Tuesday 31st March 2015
NEWS TICKER: MONDAY MARCH 30th 2015 : According to LuxCSD several unions in Argentina have called for a strike on tomorrow. It is still not known whether the Central Bank of Argentina, Caja de Valores as Central Depository and/or the Argentine Stock Exchange will adhere to this strike, and of the possible impact on settlement and cash operations. Citi, which is LuxCSD’s custodian, will be keeping the securities depositary updated on developments. LuxCSD says its customers are advised to take into consideration the possibility of disruption and delays in the settlement and cash processes - Capital Intelligence (CI) has affirmed Bahrain's Long-Term Foreign and Local Currency Ratings of 'BBB' and its Short-Term Foreign and Local Currency Ratings of 'A2'. The Outlook for Bahrain's ratings was revised to 'Negative' from 'Stable'.Deterioration in the public finances in view of the country's dependence on declining oil revenues, in addition to continued increase in debt levels. b) Deterioration in current account position in view of the decline in the value of oil exports, which limits the country's shock absorption capacity. Reflecting rising public expenditure and declining international oil prices, the budget deficit is expected to have doubled to 6.8 per cent of GDP in 2014 and is on course to exceed 12 per cent in the coming years, assuming no change in key policies and an average oil price of $50 per barrel in 2015-16. The central government budget structure remains weak in view of the lack of diversification of government revenue (oil accounts for around 88 per cent of central government revenue), and the absence of fiscal consolidation measures in view of the polarised political climate. Spurred by growing deficit, central government debt level continued its increase reaching 47.1 per cent of GDP in 2014, compared to as low as 21.4 per cent of GDP in 2009, while it is expected to top 69.2 per cent of GDP in 2016. Gross financing needs are also expected to increase to a still manageable level of 18.5 per cent of GDP in 2016, compared to 7.5 per cent of GDP in 2013 - French operator Bouygues Telecom says it will roll out one of the first implementations of LoRa low-power WAN technology, designed specifically to support the Internet of Things (IoT) connectivity, in France by June. The underlying technology was developed by French company Cycleo. The purpose of an IoT-specific wireless networking technology is primarily to be as low-power as possible. Many IoT implementations will be industrial, embedded use-cases where replacing power sources is expensive and impractical. Bouygues has been trialling LoRa in Grenoble since 2013 and expects 500 towns and cities to be covered by year end. KPN, Swisscom, Belgacom and Fastnet are also reported to be ready to deploy LoRa networks or carrying out large-scale trials. “The Internet of Things is going to transform entire areas of our economy, says Olivier Roussat, Chairman and CEO of Bouygues Telecom in an official statement - Moody's has today assigned a Baa2 long-term rating to the new hybrid securities issued by Bayer AG. The rating outlook is stable. The rating of Baa2 is two notches below Bayer's A3 senior unsecured rating. This reflects the deeply subordinated ranking of the new hybrid securities in relation to the existing senior unsecured obligations of Bayer or those issued by its subsidiaries and guaranteed by Bayer. The new hybrid securities will be senior to common shares - The Straits Times Index (STI) ended +4.16 points higher or +0.12% to 3454.26, taking the year-to-date performance to +2.65%. The FTSE ST Mid Cap Index gained +0.10% while the FTSE ST Small Cap Index gained +0.03%. The top active stocks were SingTel (-1.13%), UOB (-0.13%), DBS (+0.30%), Global Logistic (+0.76%) and CapitaLand (+1.39%). The outperforming sectors today were represented by the FTSE ST Consumer Goods Index (+0.89%). The two biggest stocks of the FTSE ST Consumer Goods Index are Wilmar International (-0.61%) and Thai Beverage (+3.36%). The underperforming sector was the FTSE ST Telecommunications Index, which declined -1.05% with SingTel’s share price declining -1.13% and StarHub’s share price declining-0.23%. The three most active Exchange Traded Funds (ETFs) by value today were the DBXT S&P/ASX 200 ETF (unchanged), STI ETF (unchanged), DBXT FTSE Vietnam ETF (+1.19%) – The Singapore Exchange (SGX) says that UOB Bullion and Futures Limited (UOBBF) has joined as a trading member of its securities market. Chew Sutat, head of sales and clients, SGX says the membership enables UOBBF to offer “another product class to their regional clients, thus adding to liquidity in the securities market. We also look forward to working with UOBBF to bring their existing derivatives customers to all our markets. As an SGX Securities Trading Member, UOBBF will be able to offer equity trading services to institutional clients, and accredited and expert investors. SGX now has 27 trading members and 26 clearing members - Taking their cue from the positive tone in Wall Street on Friday, major Asian equity markets were firmer today favoured by market expectations for the adoption of further policy stimulus by Chinese authorities to support domestic economic activity. Elsewhere, US Treasuries were modestly firmer in early trade on Monday while the FOMC Chairman’s mildly hawkish remarks assisted the USD to move higher says Eurobank’s mid-morning markets review. According to the bank discussions between Greek authorities and the Brussels Group on a fully-costed list of reforms the Greek side submitted late last week are reportedly expected to continue on Monday for the third consecutive day. Local press reports suggested today that a number of issues still remain open. On the latter, local newswires quoted an unnamed high level euro area official as saying that the Euro Working Group will likely assess Greece’s reform proposals later this week (reportedly on Wednesday) but euro area finance ministers are not expected to convene before all the details are ironed out. Meanwhile, Prime Minister Alexis Tsipras has reportedly requested an extraordinary plenary session to be held today at 8pm Greek time to inform the Hellenic Parliament about the progress of ongoing discussions with the Institutions - Standard & Poor's revised last Friday the outlook on the Republic of Cyprus sovereign credit rating to positive from stable, affirming the country's B+/B long- and short-term foreign and local currency sovereign credit ratings - Nearly two thirds (61%) of small and medium sized companies who are yet to undertake auto enrolment say they would welcome the publication of a definitive list of pension providers that accept all firms - regardless of size - to help them comply with their auto enrolment duties, according to new research* by workplace pensions provider NOW: Pensions. Of the SMEs surveyed who are yet to stage, two thirds (66%) don’t have any existing pension arrangements for their staff while 8% have a stakeholder pension scheme set up but don’t have any members of staff in it. A quarter already offer a scheme to a proportion of their workforce. When it comes to selecting a pension provider for auto enrolment, over a quarter (27%) of those who are yet to stage still say they haven’t given any thought to how they’ll go about finding a pension provider, down from 44% in 2014**. One in ten (12%) are going to search the market and do the research themselves, up from just 4% of those firms surveyed in 2014. When it comes to seeking external advice, over a quarter (26%) intend to get help from their accountant up from 14% in 2014. One in six (16%) intend to rely on their existing provider, down from 22% in 2014. Just 6% plan to speak to a financial adviser up from 5% in 2014. Morten Nilsson, CEO of NOW: Pensions said: “As smaller companies begin to tackle auto enrolment, the number planning on choosing their pension provider without any advice is inevitably going to grow. “This is why The Pensions Regulator’s (TPR) decision earlier this month not to publish a list of pensions schemes that are directly available to any employer, was so disappointing. The reality is these firms urgently need help to find high quality, low cost providers that are willing to accept their business, and the regulator needs to hear their pleas before it is too late.” - Harkand has secured a multi-million pound contract with Maersk Oil North Sea Ltd for the provision of DSV services in the North Sea region. The 12-month contract will be serviced by Harkand’s two DSVs, the Harkand Da Vinci and Harkand Atlantis, supported by project management and engineering from the firm’s Aberdeen office. The contract covers well tie-ins, structure installation, piling, flexible flow line lay, flexible riser installation, pre-commissioning, riser recovery, decommissioning and general inspection, repair and maintenance (IRM) work. Harkand Europe managing director, David Kerr explains, “This contract win is a further acknowledgment, not only of the expertise and capacity we have built up within the region, but also the open culture that we have at Harkand. We look forward to delivering a consistent and cost efficient service to Maersk, which is especially critical in today’s business environment. By utilising both our sister DSVs, we will provide a robust and fully flexible approach to executing both planned and unplanned interventions and we will work closely with Maersk to ensure safe and successful campaigns.” The Harkand DaVinci and Harkand Atlantis are both equipped with state-of-the-art saturation diving systems, 140t active heave compensated cranes and Super Mohawk ROV spreads -Alcatel-Lucent has announced a partnership with China Telecom to roll out the operator’s FDD-LTE services to 40 additional cities across 12 Chinese provinces. The French infrastructure vendor said it is one of three suppliers to have been chosen by the telco, and will provide its LTE mobile ultra-broadband access technology to complete the project.
Mark Wiedman, global head of BlackRock’s iShares brand. Mark Wiedman, global head of BlackRock’s iShares brand. Photograph kindly supplied by iShares, November 2011.

20-20: Turning BlackRock's ETF fortunes

Thursday, 15 December 2011
20-20: Turning BlackRock's ETF fortunes Mark Wiedman’s appointment as global head of BlackRock’s iShares brand is a concerted effort to sharpen the focus of the consortium of exchange-traded funds launched by BGI in May 2000 that combines index fund-style diversification with the liquidity of stock trading. To date, iShares accounts for roughly half of the estimated $1.1trn in US-based ETF assets. While AUM continues to grow at a steady clip, competitors have gradually whittled away at the company’s domestic market share (currently around 43%). Can Wiedman buck the trend? David Simons reports. http://www.ftseglobalmarkets.com/media/k2/items/cache/bd3eebf32e04c907d6d9fc42f4213df5_XL.jpg

Mark Wiedman’s appointment as global head of BlackRock’s iShares brand is a concerted effort to sharpen the focus of the consortium of exchange-traded funds launched by BGI in May 2000 that combines index fund-style diversification with the liquidity of stock trading. To date, iShares accounts for roughly half of the estimated $1.1trn in US-based ETF assets. While AUM continues to grow at a steady clip, competitors have gradually whittled away at the company’s domestic market share (currently around 43%). Can Wiedman buck the trend? David Simons reports.

During a recent earnings conference call, Laurence Fink, BlackRock’s chairman and chief executive, likened the recent run-up in ETF product innovation to the pre-crisis market for mortgage-backed instruments. BlackRock, said Fink, “needs to be very assertive as a firm” in order to prevent “a lack of disclosure on these products”.

To help address issues such as transparency—while also enhancing its ETF product line—BlackRock in September 2011 announced it had tapped Mark Wiedman, managing director in charge of corporate strategy, to serve as the new global head of  iShares, the ETF provider acquired by BlackRock as part of the 2009 buyout of Barclays Global Investors (BGI). Wiedman succeeds Mike Latham, who will continue as iShares chairman. Having served as an adviser to global financial institutions on balance-sheet issues at the height of the crisis, as well as heading up corporate strategy for BlackRock, Wiedman got a “crash course” in understanding clients’ problems and mobilising BlackRock’s capabilities in order to solve them. “I worked closely with iShares throughout the BGI integration and on iShares strategy work, so I stepped into the role with some familiarity with the businesses and the terrific leadership team,” says Wiedman.



ETFs appear to be still in their infancy, and have benefited from factors that include greater use of fixed-income and commodity-based products, increased uptake among fee-based advisers, as well as new product launches within the major exchanges. These conditions will likely pave the way for larger ETF fund allocations over the near term. Wiedman claims: “ETFs are one of the top two or three socially productive financial innovations of the past 40 years, with a value proposition that speaks to a galaxy of clients, from sovereign wealth funds to retail investors. ETFs deliver efficient exposure to global markets using the most democratic, transparent, and liquid vehicle yet devised.”

From the perspective of iShares, key growth drivers over the near term include fixed-income ETFs (which currently represent only a fractional amount of total outstanding bonds within the US), as well as equity income. Meanwhile, the potential for across-the-board ETF uptake exists in nearly every market around the world, says Wiedman.

Unifying US and foreign ETF platforms was a priority for BlackRock following the acquisition of iShares, and the ability to offer both US and European product lines to investors around the globe has been one of iShares’ greatest strengths to date.  “Some 15% of the assets in domestic ETFs are currently held outside the US and in Europe in 2011, we’ve seen over 15% organic growth, in part driven by buyers from Asia. As we look forward, our UCITS-compliant European product line could possibly become the de facto global standard,” says Wiedman.

The rise in ETF fund flows has coincided with a marked increase in product complexity, and, in some instances, has sparked concerns over opacity. For its part, the SEC continues to take a dim view of derivatives-based ETF products, compelling many providers to back away from such offerings.  

Wiedman notes: “We would call products that trade on an exchange ‘exchange-traded products’ or ‘ETPs’ while reserving the label ‘ETF’ for a sub-category that meets certain agreed standards of simplicity and transparency, including backing by underlying securities, rather than derivatives. We understand that regulators around the world will have different views. However, we believe that a standardised classification system could help regulators develop appropriate rules in each jurisdiction.”

The proliferation of so-called “cheap beta” ETF products—or, in some instances, ETFs that are totally commission-free—has had a dramatic impact on the business as a whole. Rather than attempt to compete on price, however, iShares has instead turned its attention toward product development, including active ETFs, which mimic the performance of hedge funds at a fraction of the cost. In August 2011, the company sought the SEC’s permission to launch a set of actively-managed equity ETFs, each based on proprietary BlackRock benchmarks.

“If there is a one thing I learned from my past experience at BlackRock, it’s that iShares will succeed by doing what we do best—not by playing on others’ terms,” offers Wiedman. “We are the sole global player competing against regional players in every market. No one can match our global presence, scale, or brand. Capitalising on that unique position is where our future lies.”

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