Emerging Market Debt
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34-66489; File No
SECURITIES AND EXCHANGE COMMISSION (Release No. 34-66489; File No. SR-NASDAQ-2012-004) February 29, 2012 Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Order Granting Approval of Proposed Rule Change Relating to the Listing and Trading of Shares of the Emerging Markets Corporate Bond Fund of the WisdomTree Trust I. Introduction On January 4, 2012, The NASDAQ Stock Market LLC (“Nasdaq” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)1 and Rule 19b-4 thereunder,2 a proposed rule change to list and trade the shares (“Shares”) of the WisdomTree Emerging Markets Corporate Bond Fund (“Fund”) of the WisdomTree Trust (“Trust”) under Nasdaq Rule 5735. The proposed rule change was published for comment in the Federal Register on January 24, 2012.3 The Commission received no comments on the proposal. This order grants approval of the proposed rule change. II. Description of the Proposed Rule Change The Exchange proposes to list and trade the Shares of the Fund under Nasdaq Rule 5735, which governs the listing and trading of Managed Fund Shares on the Exchange. The Fund will be an actively managed exchange-traded fund. The Shares will be offered by the Trust, which was established as a Delaware statutory trust on December 15, 2005. The Fund is registered with the Commission as an investment company and has filed a registration statement on Form N-1A 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 See Securities Exchange Act Release No. -
The Biggest Short Buy and Maintain Investors May Wish to Consider
March 2021 | The biggest short For professional clients only. Not to be distributed to retail clients. The biggest short Why we believe buy and maintain investors may wish to consider allocating to emerging market debt. Mark Vickery Client Director John Gray Emerging Markets Portfolio Manager Active Fixed Income For defined benefit (DB) pension schemes, particularly those of greater maturity, buy and maintain allocations have been increasing in popularity and are now widely adopted. Business centre, Moscow, Russia Buy and maintain investment generally involves: believe that allocating to emerging market corporate bonds, • an active selection of high quality global bonds to hold, ideally alongside traditional developed market corporate bonds, is one until maturity; of the key tools in creating high quality buy and maintain • reduced trading costs resulting from low turnover; portfolios. • duration targeting to help mitigate interest rate risks, affecting schemes’ liabilities; In this article, we present five reasons why we believe DB • yield generation above gilts to improve funding positions; pension schemes may wish to consider including emerging • and for those schemes whose ultimate target is buyout, market bonds in their portfolios as they progress along their corporate bonds can also provide a reduction in the cost of journey to their chosen endgame. their transaction. In order to achieve all this, schemes invest on a global basis in corporate bonds. However, UK DB pension schemes in fact remain significantly short of emerging market exposure. We The value of an investment and any income taken from it is not guaranteed and can go down as well as up, you may not get back the amount you originally invested. -
Currency Wars, Recession Policies and the Overvalued Euro Are to Be Blamed for the Modern Greek Tragedy
International Journal in Economics and Business Administration Volume IV, Issue 1, 2016 pp. 3 - 19 Currency Wars, Recession Policies and the Overvalued Euro are to be Blamed for the Modern Greek Tragedy Theodore Katsanevas* Abstract: In this paper we argue that, Modern Greek Tragedy is mainly due to the overvalued euro in combination with the strict austerity policies imposed by Berlin. Greece also pays the price of the currency war between the dollar and the euro. The latter puts a heavy burden upon the country’s economic competitiveness as a costume that does not fit the Greek economy, which is mainly based on tourism that requires a labour-intensive production process. The deadlocks of strict monetary and income’s policies, accelerates the upcoming economic thunderstorm, the spiral of recession, the increase in unemployment, the brutal reduction of wages and pensions, the further fall of GDP and the increase of the debt. The always renewed fatal economic forecasts, simply postpone the explosion of the deadlock. Basic economics in theory and in practice are being depreciated. One wonders if there are economists, neoliberals, not to mention, Keynesians and/or radicals that, may support the possibility of an economic recovery under deep recession policies and the existence of a hard currency such as the euro. Trapped under the Berlin’s political prison and the euro zone fetish, Greece continues to follow its tragic road on the grounds that there is no alternative. Yet, in democracies there are no dead ends. If an economic policy is proven to be wrong and catastrophic, the best alternative is to change it. -
Robert Carbaugh and David Hedrick, Will the Dollar Be Dethroned As the Main Reserve Currency?
Global Economy Journal Volume 9, Issue 3 2009 Article 1 Will the Dollar be Dethroned as the Main Reserve Currency? Robert J. Carbaugh∗ David W. Hedricky ∗Central Washington University, [email protected] yCentral Washington University, [email protected] Copyright c 2009 Berkeley Electronic Press. All rights reserved. Will the Dollar be Dethroned as the Main Reserve Currency? Robert J. Carbaugh and David W. Hedrick Abstract The U.S. dollar was in the line of fire as leaders from the largest developed and developing countries participated in the G8 meeting in July, 2009. China and other emerging market heavy- weights such as Russia and Brazil are pushing for debate on an eventual shift away from the dollar to a new global reserve currency. These countries are particularly concerned about the heavy debt burden of the United States and fear inflation will further debase the dollar which has lost 33 percent in value against other major currencies since 2002. Will the dollar continue as the main reserve currency of the world? What are the other currencies to watch as challengers to the throne? This paper addresses these questions. KEYWORDS: international policy, open economy macroeconomics Carbaugh and Hedrick: Dollar as a Reserve Currency Since the 1940s, the U.S. dollar has served as the main reserve currency of the world. Dollars are used throughout the world as a medium of exchange and unit of account, and many nations store wealth in dollar-denominated assets such as Treasury securities. The dollar’s attractiveness has been supported by a strong and sophisticated U.S. economy and its safe-haven status for international investors. -
Investing in Emerging Market Debt
FALL 2020 VOLUME 30 NUMBER 2 (Systematic) Investing in Emerging Market Debt THE JOURNAL OF JORDAN BROOKS, SCOTT RICHARDSON, AND ZHIKAI XU JFI.PM-RESEARCH.COM permission. Publisher without electronically post to or user, unauthorized an to forward article, this of copies unauthorized make to illegal is It (Systematic) Investing in Emerging Market Debt JORDAN BROOKS, SCOTT RICHARDSON, AND ZHIKAI XU permission. Publisher without JORDAN BROOKS is at AQR Capital KEY FINDINGS Management LLC • We find that a systematic approach to active risk taking “works” in emerging market (EM) electronically in Greenwich, CT. fixed income. Exposures linked to carry, defensive, momentum and valuation themes post [email protected] have been well compensated in EM markets. to or • We further find that an excess of benchmark returns for incumbent EM managers contains SCOTT RICHARDSON a lot of traditional beta and significant macroeconomic sensitivities. user, is a professor at the • There is potentially a large diversification benefit for a well-crafted systematic long-only London Business School portfolio of EM bonds. and is affiliated with AQR Capital Management LLC unauthorized in Greenwich, CT. an [email protected] to ABSTR ACT: The authors extend the analysis of (corporate and sovereign) domiciled in systematic investment approaches to emerging market emerging markets and can be issued in local ZHIKAI XU forward (EM) fixed income. They focus on hard currency and hard (typically USD) currency. J. P. is at AQR Capital Management LLC bonds issued by emerging sovereign and quasi-sovereign Morgan’s global EM indices, which capture article, in Greenwich, CT. entities. They find that systematic exposures linked to the investible section of EM markets, have this [email protected] carry, defensive, momentum, and valuation themes are increased from around 350 billion USD in of well compensated and lowly correlated in EM mar- 2002 to nearly 2.5 trillion by the end of copies kets. -
Foreign Exchange Intervention in Asian Countries: What Determine the Odds of Success During the Credit Crisis? Mei-Ching Chang National Chengchi University
University of Wollongong Research Online Faculty of Business - Papers Faculty of Business 2017 Foreign exchange intervention in Asian countries: What determine the odds of success during the credit crisis? Mei-Ching Chang National Chengchi University Sandy Suardi University of Wollongong, [email protected] Yuanchen Chang National Chengchi University Publication Details Chang, M., Suardi, S. & Chang, Y. (2017). Foreign exchange intervention in Asian countries: What determine the odds of success during the credit crisis?. International Review of Economics and Finance, 51 370-390. Research Online is the open access institutional repository for the University of Wollongong. For further information contact the UOW Library: [email protected] Foreign exchange intervention in Asian countries: What determine the odds of success during the credit crisis? Abstract This paper investigates the factors that increase the odds of intervention success by Asian central banks in the foreign exchange market from January 2005 to November 2013. The er sults show that leaning-against-the- wind intervention strategies are effective in Indonesia, Malaysia, Philippines, Singapore, South Korea, Taiwan, and Thailand, particularly to counter the pressure of appreciating domestic currency by purchasing US dollar. We find that coordinated and first day interventions are associated with higher odds of effective intervention. There is also evidence that central banks intervene to calm disorderly market. Disciplines Business Publication Details Chang, M., Suardi, -
The Mechanics of a Successful Exchange Rate
FEDERAL RESERVE BANK OF ST.LOUIS that would have hinted at problems for Thailand The Mechanics of a prior to July 1997. The next section discusses alternative exchange Successful Exchange rate regimes to put the unilateral peg in context. The third section presents an empirical model of mone- Rate Peg: Lessons for tary policy to describe the mechanics with which Austria pegged its exchange rate. The fourth section Emerging Markets applies the same model to describe Thailand’s monetary policy and the contrast with Austria. Michael J. Dueker and Andreas M. Fischer ALTERNATIVE EXCHANGE RATE xchange rate pegs collapsed in many coun- REGIMES tries in the 1990s, leading to dreary assess- As a prelude to an analysis of the mechanics Ements of the merits of pegged exchange rate of a unilateral exchange rate peg, it is useful to regimes. Whether one points to the failure of describe the spectrum of alternative exchange rate Mexico’s peg in December 1994 or to the sharp regimes. In addition to unilateral exchange rate devaluations in East Asia in 1997-98, in Russia in pegs, there are five other exchange rate regimes: a August 1998, and in Brazil in January 1999, the floating rate (including managed floats), multilateral collapse of unilateral exchange rate pegs often exchange rate pegs, currency boards, dollarization, preceded acute financial and macroeconomic and currency union. We describe here where the crises. Despite recent failures, however, exchange unilateral peg lies along the spectrum. Since the rate pegs remain a prevalent policy choice. Calvo end of the Bretton Woods system of fixed exchange and Reinhart (2000) argue that the exchange rate rates in 1973, floating exchange rates have displayed volatility that accompanies a floating exchange rate a very high degree of variability without a corre- regime is particularly onerous to emerging markets, sponding increase in the variability of exchange rate and thus can be a worse policy choice than a peg fundamentals (Flood and Rose, 1999). -
Design and Operation of Existing Currency Board Arrangements
2 0 3 Ma³gorzata Jakubiak Design and Operation of Existing Currency Board Arrangements W a r s a w , 2 0 0 0 Materials published here have a working paper character. They can be subject to further publication. The views and opinions expressed here reflect Authors’ point of view and not necessarily those of CASE. This paper was prepared for the research project "Ukraine Macroeconomic Policy Program" financed by the United States Agency for International Development (USAID). © CASE – Center for Social and Economic Research, Warsaw 2000 Graphic Design: Agnieszka Natalia Bury DTP: CeDeWu – Centrum Doradztwa i Wydawnictw “Multi-Press” sp. z o.o. ISSN 1506-1701, ISBN 83-7178-208-X Publisher: CASE – Center for Social and Economic Research ul. Sienkiewicza 12, 00-944 Warsaw, Poland tel.: (4822) 622 66 27, 828 61 33, fax (4822) 828 60 69 e-mail: [email protected] Contents Abstract 5 1. Definition 6 2. How are Currency Boards Related to Other Monetary and Exchange Rate Regimes? 6 3. Experience from Existing Currency Boards 8 3.1. Design of Existing Currency Board 8 3.2. Implementation Experience and Long-Term Effects 11 4. Advantages and Disadvantages of the Currency Board Arrangement 17 5.What Conditions Must Be Satisfied in Order to Be Able to Implement a Currency Board Regime? 20 References 22 Studies & Analyses CASE No. 203 – Ma³gorzata Jakubiak Ma³gorzata Jakubiak Junior Researcher, CASE Foundation The author holds an MA in International Economics from the University of Sussex and an MA in Economics from the University of Warsaw. Since 1997 junior researcher at the Center for Social and Economic Research – CASE. -
Economic and Political Effects on Currency Clustering Dynamics
Quantitative Finance,2019 Vol. 19, No. 5, 705–716, https: //doi.org/10.1080/14697688.2018.1532101 ©2018iStockphotoLP Economic and political effects on currency clustering dynamics M. KREMER †‡§*††, A. P. BECKER §¶††,I.VODENSKA¶, H. E. STANLEY§ and R. SCHÄFER‡ ∥ †Chair for Energy Trading and Finance, University of Duisburg-Essen, Universitätsstraße 12, 45141 Essen, Germany ‡Faculty of Physics, University of Duisburg-Essen, Lotharstraße 1, 47048 Duisburg, Germany §Center for Polymer Studies and Department of Physics, Boston University, 590 Commonwealth Avenue, Boston, MA 02215, USA ¶Department of Administrative Sciences, Metropolitan College, Boston University, 1010 Commonwealth Avenue, Boston, MA 02215, USA Research and Prototyping, Arago GmbH, Eschersheimer Landstraße 526-532, 60433 Frankfurt am Main, Germany ∥ (Received 20 December 2017; accepted 7 September 2018; published online 13 December 2018) The symbolic performance of a currency describes its position in the FX markets independent of a base currency and allows the study of central bank policy and the assessment of economic and political developments 1. Introduction currency to another currency, using their assets in the mar- ket to accomplish a fixed exchange rate. If a central bank does Similar to other financial markets, exchange rates between not intervene, its currency is considered free-floating, mean- different currencies are determined by the laws of supply ing that the exchange rate is mostly determined by market and demand in the forex market. Additionally, market partic- forces. Some central banks allow their currency to float freely ipants (financial institutions, traders, and investors) consider within a certain range, in a so-called managed float regime. macroeconomic factors such as interest rates and inflation The value of any given currency is expressed with respect to assess the value of a currency. -
Historical Precedents for Internationalization of The
Maurice R. Greenberg Center for Geoeconomic Studies and International Institutions and Global Governance Program Historical Precedents for Internationalization of the RMB Jeffrey Frankel November 2011 This publication has been made possible by the generous support of the Robina Foundation. The Council on Foreign Relations (CFR) is an independent, nonpartisan membership organization, think tank, and publisher dedicated to being a resource for its members, government officials, busi- ness executives, journalists, educators and students, civic and religious leaders, and other interested citizens in order to help them better understand the world and the foreign policy choices facing the United States and other countries. Founded in 1921, CFR carries out its mission by maintaining a diverse membership, with special programs to promote interest and develop expertise in the next generation of foreign policy leaders; convening meetings at its headquarters in New York and in Washington, DC, and other cities where senior government officials, members of Congress, global leaders, and prominent thinkers come together with CFR members to discuss and debate major in- ternational issues; supporting a Studies Program that fosters independent research, enabling CFR scholars to produce articles, reports, and books and hold roundtables that analyze foreign policy is- sues and make concrete policy recommendations; publishing Foreign Affairs, the preeminent journal on international affairs and U.S. foreign policy; sponsoring Independent Task Forces that produce reports with both findings and policy prescriptions on the most important foreign policy topics; and providing up-to-date information and analysis about world events and American foreign policy on its website, CFR.org. The Council on Foreign Relations takes no institutional positions on policy issues and has no affilia- tion with the U.S. -
Corporate Borrowing in Emerging Markets: Fairly Long Term, but Only for a Few
Research & Policy Briefs From the World Bank Chile Center and Malaysia Hub No. 18, October 2018 Corporate Borrowing in Emerging Markets: Fairly Long Term, but Only for a Few Juan J. Cortina, Tatiana Didier, and Sergio L. Schmukler It is generally believed that firms in emerging markets rely on shorter-term instruments than firms in advanced economies. In recent Public Disclosure Authorized years, firms in emerging market economies have substantially increased the amount of debt raised in global bond and syndicated loan markets, triggering concerns about their exposure to rollover risks. However, new evidence examined in this policy brief shows that emerging market firms have been using these markets to borrow long term, possibly diminishing the risks associated with higher debt levels and foreign currency financing. Challenging the conventional wisdom, large firms from emerging markets have issued bonds and syndicated loans at maturities similar to those issued by firms from advanced economies. These findings have implications for understanding the sources of short-termism in emerging markets, the actual risks emerging economies face from rising levels of corporate borrowing, and the policy measures that might help firms that cannot borrow long term. Debt issuance by firms in emerging markets has expanded at a 2017). Moreover, increasing foreign currency exposure can very fast pace since the early 1990s. The total amount of debt exacerbate debt burdens (measured in domestic currency) in the issued through domestic and cross-border bonds and syndicated event of sudden exchange rate depreciations, if such debt is not loans increased nearly 30-fold in emerging markets between properly hedged (Acharya et al. -
Reinvigorating Credit Growth in Central, Eastern, and Southern European Economies
Haverford College Haverford Scholarship Faculty Publications Economics 2015 Reinvigorating Credit Growth in Central, Eastern, and Southern European Economies Bosjan Jazbec Cristopher Towe Marco Pinon Biswajit Banerjee Haverford College Follow this and additional works at: https://scholarship.haverford.edu/economics_facpubs Repository Citation Bostjan Jazbec, Christopher M. Towe, Marco Pinon, and Biswajit Banerjee, Eds. Reinvigorating Credit Growth in Central, Eastern, and Southern European Economies: Proceedings of a Conference Jointly Organized by the Bank of Slovenia and the International Monetary Fund. Washington, D.C.: International Monetary Fund, Publication Services, 2015. This Conference Proceeding is brought to you for free and open access by the Economics at Haverford Scholarship. It has been accepted for inclusion in Faculty Publications by an authorized administrator of Haverford Scholarship. For more information, please contact [email protected]. In Central, Eastern, and Southern European Economies In Central,Eastern,andSouthernEuropean Reinvigorating CreditGrowth REINVIGORATING CREDIT GROWTH In Central, Eastern, and Southern European Economies Edited by Boštjan Jazbec, Christopher M. Towe, Marco Piñón, and Biswajit Banerjee Marco Piñón, and Biswajit Banerjee Marco Piñón,andBiswajit ChristopherM.Towe, Edited byBoštjanJazbec, Reinvigorating Credit Growth Proceedings of a conference jointly organized In Central, Eastern, and Southern European Economies RCGMCMEA by the Bank of Slovenia and the International Monetary Fund