Global ETF News Older than One Year
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
London Stock Exchange Group plc publication of circular and prospectus
June 1, 2011--On 9 February 2011 London Stock Exchange Group plc (“LSEG”, “LSEG Group” or the “Company”) and TMX Group Inc. (“TMX” or “TMX Group”) announced a proposed recommended merger (the “Merger”) to create a new international exchange leader (the “Merged Group”).
Today, the Board of LSEG announces that LSEG’s shareholder circular (the "LSEG Circular") and prospectus (the “Prospectus”) relating to the Merger have been approved by the UK Listing Authority ("UKLA"), published and will be posted to LSEG shareholders as appropriate. In addition, TMX has received approval from the Ontario Court for its shareholder circular, copies of which will also be publicly filed in Canada today and are in the process of being posted to its shareholders.
The LSEG Circular contains a notice convening a general meeting of LSEG’s shareholders to be held at London Stock Exchange, 10 Paternoster Square, London EC4M 7LS at 3:00pm on 30 June 2011 (the "General Meeting") at which approval will be sought for the Merger. A timetable is set out below.
Transaction Rationale
The Boards of LSEG and TMX Group believe that the Merger offers compelling financial, strategic and operational benefits for shareholders, the full breadth of market participants, listed companies of all sizes, investors and other stakeholders.
Source: London Stock Exchange
A New Action-based Dataset of Fiscal Consolidation -IMF Working paper
June 1, 2011--This paper presents a new dataset of fiscal consolidation for 17 OECD economies during 1978-2009. We focus on discretionary changes in taxes and government spending primarily motivated by a desire to reduce the budget deficit and not by a response to prospective economic conditions.
To identify the motivation and budgetary impact of the fiscal policy changes, we examine contemporaneous policy documents, including Budgets, Budget Speeches, central bank reports, Convergence and Stability Programs submitted by the authorities to the European Commission, and IMF and OECD reports. The resulting series can be used to estimate the macroeconomic effects of fiscal consolidation.
view IMF Working paper-A New Action-based Dataset of Fiscal Consolidation
Source: IMF
Deutsche Börse and NYSE Euronext highlight benefits of strategic combination at Investor Day in Germany
June 1, 2011--Deutsche Börse and NYSE Euronext today reiterated the benefits of the planned business combination for all capital market participants. In a joint presentation at the German “Investor Day” both companies highlighted the compelling value of the strategic combination.
“The business combination between Deutsche Börse and NYSE Euronext will bring immediate and concrete financial benefits and attractive growth prospects for shareholders of both companies”, said Reto Francioni, CEO of Deutsche Börse AG to institutional investors and financial analysts in Eschborn. “The merger fits perfectly into our strategy as it utilizes our derivatives, risk management and post trade expertise and creates additional growth opportunities.”
Duncan Niederauer, CEO of NYSE Euronext, added: “The new exchange organization will be able to offer its customers global reach, innovative products, operational efficiency, improved capital efficiency, and an expanded range of technology and market information solutions. The superior cash flow generation and a strong balance sheet allow us to maintain our shareholder-friendly distribution policy, while also having the necessary resources to invest in future growth.”
Source: Deutsche Börse
Information Rigidity in Growth Forecasts: Some Cross-Country Evidence -IMF Working paper
June 1, 2011--We document information rigidity in forecasts for real GDP growth in 46 countries over the past two decades. We investigate: (i) if rigidities are lower around turning points in the economy, such as in times of recessions and crises;
(ii) if rigidities differ across countries, particularly between advanced countries and emerging markets; and (iii) how quickly forecasters incorporate news about growth in other countries into their growth forecasts, with a focus on how advanced countries‘ growth forecasts incorporate news about emerging market growth and vice versa.
view the IMF Working paper-Information Rigidity in Growth Forecasts: Some Cross-Country Evidence
Source: IMF
GDP growth – First quarter of 2011 OECD growth steady at 0.5 per cent in the first quarter of 2011 but diverging trends across major economies
June 1, 2011--Gross domestic product (GDP) in the OECD area continued to grow at a rate of 0.5% in the first quarter of 2011 despite a continued contraction in Japan and slower growth in the United States as growth in most major European economies and Canada accelerated strongly.
Real GDP grew by 0.8% in the European Union compared to 0.2% in the previous quarter. This acceleration was driven by Germany (where GDP grew by 1.5%), France (1.0%) and the United Kingdom, where the economy expanded by 0.5% after a 0.5% contraction in the previous quarter. In Italy growth remained at 0.1%. Euro area GDP grew by 0.8% compared to 0.3% in the previous quarter.
Among non-European countries, GDP in Canada grew by 1.0%, up from 0.8% in the previous quarter. In the United States GDP slowed to 0.4% compared with 0.8% in the previous quarter. In Japan, GDP contracted by 0.9% following a 0.8% contraction in the previous quarter, partly reflecting the impact of the natural disaster of 11 March 2011.
Source: OECD
