The accumulated ETF securities in Asia (Japan, Malaysia,
Indonesia, Thailand, Singapore, Hong Kong or HK for short, and China)
currently total around $70 billion. This number has continued to
increase substantially since 2008. ETFs are such a financially
successful innovation in Asia because the expense ratio is so much lower
than in other countries. Now investment with these emerging economies
is easier than it has ever been.
You will find some of the largest ETFs in China, Hong Kong, Malaysia, Singapore, Indonesia, and South Korea. Surprisingly, Japan is not among these. A few years ago Japan would have been at the top of any Asian financial list for any kind of security. With the introduction of ETFs, the Asian financial scene looks dramatically different. Now the two main powerhouses are Singapore and Hong Kong. This is especially true when it comes to synthetic ETFs.
Hong Kong is presently on the tippy top of synthetic ETFs in a region where Hong Kong and Singapore are the only countries to delve into the matter. Right now they have 70 synthetic ETF listings while Singapore only has 44. Knowing the liquid nature of the Asian market, it should come as no surprise to learn that that is expected to change. Researchers project that the Singapore market alone will rise from its present ETF value of $1 billion to $70 billion by 2014. However, they also project that in the same allotment of time that HK, the other Asian ETF securities powerhouse, will fall from its present standing of $8 billion dollars to a mere $4.5 billion. Alarmed at these predictions, some of HK's ETF clients have already started distancing themselves. This includes the two biggest Asian providers of synthetic ETFs, Deutsch Bank AG and Lyxor Asset Management, Lyxor says that ETF in Hong Kong will at its present rate of financial decline soon be insufficiently cost-effective. Lyxor has a backup plan in, you guessed it, Singapore. It owns 26 synthetic ETFs in Singapore and plans to add more.
Deutsche Bank has been slower in retreating. Hong Kong has had time to try its best to keep its clients in the fold. They are also making similar efforts to keep its other clients. As a result, the projections concerning these regions might not come true. We'll just have to wait for 2014 to see if that's true. Unless the Mayans were right and we aren't around then.
You will find some of the largest ETFs in China, Hong Kong, Malaysia, Singapore, Indonesia, and South Korea. Surprisingly, Japan is not among these. A few years ago Japan would have been at the top of any Asian financial list for any kind of security. With the introduction of ETFs, the Asian financial scene looks dramatically different. Now the two main powerhouses are Singapore and Hong Kong. This is especially true when it comes to synthetic ETFs.
Hong Kong is presently on the tippy top of synthetic ETFs in a region where Hong Kong and Singapore are the only countries to delve into the matter. Right now they have 70 synthetic ETF listings while Singapore only has 44. Knowing the liquid nature of the Asian market, it should come as no surprise to learn that that is expected to change. Researchers project that the Singapore market alone will rise from its present ETF value of $1 billion to $70 billion by 2014. However, they also project that in the same allotment of time that HK, the other Asian ETF securities powerhouse, will fall from its present standing of $8 billion dollars to a mere $4.5 billion. Alarmed at these predictions, some of HK's ETF clients have already started distancing themselves. This includes the two biggest Asian providers of synthetic ETFs, Deutsch Bank AG and Lyxor Asset Management, Lyxor says that ETF in Hong Kong will at its present rate of financial decline soon be insufficiently cost-effective. Lyxor has a backup plan in, you guessed it, Singapore. It owns 26 synthetic ETFs in Singapore and plans to add more.
Deutsche Bank has been slower in retreating. Hong Kong has had time to try its best to keep its clients in the fold. They are also making similar efforts to keep its other clients. As a result, the projections concerning these regions might not come true. We'll just have to wait for 2014 to see if that's true. Unless the Mayans were right and we aren't around then.
No comments:
Post a Comment