Global ETF News Older than One Year
Determinants of Interest Rate Pass-Through: Do Macroeconomic Conditions and Financial Market Structure Matter?- IMF Working paper
July 27, 2011--Summary: Numerous empirical studies have found that the strength of the interest rate pass-through varies markedly across countries and markets. The causes of such heterogeneity have attracted considerably less attention so far. Unlike other studies that mainly focus on small groups of mostly developed and emerging markets in the same region, this paper expands the cross-sectional coverage to 70 countries from all regions, including low income, emerging and developed countries.
It uses a wide range of macroeconomic and financial market structure variables to uncover structural determinants of pass-through. The paper finds that per capita GDP and inflation have positive effects on pass-through, while market volatility has a negative effect. Among financial market variables exchange rate flexibility, credit quality, overhead costs, and banking competition were found to strengthen pass-through, whereas excess banking liquidity to impede it.
Source: IMF
Global Trends in Renewable Energy Investment 2011
July 27, 2011--Investments in renewable energies, from wind and solar power to geothermal and waste-into-energy, continued their remarkable growth in 2010.
A combination of stimulus package funds making their way into the market, the introduction of smart policies
like feed-in tariffs and target-setting sparked a record $211 billion of investment in renewable energy.
The more-than-$48 billion new investment in China merits attention in terms of scale and growth. Other highlights of this year’s report are rising investments across other parts of the developing world, and the sharp increase in investment in small-scale renewables in countries such as Germany and Italy, where predominantly rooftop solar projects surged to $60 billion-worth of investment, up over 90from 2009.
Excluding Brazil, Mexico took the lead in Latin America where investments, mainly in wind but also in geothermal, grew close to 350%, triggered in large part by a government decision to raise renewable energy capacity from 3.3% to over 7.5% by 2012.
Argentina, with a target of 8% of its energy to be sourced from renewables by 2016, saw investment grow nearly seven-fold to $740 million. 2010 also saw important investment in Chile, Peru and Venezuela.
Source: United Nations Environment Programme and Bloomberg New Energy Finance
DEALTALK-Nasdaq sticking to basics as M&A speculation hangs
July 26, 2011--Exchange operator reports Q2 earnings Wednesday
Likely to temper LSE deal buzz, stress share buybacks
Price, weak P/E ratio sticking points to any buyout
Nasdaq OMX Group (NDAQ.O), the exchange often seen as most likely to re-stoke the industry's global merger frenzy, will instead probably focus on business basics for now.
The trans-Atlantic market operator has privately played down the possibility of a deal with London Stock Exchange Group Plc (LSE.L) in recent weeks, according to an investor who held talks with management and to a published analyst note.
Source: Reuters
Barclays Capital Expands OffshoreRenminbi (CNH) Trading Services
July 26, 2011-- Barclays Capital announced today the expansion of foreign exchange services for its offshore Renminbi (CNH) product offering. The expansion offers local trading during London and New York trading hours as well as Asian hours. In addition, CNH FX options have now been added to the product suite alongside deliverable spot, forwards and swaps
Clients may take advantage of the expanded service to trade CNH against G10 and Asian local currencies via traditional voice methods and online with BARX, the firm’s award-winning electronic trading platform. The expanded trading hours provides clients in London and New York the ability to trade CNH with the same speed, precise pricing and level of service currently enjoyed by clients in Asia. The firm’s CNH offering is now on par with other currencies available to Barclays Capital clients.
“Barclays Capital’s commitment to the CNH market will benefit our clients and help expand the overall market. Our clients will enjoy better liquidity and execution, where and when they want it.” said Mike Hill, Head of FX & EM Rates Distribution, Asia Pacific.
Source: Barclays
The Impact of the Global Financial Crisis on Microfinance and Policy Implications
July 26, 2011--Summary: The global financial crisis affected microfinance institutions (MFIs) as lending growth was constrained by scarcer borrowing opportunities, while the economic slowdown negatively impacted asset quality and profitability. It also brought to the fore the relatively high interest rates that MFIs charge to their (low-income) customers.
This paper revisits the issue of systemic risk of MFIs, and finds that contrary to the evidence before the crisis, MFI performance is correlated not only to domestic economic conditions but also to changes in international capital markets. It also presents an empirical analysis of lending rates with the purpose of informing policy decisions, and finds that loan sizes, productivity, and MFI age contribute to explain differences in lending rate levels. This suggest that regulation (and policies) promoting MFI competition, and innovation in lending technologies have a better chance to result in decreased lending rates.
Source: IMF
New EDHEC-Risk Position Paper Confirms No Consensus Exists on Link between Speculation and Price Volatility
July 26, 2011--In a new EDHEC-Risk Institute position paper, “A Review of the G20 Meeting on Agriculture: Addressing Price Volatility in the Food Markets,” Hilary Till, Research Associate with EDHEC-Risk Institute, and Principal of Premia Capital Management, examines food price volatility in the context of the G20 meeting of agriculture ministers.
In reviewing the evidence so far regarding the impact of commodity trading, speculation, and index investment on price volatility, the report finds that the evidence for the prosecution does not seem particularly compelling at this point. The paper’s conclusion is to agree with the World Bank president who has said that the answer to food price volatility is not to prosecute or block markets, but to use them better. In the author’s view, one sensible use of financial engineering is for hedging volatile food price risk with appropriate commodity derivatives contracts.
The position paper reveals that French President Nicolas Sarkozy’s view that “the financialisation of agriculture markets… is a contributory factor in price volatility…” is contradicted by Dr. Pierre Jacquet, Chief Economist of the Agence Française de Développement, who notes that a number of market-based solutions could potentially help developing countries better manage commodity price volatility, including increasing access to risk-hedging instruments.
Source: EDHEC
Soros to close Quantum fund to outsiders
July 26, 2011--George Soros, the billionaire hedge fund manager, is closing his Quantum fund to outside investors and returning their money.
Quantum, which will continue to manage about $24.5bn of Soros family money, blamed the decision on new financial regulations requiring hedge funds to register with the Securities and Exchange Commission.
Source: FT.com
July 2011 “Market’s Measure” - Preliminary Report - A Monthly Report From Dow Jones Indexes On The Performance Of U.S., European, Asia And Other Global Stock Market Indexes
July 26, 2011--Dow Jones Industrial Average Posts 1.44% Gain in July, European Stocks Lose 1.68%, Asia Rises 0.95% and World Equities Rise by 2.19%
Oil & Gas Sector Posts Biggest Gain for July in U.S.
Financials Sector Takes the Hardest Hit for July in Europe
As of July 25, the Dow Jones Industrial Average rose 1.44% in July, closing at 12592.80. Stock market indexes in Europe fell while Asia and globally indexes were up in July, according to preliminary monthly figures from global index provider, Dow Jones Indexes.
The Dow Jones Industrial Average rose 1.44% in July, closing at 12592.80. Year-to-date, the index is up 8.77%.
The Dow Jones Europe Titans 80 Index is down 1.68% for July, closing at 1592.07. Year-to-date, the index is up 5.26%.
The Dow Jones Eurozone Titans 80 Index fell 4.31% for July, closing at 1586.02
Year-to-date, the index is up 5.28%. The Dow Jones Asian Titans 50 Index rose 0.95% in July to 139.36. So far this year, the index is down 4.35%. The Dow Jones Global Titans 50 Index rose 2.19% in July, closing at 187.62. Year-to-date, the index is up 5.94%.
Source: Mondovisione
New Emerging Market Strategies Target Volatility, Limit Downside
Offerings aim for growth while easing investors' concerns
July 25, 2011--
Some money managers are rolling out strategies designed to reduce volatility and provide downside protection in emerging markets as a way to appease skittish investors still wanting to capture superior growth.
Whether there's much of a market for these strategies remains to be seen
Source: Pensions & Investments
Analytics of Systemic Crises and the Role of Global Financial Safety Nets -IMF Working paper
July 25, 2011-Summary:
In response to the global crisis, the Fund overhauled its lending toolkit and boosted its resources, strengthening its ability to pre-empt financial crises.
This paper—with the companion paper on Mapping Cross-Border Financial Linkages—takes another look at the recent global crisis in the context of a broader review of past systemic crises to (i) assess whether rising linkages across countries is a source of latent systemic instability and (ii) ascertain whether the global financial safety net (GFSN) is adequate to contain crisis and contagion risks arising from such systemic instability. This paper develops a new methodology to identify systemic crises and reviews associated policy responses from a global, rather than country-level, perspective
view the Analytics of Systemic Crises and the Role of Global Financial Safety Nets paper
Source: IMF
