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IEA Investment Report: What is Right; What is Wrong

Posted on 11 June 2014 by VRS  |  Email |Print

Recently, the IEA published a “Special Report” called World Energy Investment Outlook. Lets’s start with things I agree with: 1. World needs $48 trillion in investment to meet its energy needs to 2035. This is certainly true, if we assume, as the IEA assumes, that world economic growth will actually improve a bit, from 3.3% per year in the 1990 to 2011 period to 3.6% per year in the 2011 to 2035 period. It is likely that the growth in investment needs will be even higher than the IEA indicates.
In my view, this is a CYA report. The IEA sees trouble ahead. There is no way that investment of the needed amount (which is likely far more than $48 trillion) can be met. With the publication of this report, the IEA can say, “We told you so. You didn’t invest enough. That is why energy supply ran into huge problems.”……………………………………….Full Article: Source

India: FMC takes steps to restore investor confidence in commodities market

Posted on 09 June 2014 by VRS  |  Email |Print

To revive investor confidence in commodities market that has plummeted after the NSEL crisis, sector regulator FMC has asked the Securities and Exchange Board of India (SEBI) to make it mandatory for listed companies to disclose their exposure in commodities hedging.
The Forward Markets Commission (FMC) has also written to the Finance Ministry to direct banks to insist on borrowers, who have exposure to commodities, hedging their price risks………………………………………..Full Article: Source

IEA warns of looming energy investment shortfall

Posted on 06 June 2014 by VRS  |  Email |Print

A looming energy investment shortfall risks derailing carbon-reduction targets the International Energy Agency (IEA) has warned. In a new report, World Energy Investment Outlook, the IEA said that to meet global energy demand, around $40 trillion will need to be invested by 2035, while a further $8 trillion will need to be spent on energy efficiency.
“The reliability and sustainability of our future energy system depends on investment,” IEA executive director Maria van der Hoeven said. “There is a real risk of shortfalls, with knock-on effects on regional or global energy security, as well as the risk that investments are misdirected because environmental impacts are not properly reflected in prices.”……………………………………….Full Article: Source

Sell gold if it rallies to $1,267-70

Posted on 06 June 2014 by VRS  |  Email |Print

Comex gold futures are seen consolidating in a broad range moving with a bearish bias. As mentioned in the previous update, prices could further accelerate towards $1,245 or even lower to $1,220-25. An immediate target is around $1,220-25 levels. Failure to find support here could be seen a sign of weakness further denting sentiment.
Subsequently, prices have the potential to even test $1,185-90 range. Mild oversold conditions prevailing in charts could see a pullback to resistances in the coming week. Resistances will be seen at $1,260 followed by $1,278 now. Only a move above $1,285 could lessen the chances of the expected decline to above mentioned levels………………………………………..Full Article: Source

Five Reasons Why Indian Investors Are Selling Gold

Posted on 05 June 2014 by VRS  |  Email |Print

Spot gold prices in India are hovering around Rs. 27,000 per 10 gm, the lowest in over four months. The catalyst for the fall has been the recent easing of some import restrictions from the Reserve Bank of India. Also, traders anticipate a further fall in gold prices if the Narendra Modi government decides to rewind some of the import restrictions imposed by the earlier government.
Easing of Import Restrictions: The Reserve Bank of India last month removed some curbs on imports of gold. This led to a fall of Rs. 800 in gold prices on May 22, its biggest one-day fall this year. The RBI expanded the number of private agencies that can import the precious metal while also allowing banks to provide gold loans to the sector………………………………………..Full Article: Source

Mideast investment shortfall may hit oil prices

Posted on 04 June 2014 by VRS  |  Email |Print

A potential shortfall in investment in production in the Middle East could create a $15 increase in the oil price by 2025, the energy arm of the Organisation for Economic Co-operation and Development (OECD) said.
The world will need to invest $40 trillion in energy supply and $8trn on energy efficiency by 2035 to meet growing demand and falling output from mature sources of energy, the International Energy Agency (IEA) said in a report. A large proportion of the investment to increase output will need to come from the Middle East as a rise in non-Opec production such as US shale oil starts to lose steam in the mid-2020s………………………………………..Full Article: Source

Here’s How to Navigate the Commodity Investing Waters

Posted on 03 June 2014 by VRS  |  Email |Print

In the past couple of years, commodities have not been a good place to put your money. However, longer term, they have been outperforming stocks. Since the turn of the century, there are many commodities that have increased several multiples in price:
Oil has risen from $20 per barrel to more than $100 per barrel. Corn has risen from $2 per bushel to nearly $5 per bushel. Gold has risen from $250 per ounce to $1,250 per ounce. Copper has risen from less than $1 per pound to more than $3 per pound. This strong performance is due to a couple of factors. The first is rising demand, particularly from emerging market countries with economies that are growing rapidly………………………………………..Full Article: Source

Global investors show less confidence in Australia

Posted on 03 June 2014 by VRS  |  Email |Print

A new global study shows the US has extended its lead as the country with the most positive sentiment from offshore investors, while Australia has slipped in the rankings.
The closely watched analysis of investor sentiment, from consulting firm AT Kearney, saw Australia dip to eighth spot after being leapfrogged by both the United Kingdom and Germany………………………………………..Full Article: Source

Why Investors Should Consider Silver

Posted on 02 June 2014 by VRS  |  Email |Print

Silver is the one of the world’s most versatile commodities. Also classified as a currency, silver is one of the world’s best conductors of electricity and heat. Its versatility is exemplified by its use in products ranging from electronics, antiseptics, solar panels, silverware and jewellery.
In the commodity ETF world, silver ETF’s have among the lowest expense ratios, notably because silver is a quasi-currency with very low storage costs yet the majority of its demand is for industrial purposes. Demand is increasing rapidly along with increasing global per-capita incomes and rapid electrisation…………………………………….Full Article: Source

Why Investors Might Want To Exercise Caution

Posted on 30 May 2014 by VRS  |  Email |Print

The M&A frenzy in commodity related stocks is not taking place in the E&P plays like we suspected but rather a much more boring segment of the commodity space; food stocks. There is a rush to combine in the sector as companies look to build up scale in order to help in negotiating placement of their products as well as the price they receive.
This is a trend we suspect will continue and based off of all the recent action it appears that the sweet spot of the market is $4-8 billion market capitalization area. We are not speculators in the sector but if we were that is the area of the market we would focus on………………………………………..Full Article: Source

How to Invest in Commodities—and Why You Should

Posted on 28 May 2014 by VRS  |  Email |Print

For the first time since 2010, commodities are showing signs of life. So far this year, a diversified package of commodities is outpacing both the stock and bond markets. But if you hold some of these basic materials in your portfolio—or are tempted to get back in now—you’ll want to be careful about how you ride the turnaround.
Beyond improving performance, there are two good reasons to hold some commodities—or, to be more precise, investments that track the price of commodities. Diversification is one. Research shows that commodities typically don’t move in sync with stocks and bonds, and that’s holding true now………………………………………..Full Article: Source

In Australia, Mining Investment on a Swift Course Downward

Posted on 28 May 2014 by VRS  |  Email |Print

You know that feeling you get when the rollercoaster passes the crest of the hill and begins to accelerate downward, almost vertically? Welcome to the Australian economy — at least the investment component of it.
Australia is facing what has been dubbed a “capital expenditure cliff,” which essentially marks the moment when the gentle decline in mining investment over the past year gathers sudden, alarming speed. Data on first-quarter investment, due Thursday, is expected to show total business investment fell 1.5% from the fourth quarter, according to a survey of 15 economists by the Wall Street Journal………………………………………..Full Article: Source

Trillion-Dollar Question: Are Oil Companies Over-Investing in High-Cost Projects?

Posted on 27 May 2014 by VRS  |  Email |Print

Over the next decade, private-sector companies may invest over $1 trillion to develop new sources of high-cost oil production. Much of this future production will (1) be profitable only if oil prices remain near current (historically-high) levels; and (2) come online at a time when global oil demand may be entering the start of a long-term decline.
Investors in oil producers need to ask: how rigorously do these companies stress-test new projects against scenarios of declining oil demand and diminished oil prices? Last year the world consumed 91 million barrels per day of oil to fuel cars and trucks, heat buildings, make petrochemicals, and generate electricity, among other uses………………………………………..Full Article: Source

India: Commodity investors keep fingers crossed as Modi takes over

Posted on 26 May 2014 by VRS  |  Email |Print

As Narendra Modi gets ready to take over as Prime Minister, investors in the commodity market are a little worried over his views on futures trading.
The reason: in 2011, a Working Group on Consumer Affairs headed by Modi had recommended a ban on futures trading in essential commodities, to control prices. The Working Group was set up in April 2010 by the UPA Government to find ways to control inflation, which had breached the 11 per cent-mark………………………………………..Full Article: Source

Worried Indian investors hasten to sell out gold

Posted on 23 May 2014 by VRS  |  Email |Print

Indian investors are seen in a hurry to sell out their physical gold collection as Modi-led new government has eased gold import duties to boost the precious metal import which is likely to pull down gold prices significantly.
At present, the gold market has thronged with sellers rather than buyers. The anxious investors bring gold bars and coins that they purchased months ago, said Mr. Jitendra Kantilal Jain, proprietor of Jugraj Kantilal and Co., a large dealer in recycled gold in the western Indian city of Mumbai’s Zaveri Bazaar……………………………………..Full Article: Source

Geopolitical Changes Keeping Investors’ Interest in Gold

Posted on 22 May 2014 by VRS  |  Email |Print

According to the World Gold Council (WGC), the gold demand in Q1 2014 was 1,074 tonnes, three tonnes lower than in Q1 2013. Consumer demand, especially jewellery demand, has continued to drive gold demand. Central banks have net purchased 122 tonnes of gold, the 13th consecutive quarterly rise while ETP outflows have dropped to 0.2 tonnes for the quarter.
While the WGC described that the fundamentals and long-term demand trend have remained robust, the world largest gold-backed ETP, the SPDR Gold Trust, has just seen its lowest holdings since December 2008………………………………………Full Article: Source

Should you invest in gold now?

Posted on 22 May 2014 by VRS  |  Email |Print

The rally in the equity markets from August/September 2013 has seen the benchmark indices, the S&P Sensex and the CNX Nifty, move up by 35 per cent till now, with investor preference shifting to riskier assets such as equities.
In contrast, gold and silver, considered safe haven bets in uncertain times, lost 8.8 per cent and 20.4 per cent, respectively, during this period. Consumer demand (in monetary terms) for jewellery, gold bars and coins dipped 41 per cent in the first quarter of calendar year 2014 to $7,911 million. In physical terms, it was 26 per cent lower, at 190.3 tonnes………………………………………Full Article: Source

Gold: Global jewellery demand rises 3%, investment demand remains unchanged in Q1

Posted on 21 May 2014 by VRS  |  Email |Print

Gold demand for jewellery making rose 3% in Q1 2014 to 57 lt while total investment demnad was 282 tons compared to 288 tons in the same quarter previous year, according to World Gold Council.
WGC report shows a return to the long-term quarterly average demand trends established over the past five years.Following an exceptional year in 2013 gold demand in Q1 2014 was 1,074 tonnes (t), almost unchanged compared to the same period in 2013 - a clear demonstration that the fundamentals of the gold market remain robust…………………………………..Full Article: Source

Africa investors turn away from commodities

Posted on 20 May 2014 by VRS  |  Email |Print

Foreign investors pouring money into Africa are increasingly turning away from commodities-led projects to tap into the growing consumer market, while smaller, less-established countries are also getting a bigger lion’s share. In its annual report on Africa released last week, EY revealed the continent became the world’s second-most attractive investment destination in 2013, just behind North America. In addition, Africa’s share of global foreign direct investment (FDI) reached its highest level in a decade, at 5,7%, while capital investments grew by 12,9% in the same period.
But 2013 also saw some major shifts in investment trends on the continent. Mining and metals, for instance, are no longer the main beneficiaries of FDI and the list of the top 10 countries in FDI projects showed some surprising trends…………………………………….Full Article: Source

Investors Set To Pressure Oil Industry Over $1.1 Trillion Exposure To High-Cost Projects

Posted on 16 May 2014 by VRS  |  Email |Print

ExxonMobil’s publication of a report into its climate risks felt like a ground-breaking moment in the debate about carbon-stranded assets. Just a month later, another such moment has arrived, in the form of the latest report from Carbon Tracker, the campaign group that highlights the risks that climate change presents for investors.
The report says that energy companies have earmarked an estimated $1.1 trillion of capital expenditure for projects that can only make money if the oil price remains higher than $95 per barrel, while some are only viable at a price of $120-$150………………………………………..Full Article: Source

Wall Street banks count commodities trading profits

Posted on 15 May 2014 by VRS  |  Email |Print

While the world has been writing epitaphs for Wall Street banks’ commodity trading desks, Wall Street has been counting its ­profits. Banks that held firm amid an industry pullback from energy, metals and agricultural markets – and even some that beat a partial retreat – mined a rich seam as North America’s coldest winter in three decades drove up energy prices, results show.
Citigroup, Goldman Sachs, Morgan Stanley and Macquarie flagged commodities trading as a bright spot in first-quarter earnings. Coalition, a consultancy which tracks banks’ performance, estimates revenues for the top 10 banks in commodities rose 20 per cent year on year in the three months to March………………………………………..Full Article: Source

Is Now The Time To Buy Gold?

Posted on 15 May 2014 by VRS  |  Email |Print

Is the recent rebound in gold too good to be true? After falling hard in 2013 – posting a decline of 28% – the precious metal managed to claw its way upwards to revisit $1,300 an ounce. Many analysts began to believe that the yellow metal was about to rally. As such, funds like the iShares Gold Trust once again saw inflows.
But some big-name strategists are saying that investors shouldn’t be buying into the bling just yet. There are more declines and better prices around the corner. And when they hit, investors should be buying all they can………………………………………..Full Article: Source

Precious Metals Investing: Gold, Silver, Platinum, and Palladium

Posted on 15 May 2014 by VRS  |  Email |Print

The precious metals complex looks a little discombobulated lately, with each metal playing from a different page of sheet music. Gold, after hitting a six-month high of $1,391 mid-March, quickly lost over $100 in two weeks to below $1,280 by the start of April, and has been stuck in a sideways range since then.
Silver, after hitting a four-month high of $22.04 at the end of February, has been dropping ever since, losing more than 11% to its current $19.50………………………………………..Full Article: Source

Why you should short gold now: BofA technician

Posted on 14 May 2014 by VRS  |  Email |Print

Is it time to short gold? That’s the latest call from MacNeil Curry, head of global technical strategy at Bank of America Merrill Lynch, who says the yellow metal is poised to drop as much as 9 percent.
“First and foremost, we’ve been in a medium-term downtrend since peaking out back in March at about the $1,392 area. And price action since the beginning of April has done nothing to reverse that downtrend. All we’ve been doing is consolidating,” Curry said……………………………………….Full Article: Source

Cool commodities? Mining stocks back in vogue

Posted on 13 May 2014 by VRS  |  Email |Print

Bashed, beaten and unloved, mining stocks have fallen out of favor with investors in the last two years as commodity prices showed signs of peaking. But just when things could have turned from bad to worse it appears that the basic resources sector is the new contrarian play for 2014.
Nothing sums up the change in opinion better than JPMorgan’s assessment of the situation in a research note on Monday. Detailing a rebound in activity, the U.S. investment bank has stated it is now “overweight” on the mining sector, after being “underweight” for the last two years………………………………………..Full Article: Source

IEA says extra $44 tn needed for clean energy future

Posted on 13 May 2014 by VRS  |  Email |Print

The global cost of securing a clean energy future is rising by the year, the International Energy Agency (IEA) warned Monday, estimating that an additional $44 trillion of investment was needed to meet 2050 carbon reduction targets. Releasing its biennial “Energy Technology Perspectives” report in Seoul, the agency said electricity would increasingly power the world’s economies in the decades to come, rivalling oil as the dominant energy carrier.
Surging electricity demand posed serious challenges, said IEA executive director Maria van der Hoeven. “We must get it right, but we’re on the wrong path at the moment,” Van der Hoeven told reporters in the South Korean capital………………………………………..Full Article: Source

A Warning For Oil Investors: Is Carbon Riskier Than You Think?

Posted on 09 May 2014 by VRS  |  Email |Print

For oil executives there are few things more exciting than expensive, large-scale projects aimed at pumping more of the black gold. That doesn’t mean investors in oil majors should approve.
Large oil companies are betting up to $1.1 trillion on “high-risk” oil projects over the next decade, according to London-based think tank The Carbon Tracker Initiative. Investors, it says, should question the assumptions underpinning that spending………………………………………..Full Article: Source

Oil groups warned over spending on high-cost areas

Posted on 08 May 2014 by VRS  |  Email |Print

Oil companies with reserves in high-cost areas such as Canadian tar sands or deep water are at risk of committing too much capital to uneconomic projects, according to an environmental campaign group that works with investors to highlight the risks of climate change.
In a report to be published on Thursday, Carbon Tracker warned that policies to curb greenhouse gas emissions and improve energy efficiency would restrict future oil demand and prices, meaning that companies with high-cost production would find they could not earn acceptable returns on their investments………………………………………..Full Article: Source

Climate rules could put $1.1 trl in oil investment at risk

Posted on 08 May 2014 by VRS  |  Email |Print

Investors could spend up to $1.1 trillion over the next decade on oil projects and assets that never reach production if governments enforce measures to curb climate change, a report by Carbon Tracker Initiative said.
The Carbon Tracker report, released on Thursday, could help funds and other investors avoid putting their money in oil assets that remain buried forever. The $1.1 trillion, around 15 percent of the decade’s total global oil and gas spending at current rates, is earmarked for projects to 2025 that require a market price of at least $95 a barrel to break even………………………………………..Full Article: Source

Jim Rogers Wants a Chance to Buy Gold More Cheaply

Posted on 07 May 2014 by VRS  |  Email |Print

Jim Rogers: I’m very bad at market timing. I’m a very bad short-term trader, so I have absolutely no idea what is going to happen. I do own gold, but I have hedged some of my gold. I expect there will be another opportunity to buy gold sometime in the next year or two.
If that means gold is under $1,000, I hope I’m smart enough to buy. If it means gold is $1,600 because America and Iran end up going to war, I hope I’m smart enough to buy it. In my view, it’s more likely there will be another chance to buy gold lower than now, and that’s why I’ve hedged some of my gold, but I’m not selling………………………………………..Full Article: Source

How to Make an Income Through Gold

Posted on 06 May 2014 by VRS  |  Email |Print

One of the most common objections to an investment in gold is the fact that gold doesn’t pay a dividend. It just “sits there,” and because of this, it evokes the “greater fool” theory from skeptics — that “the only reason to buy gold is so that you can find another sucker to sell it to at a higher price.”
Nevertheless, since the beginning of the 21st century, gold has outperformed virtually all income-generating assets. The reason for this is that gold retains its value, while fiat currencies such as dollars and euros do not: Central banks can create as much of these currencies as they want to, and it doesn’t really matter how much dividend income you can generate if the currency you are being paid in is losing value………………………………………..Full Article: Source

Commodities comeback on the horizon

Posted on 05 May 2014 by VRS  |  Email |Print

Twelve months is a long time in investment. “2013 was a year when many investors may have questioned the role of certain asset classes, especially commodities,” says Nick Spencer, director of consulting at Russell Investments, after a year in which the Dow Jones-UBS commodity index lost 9.5 per cent but the Russell 3000 US equity index jumped 33 per cent.
So far this year the Dow Jones index has rebounded 9 per cent, and Hermes Fund Managers has declared the outlook for commodities to be its most propitious for a decade………………………………………..Full Article: Source

Hedge Funds Reduce Gold Bets to Lowest in 11 Weeks

Posted on 05 May 2014 by VRS  |  Email |Print

Speculators are the least bullish on gold in 2 1/2 months on mounting confidence that U.S. economic growth is accelerating out of its winter retreat.
Money managers cut their net-long position in bullion to the smallest since mid-February during the week ended April 29. Wagers tumbled 25 percent last month, the most since November, and investors cut their holdings in exchange-traded products backed by the metal to the lowest since 2009………………………………………..Full Article: Source

Be glad you didn’t buy gold and silver in 2012

Posted on 05 May 2014 by VRS  |  Email |Print

If you watched much cable television in 2011 and 2012 you couldn’t help but be bombarded by all those commercials urging you to buy gold and silver. The pitch was bolstered by scary economic headlines. The dollar was falling. Congress was one big partisan gridlock and the not-so-subtle message of these ads was you’d better buy now before the whole house of cards collapses.
It would have been easy to be tempted. The price of both precious metals was rapidly rising. At the beginning of 2011 the price of gold stood at $1,405 an ounce. The following September it peaked at over $1,900………………………………………..Full Article: Source

Are commodities a good long-term investment?

Posted on 02 May 2014 by VRS  |  Email |Print

Since the beginning of this year, commodities have performed remarkably well. For example, while the S&P 500 has gained 2%, the Dow Jones Commodity index has gained 10%. Why have commodity values increased? Well, it is due to a number of reasons that include more positive news regarding the global economy, international political concerns, and extreme weather conditions.
Which Commodities are Currently Increasing in Price? Two commodities that have done particularly well are coffee and nickel with increases of over 15% in the past month alone. Coffee is up in price mainly due to the dry weather Brazil is experiencing, and nickel is mainly up in price due to the mineral ore export ban Indonesia imposed in January. However, as the economies in China, Europe, and the US improve, most base metals have benefited from the more positive economic news………………………………………..Full Article: Source

Secretive Swiss commodities giants are buying big chunks of US energy

Posted on 02 May 2014 by VRS  |  Email |Print

Some of the world’s biggest commodities traders are buying up key pieces of the infrastructure that’s driving the US energy production boom. Secretive commodities investors like Vitol Group, Trafigura Beheer B.V. and Mercuria Energy Group are among the firms amassing physical assets like shale oil wells, oil and gas pipelines and offshore drilling projects in the US, Bloomberg reports.
Why? The controversial fracking boom, which has driven US energy production sharply higher in recent years. Commodities firms want to get a piece of that production. They also see opportunities for arbitrage—that is profiting from price discrepancies—in the sometimes inefficient US oil and gas transport system………………………………………..Full Article: Source

Commodities favoured in portfolio rotation

Posted on 30 April 2014 by VRS  |  Email |Print

After several years of poor performance investors are warming to commodities. Helped by the return of volatility, strong returns and declining correlations with other asset classes, money has started to trickle back into the sector.
After a record $50bn of net redemptions in 2013, total inflows into passive index tracking and commodity-linked exchange traded funds this year have so far totalled just over $6bn, according to research by Citigroup. Agriculture, energy and bullion funds have led the way………………………………………..Full Article: Source

Investing in South America – Watch out for falling copper prices

Posted on 30 April 2014 by VRS  |  Email |Print

To say the least, 2014 has proven to be a difficult year for copper bulls. The metal has been drastically underperforming the major indexes such as the Dow Jones Industrial Average and the S&P 500. In addition the performance has also been lagging gold and silver.
Unfortunately, news from this past week isn’t providing much comfort and it appears that the pressure will continue to be to the downside over the short-term. From a trader’s perspective, the strategic move will be to take this underperformance and examine the influence that it is having on copper exporting nations such as Peru and Chile………………………………………..Full Article: Source

Commodities: To buy or not to buy?

Posted on 28 April 2014 by VRS  |  Email |Print

Commodity prices are on the rise, as gold, corn and other basic materials climb back from steep declines—and outpace U.S. stocks. The rebound may stir hopes that a longer-term boom has resumed after three rough years for natural resources, and a measured bet could pay off.
But for ordinary investors, commodities often are a raw deal. They should take a hard look before loading up. First, weigh whether you need the exposure. Perhaps the main reason investors hold commodities is to hedge against inflation. But inflation remains muted in the U.S………………………………………..Full Article: Source

Commodities: A better long-term bet?

Posted on 28 April 2014 by VRS  |  Email |Print

For longer-term investors, equity markets have generally remained the risk asset class of choice. However, with equities around the world now finding it hard to continue the bullish momentum of the last few years, investors are now looking to alternative markets to diversify risk, and for potentially better returns.
One such is commodities, which has performed well since the start of the year, with the Dow Jones Commodity index currently up 10%, compared with to just 2% for the S&P 500. In addition, and perhaps more significantly, many of the traditional correlations between equities, bonds, commodities and currencies, and in particular the risk-on-risk-off relationships, have all broken down as the financial markets continue to be distorted by quantitative easing………………………………………..Full Article: Source

Investors starting to look at commodities again

Posted on 25 April 2014 by VRS  |  Email |Print

After several tough years, investors are once again starting to warm to commodities. That is the view of one of the sector’s most successful hedge fund managers. According to Pierre Andurand, “smart investors” are growing concerned about their exposure to equities and are looking to place contrarian bets in other asset classes such as commodities.
“We feel sentiment is turning. Pension funds are coming to us and saying they want to invest in commodities while others aren’t looking,” says Mr Andurand, whose eponymous hedge fund returned almost 25 per cent last year………………………………………..Full Article: Source

Commodity investors brace for El Niño

Posted on 25 April 2014 by VRS  |  Email |Print

Commodities investors are bracing themselves for the ever-growing possibility for the occurrence of a weather phenomenon known as El Niño by mid-year which threatens to play havoc with commodities markets ranging from cocoa to zinc.
The El Niño phenomenon, which tends to occur every 3-6 years, is associated with above-average water temperatures in the central and eastern Pacific and can, in its worst form, bring drought to West Africa (the world’s largest cocoa producing region), less rainfall to India during its vital Monsoon season and drier conditions for the cultivation of crops in Australia………………………………………..Full Article: Source

Indecent exposure [to commodities]

Posted on 25 April 2014 by VRS  |  Email |Print

Before there were alternative investments (”alts”) or hedge funds, having some exposure to commodities, served as a good way to diversify a portfolio against stock market volatility. Historical correlations to the stock market are rather low, or at least sporadic, and owning commodities can also be seen as a hedge against inflation (higher costs of raw goods).
However, since the price of crude oil cratered from $150 per barrel all the way down to $40 back in 2008, the commodities asset class as a whole has been more or less shunned. Despite the price of oil having somewhat recovered — it currently trades around $100 — now might be a good time to un-shun………………………………………..Full Article: Source

Investors exit ETFs as commodities seen fading

Posted on 25 April 2014 by VRS  |  Email |Print

Canadian investors are pulling money out of exchange-traded funds for a second year as concern grows that a rally in energy and mining that helped drive equities to the best performance among the world’s largest markets has run its course.
So far in 2014, investors have withdrawn $682.5 million from exchange-traded funds tracking Canadian shares, following an outflow of $820.8 million last year, according to data compiled by Bloomberg. The benchmark Standard & Poor’s/TSX Composite Index (SPTSX) is in its 10th month of gains, the longest winning streak since 1983, and has soared 20 percent in the past year. The gauge rose 0.2 percent to 14,557.27 at 10:55 a.m. in Toronto………………………………………..Full Article: Source

Canadians are dumping ETFs on commodity doubts

Posted on 25 April 2014 by VRS  |  Email |Print

Canadian investors are pulling money out of exchange-traded funds for a second year as concern grows that a rally in energy and mining that helped drive equities to the best performance among the world’s largest markets has run its course.
So far in 2014, investors have withdrawn $682.5 million from exchange-traded funds tracking Canadian shares, following an outflow of $820.8 million last year, according to data compiled by Bloomberg………………………………………..Full Article: Source

How to protect your portfolio from rising geopolitical risk

Posted on 24 April 2014 by VRS  |  Email |Print

Investors should buy into the energy sector to protect their portfolios from rising levels of geopolitical risk, according to Russ Koesterich, global chief investment strategist at BlackRock. Data from FE Analytics shows that specialist energy funds have done very well so far this year, with an uptick in performance in recent weeks as the Ukraine crisis has escalated.
Koesterich says he expects the outperformance to continue, and suggests overweighting the sector. “We are advocating an allocation to energy stocks, which have outperformed the broader market year-to-date,” he said………………………………………..Full Article: Source

Is this the best contrarian strategy for precious metals investors?

Posted on 23 April 2014 by VRS  |  Email |Print

Often, the word “contrarian” equates to investors attempting to catch a falling knife. You don’t need to look like a used butcher’s block for contrarian strategies to pay off in the long run, however.
Recently, the precious metals markets have been consolidating following a severe decline from all-time highs. If you believe that they will someday regain popularity following another economic decline, political debacle, above average inflation, or other crisis, however, then join the club………………………………………..Full Article: Source

Should your portfolio own commodities?

Posted on 22 April 2014 by VRS  |  Email |Print

Should your investment portfolio have exposure to commodities? The problem with commodities is that most of us don’t have storage space in the garage for a herd of cattle or pork bellies. And even if we did, it still wouldn’t give us diversified exposure to other important commodity sectors like agriculture, energy and metals.
It’s true commodities have significantly lagged the performance of U.S. stocks over the past several years. But that doesn’t diminish their importance………………………………………..Full Article: Source

Time to rethink your commodity investment strategy, says Citi

Posted on 16 April 2014 by VRS  |  Email |Print

It is time to take commodities seriously as an investment, and in particular a portfolio diversifier, according the strategists at Citi. They point out metals, hydrocarbons and basic foodstuffs have outperformed equities and bonds over the past quarter.
Citi’s team expects that trend to continue into the second three months of the current year. And its analysts go as far as to suggest the historic relationship between stocks, government debt and commodities has returned to a normal pattern. The negative correlation between equities and commodities, made the latter and ideal ‘diversifier’ in a balanced portfolio………………………………………..Full Article: Source

China underinvestment affects commodities in South Africa

Posted on 16 April 2014 by VRS  |  Email |Print

A long-term investment in South African commodities — especially gold — is expected to produce a sizable payoff, according to a CCTV Africa report. Standard Bank Commodities Analyst, Walter De Wet, expects that prices will continue to rise as stocks mature and production heightens. More importantly, with the increased investment of China, commodities in Africa — and on a global scale — will edge toward stability.
“We think that China is underinvested in this metal. We do think the physical demand from west to eats will continue. Once the U.S. market is normalized and stabilized, we do think that gold will continue to grind higher,” De Wet said. ”We think long-term price for gold is closer to $1,500 than $1,100.” ……………………………………….Full Article: Source

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