions in precious metals sets base for potential future price rises
October 3, 2011--Precious metal net speculative futures positions hit their lowest level in over 2 years last week. The position clear-out in gold, silver and palladium could potentially set the stage for short-covering rallies and provide base support for any price gains ahead. Net speculative positions in silver were cut back at the fastsest
pace in almost half a decade last week.
Gold, silver prices start the week higher as financial de-leveraging slows. More optimism surrounding the possibility for more concrete action from European monetary authorities soothed markets slightly last week as Germany moved to ratify the expansion of the European bailout fund late last week. Nonethless, the admission from Greece that it will miss previous EU budget deficit targets as part of its latest bailout-linked austerity package highlights that the debt situation remains precarious.
Platinum trading at the largest discount to gold on record*.The abrupt retreat of market risk appetite saw the platinum price drop 15% below its 200 day moving average last week and left the platinum:gold spot price ratio lower than its post-Lehman’s crisis trough in December 2008. The price ratio is currently trading at almost half its long run (10 year) average.
Average daily turnover in Shanghai Gold Exchange (SGE) double its 1 year average as prices drop to their lowest level in two and a half months. This continues the pattern of rising turnover on price drops seen over recent months. It will be of interest to see how Asia demand holds up over the Chinese holiday season October 1-3. GFMS note that purchases of physical gold in India, the worlds largest gold consumer, have seen less pronounced seasonal ebbs than usual over recent years, suggesting that gold purchases are becoming more evenly distributed throughout the year as direct gold investors play a larger role.
Sovereign creditworthiness questions broaden within the OECD as New Zealand stripped of its AAA status. As the European debt crisis drags on, debt anxieties appear to be broadening as the turmoil tests investor appetite for sovereign debt, with New Zealand stripped of its AAA status last week by S&P and Fitch. The country’s relative dependency on overseas debt, despite its close affiliation with China-led commodities demand, was singled out as a key vulnerability.
What to watch this week. This week marks key monetary policy announcements and speeches in the US, Europe and Japan. Any hints at expanded quantitative easing by monetary authorities could prove supportive to gold prices. This week also sees a plethora of manufacturing data in the US and Europe, and key US employment data at the end of the week. Stronger data could prove supportive to more cyclically-oriented silver, platinum and palladium prices this week, especially in light of exceptionally large price drops and net long speculative futures positioning declines last week.
visit www.etfsecurities.com for more info
Source: ETF Securities
SGX, LSE tying up for London Metal Exchange bid
September 30 2011--LME makes up 80% of traded volume in global metal futures trades
LME's major shareholders include Goldman Sachs and JPMorgan
More than 9 suitors have shown interest in LME - CEO
SGX and LSE decline to comment
The Singapore Exchange Ltd is tying up with London's main bourse to make a joint bid for the London Metal Exchange, a source told Reuters on Friday, as the world's largest metal market seeks a suitor in a deal that could be worth 1 billion pounds ($1.57 billion).
The consortium has appointed a bank to advise it on the bid, said the source, who had direct knowledge of the deal, with the auction expected to attract rival offers.
Source: The Guardian
Hedging fuels commodities and credit volatility
September 30, 2011--Investors have been preparing for the worst in recent weeks, scrambling to hedge themselves against an array of worrying risks – and in the process driving a spike in volatility in currencies, credit and commodities to match what has been seen in equities.
Equity volatility, as measured by the CBOE Volatility index, or VIX, surged by 160 per cent in the third quarter, the biggest quarterly jump in at least two decades. It has now remained above 30, about twice its historical average, for the longest period since early 2009.
Source: FT.com
Emerging markets bond funds lose $3.2 bn; banks cite EPFR data
September 30, 2011--Outflows from emerging debt funds accelerated sharply to $3.2 billion over the past week as investor flight out of riskier assets gathered pace, while US debt and money funds gained, banks said on Friday, citing data from EPFR Global.
Money market funds took in $8.8 billion in the week to September 28 while US fixed income absorbed $11.4 billion, the data released to clients late on Thursday by Boston-based EPFR showed.
Source: The Economic Times
First offers for AXA's unit seen next week -sources
Insurer had said was exploring sale of private equity arm
AXA denies report it will meet with French authorities
France will fight to stop sale to U.S. rival -banker
KKR and BlackRock invited to submit offers -FT (Updates with partial confirmation, denial on planned meeting)
September 30, 2011--Potential bidders for the private equity unit of French insurer AXA have been asked to submit first offers early next week,
sources close to the situation said on Friday.
Axa said on Wednesday it was exploring the possible sale of its private equity unit.
Source: Reuters
TABB releases report on OTC clearing technology
September 29, 2011--Huge demands for technology upgrades as global regulators focus on the clearing
of OTC derivatives.
TABB Group has released a report on the challenges caused by OTC derivatives
reforms which, according to TABB principal Kevin McPartland, "are causing
headaches all over Wall Street, the City and beyond".
According to the report "OTC Derivatives Clearing Technology: Bringing the Back Office to the Forefront", regulators' focus on the clearing of OTC derivatives has started a technology revolution. There is a need for major upgrades and investments in clearing technology to cope with an estimated twentyfold increase in transaction volumes and demands for lower processing latencies within clearing. There will also be increased complexities in margin requirement calculations, and finding offsets within portfolios to reduce margin requirements, straining systems further.
The study looks at the impacts that new regulation will have on clearing technology for sell-side firms and clearing houses, the cost of implementing the technology for real-time clearing and intra-day margin calls, and presents a view of the new clearing workflow.
"This report captures highly relevant and urgent issues that the clearing industry faces today," comments Nils-Robert Persson, Executive Chairman of Cinnober. "Pressure from regulators and market participants has made it clear that the current post-trade infrastructure doesn't cope with many of the challenges that we're facing today, in terms of calculation complexity, speed and transaction volumes."
"We've been involved in sophisticated clearing solutions for over a decade, but increased our focus three years ago as it became evident after the Lehman crash that not having real-time control of positions and risks should be against the instinct for self-preservation of any participant in our markets," Persson continues. "The key characteristics of our offering in this area are flexibility and scalability that enable true real-time clearing and risk management over multiple asset classes. Technology is an enabler and must never become a bottleneck in the development of efficient and secure services".
"Real-time clearing of a broad range of OTC products will happen," McPartland says, "since market participants and regulators demand it and innovative technologists will guarantee it. These improvements will come in phases, paralleling regulatory rollout and growth in clearing volumes. The first phases are underway and clearinghouses and dealers understand the winners will be those who can consume and disseminate data elements critical to trading, clearing and reporting in the least amount of time. But technology is the key catalyst behind the elimination of existing inefficiencies, reduction of expensive manual resources and lowering of operational risk."
The report is based on interviews with clearinghouses, swap dealers, technology providers and buy-side clearing specialists. Authors are TABB's Kevin McPartland, director of fixed income research and senior contributing analyst Finn Christensen.
To get a copy of the released report, please e-mail otc-clearing@cinnober.com.
Source: TABB
IPOs Shelved at Record Pace as Offer Pipeline Balloons
September 29, 2011--Companies canceled or postponed $8.9 billion in initial public offerings in the third quarter as stocks plunged, putting the market on pace to set a record for pulled deals.
The value of withdrawn and delayed IPOs so far this year rose to $34 billion, approaching the $40 billion pulled in 2010, the most since Bloomberg began compiling data. Siemens AG (SIE) suspended an IPO of its Osram lighting unit, while U.S. defense equipment maker ADS Tactical Inc. and Shanghai-based Xiao Nan Guo Restaurants Holdings Ltd. abandoned offerings.
Source: Bloomberg
SocGen's Newedge futures unit for sale - source
September 28, 2011--Societe Generale has put up for sale its stake in Newedge, a futures and clearing brokerage it co-owns with Credit Agricole, a source familiar with the situation said on Tuesday, as the No. 2 French bank looks to shrink its balance sheet and sell risky assets.
"Newedge is definitely for sale," the source said, adding that the bank could also sell its custody and securities unit SGSS but no firm decision had been reached on that.
"Both of these are fairly difficult to sell," the source said, adding: "I wouldn't hold my breath" on a successful sale.
Societe Generale, whose shares soared 17 percent on Tuesday as part of a broader rally in European banking stocks, declined comment.
Source: Reuters
Dark pools lose out to exchanges
September 27, 2011--The private stock trading venues owned by banks and brokerages known as "dark pools" suffered a sharp decline in market share in the US in August, reversing a rapid ascent over the past three years, according to new figures.
The share of all US equity trading taking place in the 18 dark pools tracked by Rosenblatt Securities fell by more than a percentage point in August, from 12.51 per cent in July to 11.26 per cent last month.
Source: FT.com
