Global ETF News Older than One Year
ESMA and the Japanese FSA establish cooperation framework for credit rating agencies
June 6, 2011--On 1 June 2011, the European Securities Markets and Authority (ESMA) and the Financial Services Agency of Japan (FSA), exchanged letters (known as “Exchange of Letters” (EOL)) regarding supervision and information sharing of credit rating agencies (CRAs).
The purpose of this EOL is notably to establish a mechanism for cooperation on cross border CRAs. This will create conditions for the exchange of information between authorities and the procedures concerning the coordination of supervisory activities.
Source: ESMA
ETFS Precious Metals Weekly: Gold and Silver Prices Diverge on Rising Sovereign Risk and Global Growth Concerns
June 6, 2011--Gold price rises through $1550/oz level driven by Greek sovereign risk and global growth concerns. Ratings agency Moody’s Investor Services last week said
that there is ‘at least an even chance of default over the rating horizon’ for Greece. Rising concerns about possible Greek default together with weak global growth data drove investors into the perceived safety of gold.
Silver price drops 7% as global industrial activity slows sharply. Poor manufacturing data in the US and the Eurozone and disappointing US nonfarm payrolls weighed on the silver price last week, highlighting the metal’s relatively high sensitivity to the global growth cycle.
Platinum and palladium prices soften on slump in US auto sales. Platinum group metals prices gave back early gains last week as weaker than expected US auto sales raised demand concerns.
Gold price rises through $1550/oz as Greek credit rating downgrade causes investors to move into perceived safe havens. Moody’s investor Services cut Greece’s credit rating again last week, highlighting their view of a 50% chance of a default over the ratings period. The market is now focusing increasingly on ‘when and how’ a restructuring will occur rather than ‘if’ it will take place. Concerns about European sovereign risk together clear signs of softening global growth have caused investors to shun cyclical and risk assets and move into perceived safe havens. Gold has been a key beneficiary of this trend.
visit www.etfsecurities.com for more info.
Source: ETFS Securities
Business Cycles in Emerging Markets: The Role of Durable Goods and Financial Frictions -IMF Working paper
June 6, 2011-- This paper examines how durable goods and financial frictions shape the business cycle of a small open economy subject to shocks to trend and transitory shocks. In the data, nondurable consumption is not as volatile as income for both developed and emerging market economies.
The simulation of the model implies that shocks to trend play a less important role than previously documented. Financial frictions improve the ability of the model to match some key business cycle properties of emerging economies. A countercyclical borrowing premium interacts with the nature of durable goods delivering highly volatile consumption and very countercyclical net exports.
Source: IMF
US regulator attacks queue jumping by traders
JUne 6, 2011--Ultrafast traders are winning preferential access to deals because computers used by exchanges are programmed to accept bigger orders first when matching prices, says a top US regulator.
Bart Chilton, a commissioner at the Commodity Futures Trading Commission, will on Wednesday voice concern from some traders over what he says is the use of “allocation algorithms” that may be used at some exchanges.
Source: FT.com
Gold rises to highest level in a month
June 6, 2011--The price of gold rose to its highest level in a month as investors fretted about the outlook for growth in the US and Europe.
The precious metal, a traditional haven against economic turmoil, rose 0.8 per cent on Monday to a peak of $1,553.30 a troy ounce – the highest since early May.
Source: FT.com
Risky Bank Lending and Optimal Capital Adequacy Regulation
June 6, 2011--We study the welfare properties of a New Keynesian monetary economy with an essential role for risky bank lending. Banks lend funds deposited by households to a financial accelerator sector, and face penalties for maintaining insufficient net worth.
The loan contract specifies an unconditional lending rate, which implies that banks can make loan losses. Their main response is to raise lending rates to rebuild net worth. Prudential rules that adjust minimum capital adequacy requirements in response to loan losses significantly increase welfare. But the gains from eliminating limited liability and moral hazard would be an order of magnitude larger.
view the IMF Working paper-Risky Bank Lending and Optimal Capital Adequacy Regulation
Source: IMF
Component Changes Made To Dow Jones Sector Titans And Dow Jones Emerging Markets Sector Titans Indexes - Changes Are the Result of the Regular Annual Review
June 3, 2011--Dow Jones Indexes today announced the results of the regular annual review of the Dow Jones Emerging Markets Sector Titans indexes. The changes will be effective after the close of trading on Friday, June 18, 2010.
Source: Dow Jones Indexes
Dow Jones Indexes Announces Component Changes In Global, Regional And Country Titans Blue-Chip Indexes And Dow Jones Select Dividend Indexes - Changes Are The Result Of The Regular Annual Review
June 3, 2011--Dow Jones Indexes, a leading global index provider, today announced the results of the regular annual review of the Dow Jones Global Titans 50, Dow Jones Regional Titans, Dow Jones Country Titans and Dow Jones Select Dividend Indexes. Changes being announced today will be effective after the close of trading on Friday, June 17, 2011.
In the Dow Jones Global Titans 50 Index, Goldman Sachs Group Inc. (United States, Financial Services, GS) will be replaced by Citigroup Inc. (United States, Banks. C). The total free-float market capitalization of the reconstituted Dow Jones Global Titans 50 Index increased to US$6.779 trillion from US$6.727 trillion. Regional allocation of the Dow Jones Global Titans 50 Index, based on country of origin of the component stock: Americas before review 62.36%; after review 61.87%; Europe before review 31.09%, after review 31.80% and Asia/Pacific before review 6.57%; after review 6.33%. The Dow Jones Global Titans 50 Index is a 50-stock index that reflects the market performance of the world’s leading multinational companies.
In the Dow Jones Asian Titans 50 Index, the following three companies will be added: Hitachi Ltd. (Japan, Industrial Goods & Services, 6501.TO), Softbank Corp. (Japan, Telecommunications, 9984.TO) and Wesfarmers Ltd. (Australia, Retail, WES.AU). Companies exiting are: JFE Holdings Inc. (Japan, Basic Resources, 5411.TO), Tokyo Electric Power Co. Inc. (Japan, Utilities, 9501.TO) and QBE Insurance Group Ltd. (Australia, Insurance, QBE.AU). The total free-float market capitalization of the reconstituted Dow Jones Asian Titans 50 Index increased to US$2.067 trillion from US$2.012 trillion. The Dow Jones Asian Titans 50 Index is a 50-stock index that reflects the market performance of the leading companies in 11 countries in the Asia/Pacific region.
Source: Mondovisione
OPEC considers hike in oil output target
June 2, 2011--OPEC is considering raising its target for crude oil supply by as much as 1.5 million barrels per day (bpd), a delegate to next week's meeting of the group told Reuters on Thursday.
The Organization of the Petroleum Exporting Countries, which pumps more than a third of the world's oil, is due to meet in Vienna on June 8 to discuss output and its response to a sharp rise in oil prices that could be a drag on economic growth.
Source: FT.com
Wheat price rises as weather fears return
June 2, 2011--Wheat prices rose on Thursday for the first time since Russia announced it would lift its export ban, as traders concluded the move was unlikely to resolve any shortfall created by growing problems elsewhere.
Prices had dropped up to 7 per cent since Saturday’s announcement that the ban would be lifted from the start of July. But traders and analysts said that poor weather across some of the most important tracts of wheat-growing land had returned to the fore, overshadowing the impact of the Russian decision.
Source: FT.com
