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Commodities Briefing - Category | Performance more

The Commodities Crash: A Supply-Side Perspective

Posted on 14 January 2016 by VRS  |  Email |Print

2015 was brutal for commodities. Even worse, they took another plunge at the start of 2016. The Bloomberg Commodity Index, which covers a wide range of natural resources, dropped to its lowest level since June 1999. The collapse in commodity prices happened across the board, from crude oil to iron ore, coal, and industrial metals.
Unfortunately, there is little sign of stability or recovery: Oil and iron ore prices dipped even further in December. As a result, mining stocks took a beating, and ratings on mining bonds were downgraded. Weakening demand from China receives most of the blame for the tumbling prices. China was the main driving force behind the rising commodity prices, its fixed-asset investment growing at an average of 25% from 2003 to 2011………………………………………..Full Article: Source

Commodity Returns Fall to Lowest Since at Least 1991 on Oil Rout

Posted on 13 January 2016 by VRS  |  Email |Print

A gauge of returns on raw materials tumbled to the lowest since at least 1991, extending the agony that producers of energy, industrial metals and agricultural commodities faced in 2015. The Bloomberg Commodity Index, a measure of returns from 22 raw materials, fell as much as 1.5 percent to 74.02 on Tuesday.
A roundup of the bearish numbers: Crude oil in New York dipped below $30 a barrel, copper fell to less than $2 a pound and natural gas as low as $2.24 per million British thermal units. The expansion of the global economy has faltered, supplies of everything from oil to copper to grains are ample and a stronger dollar has eroded the appeal of raw materials as alternative investments………………………………………..Full Article: Source

Commodity depression: $1.4trn lost since 2011. M&A the answer?

Posted on 13 January 2016 by VRS  |  Email |Print

The mining sector has been decimated over the past few years with the Bloomberg article below putting the stock losses at $1.4 trillion since 2011. Many investors would see this as a opportunity and the article looks at potential M&A activity for a revival within the sector.
The current scenario sees two classic investment quotes go head to head. On the one hand, as Baron Rothschild was quoted in the 18th century: “Buy when there’s blood in the streets, even if the blood is your own.” And while iconic current day guru Warren Buffett agrees with the concept he doesn’t believe in the commodity space………………………………………..Full Article: Source

Hedge funds post worst annual return since 2011

Posted on 13 January 2016 by VRS  |  Email |Print

Hedge funds in 2015 posted their lowest annual return for four years amid heightened volatility and a weak market, industry data tracker Eurekahedge said on Tuesday. The Eurekahedge Hedge Fund Index fell 0.58 percent in December while the MSCI World Index declined 2.23 percent, Eurekahedge said, giving hedge funds an average annual performance of 1.56 percent.
“Returns across hedge fund strategic mandates were disappointing during December with most finishing the month in negative territory,” Eurekahedge said. “In particular, long positions into European equities suffered losses as ECB’s early December meeting proved to be a disappointment for investors leading to a slump in European equities,” it said………………………………………..Full Article: Source

Commodity Funds Fall Short, Study Says

Posted on 12 January 2016 by VRS  |  Email |Print

Sobering news for investors in specialty-commodity mutual funds: On average, they fall short on key measures, new research has found. “These categories of funds have not been able to consistently create positive net alphas for their investors over longer time periods,” the report states. Alpha is a measure of the value fund managers add to the investment process when adjusted for risk factors such as volatility.
The funds’ high expenses are often to blame, according to the report by Srinidhi Kanuri at the University of Southern Mississippi, Robert McLeod at the University of Alabama and Davinder Malhotra at Philadelphia University………………………………………..Full Article: Source

Oil options lurch closer to $20 Goldman doomsday forecast

Posted on 08 January 2016 by VRS  |  Email |Print

When U.S. investment bank Goldman Sachs said last year that oil could fall as low as $20 per barrel, it assigned a fairly low probability to that scenario. Fast-forward five months and in some parts of the world the forecast has already proved correct. Canadian physical crude has been selling this week at below $20 per barrel, less than it costs to extract and transport.
Traders in the options market, meanwhile, are taking protection against prices falling below $25. The developments reflect growing concerns that a market already awash in too much oil is now suffering the double-whammy of a sharp slowdown in U.S. and Chinese demand………………………………………..Full Article: Source

Low commodities make for an ugly year for emerging markets

Posted on 05 January 2016 by VRS  |  Email |Print

If you live in the West, this year will bring not only the best economic growth since the financial crash, but also a welcome increase in real income for consumers created by lower commodity prices, particularly oil. However, for the emerging economies that produce the commodities, the opposite is true. The past year was a terrible one for them, and this year promises to be even worse. Economic divergence between the rich and poor countries has never been greater.
The European economies should stage something of a recovery, according to the consensus of economic forecasters, driven by the north, notably Germany – although Britain, the EU’s No 2 economy, should still lead the way at 2.3 per cent. Not that……………………………………….Full Article: Source

Oil, commodities worst performers of 2015

Posted on 04 January 2016 by VRS  |  Email |Print

Oil and commodities were the world’s worst-performing asset class for the second year running in 2015. Among currencies, the U.S. dollar was the clear standout. Oil and commodities were the world’s worst-performing asset class for the second year running in 2015, pressured by China’s economic slowdown and excess supply.
Brent crude looked set for a loss of around 36 per cent for the year as sustained selling pushed prices near 11-year lows, and the outlook for oil prices looks bleak for 2016. The Thomson Reuters CRB commodities index fell 24 per cent to six-year lows………………………………………..Full Article: Source

Uranium: The top-performing mining commodity of 2015

Posted on 30 December 2015 by VRS  |  Email |Print

Despise missing expectations for the year, uranium —the radioactive material used as fuel for power-generation plants— has emerged as the best-performing mining commodity of 2015. Spot uranium prices last traded at $35.80 per pound, less than the expected $40 per pound expected, but on track for gains of 0.85% since starting the year at $35.50/lb, according to Australian investment bank, Macquarie.
The metal that powers nuclear reactors has been gradually recovering from a sharp decline in the wake of Japan’s Fukushima disaster in 2011, and analysts expect the commodity to continue putting a smile on investors’ faces next year, as prices are set to keep climbing………………………………………..Full Article: Source

Commodities’ cycle upsets investor returns

Posted on 29 December 2015 by VRS  |  Email |Print

If one of your new year’s resolutions in 2015 was to invest in a FTSE 100 tracker, you may be ruing the day you did so. With the end of the year upon us, the global resources rout has dragged the index down by more than 7 per cent since January (though an average dividend yield of 4 per cent provides some consolation).
The big question is whether the oil companies and mining stocks that have dug passive investors into a deep hole can climb out of it next year — but few are willing to predict a happy ending in the short term. The table of the FTSE 100’s biggest losers is dominated by the miners. Topped by Anglo American — down 75 per cent this year as the collapse in the iron ore price caused its dividend payments to cave in — Glencore, BHP Billiton and Antofagasta make up four of the worst five performing stocks, with Rio Tinto languishing at number seven………………………………………..Full Article: Source

Tumbling commodities prices shake index

Posted on 21 December 2015 by VRS  |  Email |Print

The commodity rout is approaching an ugly new milestone, with losses across more members of a leading benchmark than in any year since the financial crisis. All but one of the 22 futures contracts in the Bloomberg Commodity Index are now lower in the year to date, with negative returns ranging from minus 6 per cent for sugar to a staggering 50 per cent plunge for natural gas. The last year so many constituents fell was 2008.
Down 26 per cent in the year to last Friday, the index is headed for the worst of five straight years of declines. The breadth of the washout across a varied basket of commodities highlights how pain has spread for producers from grain farmers to commodity exporting nations such as Brazil and Saudi Arabia………………………………………..Full Article: Source

Argentina’s currency is crashing by 30%

Posted on 18 December 2015 by VRS  |  Email |Print

Argentina’s currency just plunged by 30%. But don’t panic. It’s all part of new President Mauricio Macri’s larger plan to revive the country’s troubled economy and encourage international trade. Argentina’s newly installed government announced Wednesday that it was removing strict currency controls that had been in place for the past four years under former president Cristina Fernandez de Kirchner.
That means the currency will no longer be pegged to a level around 9.8 pesos per U.S. dollar. It was trading around 14 pesos per dollar early Thursday, a level previously seen only in the black market………………………………………..Full Article: Source

Hedge Funds Burned by Commodities Lose $40 Billion Since ‘08

Posted on 15 December 2015 by VRS  |  Email |Print

The biggest commodities meltdown in a generation has cost hedge funds more than $40 billion in seven years. Losses due to poor performance and investor withdrawals have left assets at the top 10 commodities hedge funds at less than $10 billion, compared with more than $50 billion in 2008, according to estimates from Trafigura Pte Ltd.’s annual report.
The trader and asset manager said the perception of commodities as an investable asset has been replaced by a “generalized aversion.” “Commodities as an asset class are not as attractive as before and we are seeing the consequences on our asset management division,” ……………………………………….Full Article: Source

Gold/Silver Ratio Jumps Near 6-Year High

Posted on 15 December 2015 by VRS  |  Email |Print

Silver prices hit new 6-year lows in London trade Monday, dropping to $13.65 per ounce and falling near 2009 lows against steadier gold prices as industrial commodities sank and Western stock markets fell again ahead of this week’s decision on Dollar interest rates from the US Federal Reserve.
With gold bullion trading above $1070 per ounce mid-afternoon, the Gold/Silver Ratio of relative prices rose above 77.7 – a multi-decade high when seen during the oil price crash of the mid-1980s. “The aftermath [of the Fed's rate hike] has already begun,” says a credit markets note from French investment and bullion bank Natixis………………………………………..Full Article: Source

Commodity index falls to lowest since June 1999

Posted on 08 December 2015 by VRS  |  Email |Print

Commodity prices are trading at their lowest levels since June 1999, according to a 22-member index compiled by Bloomberg. The Bloomberg Commodity Index, which tracks everything from lean hog and coffee futures to natural gas, fell 2.1 per cent on Monday to 79.97, breaching the 80 level for the first time in more than 16 years.
The 2.1 per cent fall is also the biggest daily decline for the index since September 1. Commodity prices are weakening across the board as the US dollar - the reserve currency for purchasing most commodities - continues to rise, while demand from China wanes and output among major commodity producers fails to slow down………………………………………..Full Article: Source

Nikkei Commodity Indexes paint gloomy picture

Posted on 03 December 2015 by VRS  |  Email |Print

The Nikkei Commodity Indexes in November saw their biggest year-on-year declines since the autumn of 2009, when the global economy was still suffering from the collapse of U.S. investment bank Lehman Brothers a year earlier. The sharp downturn is casting a dark shadow over the global economy.
The Nikkei provides two commodity indexes. One tracks wholesale prices of 42 major materials — including crude oil, metals and foodstuffs — sensitive to economic trends; the other follows 17. Monitoring year-on-year changes in the readings allows for better global economic forecasts………………………………………..Full Article: Source

In Rubble of Commodity Super-Cycle, Citigroup Picks Winners

Posted on 02 December 2015 by VRS  |  Email |Print

There’s still money to be made from investing in commodities, according to Citigroup Inc. While a rising U.S. dollar, sustained oversupply and slowing growth in emerging markets including China are still hurdles to a recovery, many markets may strengthen in the second half of next year as the collapse in prices shrinks production, the bank said in a report.
Citigroup also forecasts “a more persistent price recovery by 2017 for oil and base metals, and possibly agriculture.” The bank predicts the start of a recovery in some raw materials as returns from commodities head for a fifth annual drop amid the slowest growth since 1990 in China and the prospect of a stronger dollar if U.S. interest rates increase………………………………………..Full Article: Source

Commodities’ November nightmare

Posted on 01 December 2015 by VRS  |  Email |Print

Goldman Sachs created the GSCI commodity index back in 1991, with the intention of getting asset managers to use it as a benchmark for commodity investment, but also as an improved way of measuring inflation. Specifically, the index was pitched as a better measure than that being provided by Commodity Research Bureau’s (CRB) futures index, because it included a mix of products that Goldman said better reflected real inflation.
In support of the countercyclical diversification case, back-tested returns from 1970-1990 showed the GSCI was negatively correlated with the S&P 500 and government bonds, meaning a basket of GSCI commodities could improve annual returns for investors………………………………………..Full Article: Source

Commodities slump casts a pall over UK dividend growth

Posted on 19 October 2015 by VRS  |  Email |Print

Dividend growth from London-listed companies is set to slow sharply in 2016 as the commodities sell-off hits payouts. Total dividends paid by companies listed on the main market are set to grow by 3 per cent in 2016, down from a 6.8 per cent projected increase in 2015, says a report by Capita Asset Services.
The gloomier prospects follow a peak in the second quarter, when total dividends reached their highest levels since before the 2008 financial crisis. But that picture has since been marred by dividend cuts at Glencore, the heavily indebted FTSE 100 metals and mining group, and Standard Chartered, the emerging markets focused bank………………………………………..Full Article: Source

Europe Banks’ Profit Outlook Dims on Commodities, Berenberg Says

Posted on 02 October 2015 by VRS  |  Email |Print

European banking profitability is set to worsen as falling commodity values weaken loan books and central bank actions from China to the U.S. cause economic uncertainty, according to analysts at Berenberg Bank.
“Developments in commodity markets matter for banks, given what they tell us about economic growth and the implications for asset quality,” Berenberg analysts Nick Anderson and James Chappell said in an note dated Sept. 29. “The financialization of commodities (their widespread use as collateral) underpins asset-quality concerns.”……………………………………….Full Article: Source

Oil suffers a loss of 24% for the quarter

Posted on 01 October 2015 by VRS  |  Email |Print

Oil futures tallied a loss of 24% for the third quarter, after ending Wednesday lower on the back of a report revealing the first U.S. crude-supply increase in three weeks. The report also showed a modest decline in domestic production, helping prices limit losses for the session.
November West Texas Intermediate crude settled at $45.09 a barrel, down 14 cents, or 0.3%, on the New York Mercantile Exchange, trading between a high of $45.85 and a low of $44.68, according to FactSet data. WTI prices, based the front-month contracts, lost 8.4% for the month and were 24% lower for the quarter. Year to date, they’re down by more than 15%………………………………………..Full Article: Source

Gold suffers biggest quarterly loss in a year on Fed outlook

Posted on 01 October 2015 by VRS  |  Email |Print

Gold hit its lowest level in two weeks and recorded its biggest quarterly loss in a year on Wednesday as U.S. jobs data came in stronger than expected and the market awaited clarity on the timing of a hotly anticipated U.S. interest rate rise.
That capped off gold’s worst quarter since the third quarter of 2014, having fallen nearly 5 percent since July. It was its fifth successive quarter of losses, the longest such streak since 1997………………………………………..Full Article: Source

Short bets on suffering commodities netting major returns in meltdown

Posted on 21 September 2015 by VRS  |  Email |Print

The biggest collapse in commodity prices in a generation is giving some investors the best returns of any asset class. Over the past 12 months, eight of the 10 best-performing U.S. exchange-traded funds were securities that benefited from declines in raw-material prices, with five more than doubling their money, according to data tracked by Bloomberg on more than 1,600 ETFs across asset classes, including equities, fixed income and mixed allocation.
With commodity prices languishing near a 16-year low because of excess supplies, money has been flowing out of funds linked to metals, crops and energy. But for the investors that took on more risk with leveraged short bets, the payoff has been big. The VelocityShares Daily 3x Inverse Crude ETN, by far the top gainer, surged 241 per cent over the 12 months through Wednesday as oil prices tumbled 50 per cent in New York………………………………………..Full Article: Source

Hedge funds soar on China slowdown

Posted on 21 September 2015 by VRS  |  Email |Print

As hedge fund managers take a beating from the slowdown in China, Ray Bakhramov is flying. The chief investment officer of Forum Asset Management said he had been betting on an emerging-market slump since 2012. His conviction led to three years of losses of 10 per cent to 20 per cent in his Global Opportunity Fund.
Bakhramov finally got his wish in the past two months, as did a handful of managers who made multi-year wagers that emerging-market stocks and currencies would begin to fall, starting with a downturn in China………………………………………..Full Article: Source

Major banks’ commodities revenue down 25 pct in first half-report

Posted on 09 September 2015 by VRS  |  Email |Print

Global commodities-related revenue at the top 10 investment banks tumbled by a quarter in the first half of the year, due to a retreat in business from the power and gas sectors after last year’s surge, a consultancy said on Tuesday. Revenue earned by leading banks from commodity trading, selling derivatives to investors and other activities in the sector fell to $2.6 billion from $3.5 billion in the same period of 2014, financial industry analytics firm Coalition said.
“Despite increased volatility in oil prices and better corporate activity, commodities revenues declined due to (the) absence of prior-year gains from the unusually cold winter,” Coalition said………………………………………..Full Article: Source

Spain Is Winner From Oil, Commodities Plunge, De Guindos Says

Posted on 04 September 2015 by VRS  |  Email |Print

Spain’s economy minister says his country is a winner from the plunge in oil prices and is well insulated from the Chinese slowdown that’s partly driving the decline. In a Bloomberg Television interview in Madrid, Luis de Guindos said lower energy costs for consumers and companies are helping to drive an acceleration in Spain’s expansion this year.
The economy grew 1 percent in the second quarter, more than three times the euro-area average. “We import the majority of the commodities, especially in the case of energy,” de Guindos said in the interview in Madrid on Wednesday. “So for Spain it’s a gain-gain situation.”……………………………………….Full Article: Source

Commodities: Winners, Losers

Posted on 02 September 2015 by VRS  |  Email |Print

Commodities have been in a bear market for the past seven years. In the past several months, the downturn has accelerated significantly. This produces losers, but also winners, namely the developed world. Three of the largest economic areas of the globe, Europe, Japan and the U.S., receive a net benefit from lower commodity prices.
Low oil and other raw materials prices, which affect consumers and manufacturers alike, are the equivalent of a massive tax reduction on consumers and corporations. This holiday won’t last forever, though: Low commodity prices will eventually curtail commodity supply and pricing will turn back up………………………………………..Full Article: Source

Commodities face a severe price downturn, recovery not anytime soon

Posted on 25 August 2015 by VRS  |  Email |Print

The metal index may have corrected 50% in the past one year and metal stocks may appear good value-buys, but given the structural negatives of a slowing China and a strong dollar, it may not be too long before the long-term bearish trend reasserts itself.
According to a recent Barclays report, this is a much more severe commodity price downturn than any the market has experienced in recent history. The Chinese demand across metal commodities is likely to drop to 2-3% from double digits for the next 5 years and China consumes 40-50% of most of these commodities produced globally. The Bloomberg commodity index is back at 2002 levels, eroding almost all the gains of the commodity super cycle………………………………………..Full Article: Source

Global ETF Assets Surpassed Global Hedge Fund Assets In Q2 of 2015

Posted on 24 July 2015 by VRS  |  Email |Print

Assets invested in the global ETF/ETP industry have surpassed the assets invested in the hedge fund industry at the end of Q2 as we had forecasted.
According to our analysis there was US$2.971 trillion invested in the 5,823 ETFs/ETPs listed globally at the end of Q2 2015, assets were down slightly from their record high of US$3.015 trillion at the end of May 2015, while assets in the global hedge fund industry, according to a new report published by Hedge Fund Research HFR, reached a new record high of US$2.969 trillion invested in 8,497 hedge funds, which is US$2 billion smaller than the assets in the global ETF/ETP industry………………………………………..Full Article: Source

These are the top-performing commodities of 2015

Posted on 22 July 2015 by VRS  |  Email |Print

Can we really be halfway through the year? That’s what my calendar tells me, which means it’s time for the 2015 commodities halftime report. The periodic table of commodity returns, consistently one of our most popular pieces, has been updated to reflect the first half of 2015.
As an asset class, commodities continue to be a challenging space for investors, as they’ve faced many headwinds lately including lackluster purchasing managers’ index (PMI) numbers and a strong U.S. dollar. The widest expansion this year was made by none other than crude oil, the worst-performing commodity of 2014. As of June 30, oil posted gains of over 11 percent, rising to $59.47 per barrel………………………………………..Full Article: Source

Hedge funds post best returns in years

Posted on 17 July 2015 by VRS  |  Email |Print

Global hedge funds reached the halfway mark in 2015 with some of their best returns in years, but performance cooled off in June from growing losses in Asia Pacific and Europe, according to the latest statistics from Preqin, a research firm focused on the alternative assets industry.
“The industry has had a run of five months of positive returns from the start of 2015, and surpassed full-year 2014 performance in May,” said Amy Bensted, Preqin’s head of hedge fund products.”However, various macroeconomic events, notably the Greece/Eurozone crisis and the turbulence experienced in the China stock market, has led to hedge funds failing to generate positive returns in June and has dented the year-to-date return of the sector.”……………………………………….Full Article: Source

Big losses for precious metals

Posted on 09 July 2015 by VRS  |  Email |Print

Gold at lowest level in three and half months. Bullion metals registered big losses at Comex on Tuesday, 07 July 2015. Gold lost more than $20 an ounce on Tuesday, as sharp gains in the U.S. dollar helped send futures to the lowest finish since mid-March. Other metals also took a hit, with silver leading the losses as concerns over China’s economic growth pressured prospects for metals demand.
Gold for August delivery on Comex fell $20.60, or 1.8%, to settle at $1,152.60 an ounce. September silver sank 78.4 cents, or 5%, to settle at $14.69 an ounce, with prices tracking the most-active contracts at their lowest settlement since August 2009………………………………………..Full Article: Source

Tin ‘worst performer among base metals’ in H1 – Triland

Posted on 07 July 2015 by VRS  |  Email |Print

Tin has been “the worst performer among the base metals” on the London Metal Exchange in the first half of this year, according to brokerage Triland’s quarterly metals report. The category I LME member has therefore revised its 2015 price forecast to an average of $16,000-19,000 per tonne, down from $18,000-21,000 per tonne previously.
“Towards the end of the second quarter, prices were trading at the lowest level since September 2009, and real support has yet to be found,” Triland said in the report. Tin shipped out of Indonesia dropped year-on-year in May, and year-to-date exports were down 6.6% to 31,019 tonnes. ……………………………………….Full Article: Source

India: Commodity Exchanges’ Turnover Up 17% in April-May

Posted on 15 June 2015 by VRS  |  Email |Print

Commodity exchanges’ total turnover rose 16.63 per cent to Rs 11.11 lakh crore in the first two months of the current fiscal year on account of higher trade volumes in energy and agri-commodities, according to the Forward Markets Commission (FMC).
These exchanges had done business worth Rs 9.52 lakh crore in the April-May period of last fiscal year (2014-15), commodity market regulator FMC said in a report. The maximum volumes were generated in energy items like crude oil, followed by agricultural and metals………………………………………..Full Article: Source

World oil demand jumps after price slump

Posted on 12 June 2015 by VRS  |  Email |Print

World oil demand will rise much more than expected this year, the International Energy Agency (IEA) said on Thursday, in the latest sign that the collapse in oil prices is helping to boost fuel use. The agency, in a monthly report, raised its forecast for global oil demand growth in 2015 by 280,000 barrels per day (bpd) to 1.40 million bpd, bringing demand this year to almost 94 million bpd.
“Recent oil market strength of course partly stems from unexpectedly strong global oil demand growth,” said the Paris-based IEA, which advises industrialised nations on energy policy. Oil prices have recovered this year after hitting a near six-year low close to $45 a barrel in January………………………………………..Full Article: Source

Gold mining contributed $171 bln to global economy in 2013 – WGC

Posted on 04 June 2015 by VRS  |  Email |Print

The gold mining industry contributed more than $171 billion to the global economy in 2013, according to a new report from the World Gold Council. But weaker prices and lower production in 2015 do not necessarily mean that this figure will drop, the WGC’s John Mulligan said in an interview.
Large-scale commercial gold mining in the 47 countries that account for more than 90 percent of the world’s production contributed $81 billion to the economy in direct gross value added (GVA) and around $171 billion indirectly, the WGC said. GVA measures the contribution to the economy of each individual producer, industry or sector………………………………………..Full Article: Source

Major banks’ commodities revenue down 28 pct in Q1 -report

Posted on 21 May 2015 by VRS  |  Email |Print

Commodities revenue at the top 10 investment banks slid by 28 percent in the first quarter after power and gas activity returned to normal levels after last year’s jump, a consultancy said on Wednesday.
Revenue earned by leading banks from commodity trading, selling derivatives to investors and other activities in the sector declined to $1.6 billion in the first three months of the year compared to the same period of 2014, London-based financial industry analytics firm Coalition said. “Revenues declined due to the absence of one-off gains in power and gas. This weakness was partially offset by an increase in oil trading results,” Coalition said………………………………………..Full Article: Source

Iron Ore Trade Boom Shows China Bid for Commodities Clout

Posted on 08 May 2015 by VRS  |  Email |Print

China’s bid for greater influence over commodity prices is intensifying as record trade in its iron ore futures dwarfs its nearest rivals. Derivatives volumes on the Dalian Commodity Exchange more than doubled to 18.6 million contracts last month, or 1.86 billion metric tons, bourse data show.
Trading in contracts on the Singapore Exchange Ltd. totaled 78.2 million tons. UBS Group AG forecasts global demand at 2.04 billion tons in 2015. The world’s biggest consumer of metals, energy and grains is seeking to tighten its grip over prices with its own contracts for raw materials from tin to coal………………………………………..Full Article: Source

Shale Giants See Growth Again After 40% Price Climb

Posted on 06 May 2015 by VRS  |  Email |Print

EOG Resources Inc. and Pioneer Natural Resources Co., two of the largest shale-oil producers, are preparing to boost drilling again after oil prices climbed 40 percent in the past seven weeks. EOG Chairman and Chief Executive Officer William Thomas said Tuesday his company will increase drilling as soon as oil prices, which closed above $60 a barrel for the first time this year, stabilize at $65. Pioneer is planning to add drilling rigs starting in July, subject to oil price movements and the sale of other assets.
New drilling now means the companies can add to production in 2016. The statements come a month before the Organization of Petroleum Exporting Countries is scheduled to meet to discuss supply quotas………………………………………..Full Article: Source

Oil market climbs on Iran reports

Posted on 29 April 2015 by VRS  |  Email |Print

Oil prices have risen, reversing earlier losses on confusion surrounding reports that Iran had taken control of a container ship in the strategic Strait of Hormuz, dealers say. New York’s benchmark West Texas Intermediate for June delivery added US2c to $US57.02 a barrel.
London’s Brent North Sea crude for June gained US16c to $US64.99 a barrel in late afternoon deals. “During the afternoon … reports hit, and were later denied, of Iranian forces taking control of a US vessel,” IG analyst Chris Beauchamp said………………………………………..Full Article: Source

Hedge funds betting on more losses for crops as supplies swell

Posted on 28 April 2015 by VRS  |  Email |Print

With planting conditions improving across the U.S. Midwest, hedge funds are betting that harvests this year will compound a global crop surplus and worsen losses for corn, soybean and wheat prices.
Corn seeding is already ahead of last year’s pace, and recent rains that hampered sowing in some areas will give way to drier conditions this week, according to MDA Weather Services. In the Great Plains, winter-wheat conditions are better than they were in 2014. Record crops in Argentina and Brazil are adding to soybean supplies as U.S. farmers are forecast to plant the most acres ever next month………………………………………..Full Article: Source

Exchange traded funds make strongest ever start to a year

Posted on 13 April 2015 by VRS  |  Email |Print

The exchange traded funds industry made its strongest ever start to a year with net inflows of just under $96bn in the first three months of 2015, a first quarter record. First quarter inflows were more than double the $37.2bn recorded in the same period last year, according to ETFGI, a consultancy.
The ETF industry’s best ever year was 2014, when investors ploughed a record $339.7bn into exchange traded funds and products. The surge in ETF inflows will strengthen the hand of regulators pushing for tighter supervision of asset managers………………………………………..Full Article: Source

Global ETF/ETP Assets hit a Record $2.92 Trillion in Q1

Posted on 10 April 2015 by VRS  |  Email |Print

Record levels of assets were reached at the end of Q1 for ETFs/ETPs listed Globally at US$ 2.926 trillion, in the United States at US$ 2.093 trillion, Asia Pacific ex-Japan at US$ 119.6, and Japan at US$ 109.3 billion, according to ETFGI’s preliminary monthly ETF and ETP global insight report for Q1.
The global ETF/ETP industry had 5,669 ETFs/ETPs, with 10,961 listings, from 247 providers listed on 63 exchanges in 51 countries. Record levels of net new assets NNA have been reached in Q1 by ETFs/ETPs listed globally which gathered US$ 95.98 billion up significantly from the US$ 37.19 billion in Q1 2014, products listed in the United States gathered US$ 57.53 billion which is significantly higher than the US$ 15.06 billion gathered in Q1 2014 , ETFs/ETPs listed in Europe gathered US$ 34.96 billion is more than double the US$ 11.16 billion gathered in Q1 2014 and ETFs/ETPs listed in Japan gathered NNA of US$ 10.61 billion which is greater than the US$ 7.7 billion in Q1 2014………………………………………..Full Article: Source

Hedge funds gain 2.4% in Q1 driven by currency and commodity markets

Posted on 10 April 2015 by VRS  |  Email |Print

Hedge funds posted positive results last March to conclude a strong first quarter, with performance driven by strong macro trends in currency and commodity markets, complemented by broad-based gains and positioning in event driven, equity hedge and fixed income-based relative value arbitrage strategies, data provider Hedge Fund Research said.
The HFRI Fund Weighted Composite Index gained 0.5% in March and 2.4% in Q1, completing the strongest quarter of outperformance relative to S&P 500 since the third quarter in 2011. “Hedge funds posted the highest quarterly performance since 2013 in Q1, navigating dislocations in currency and commodity markets, benefitting specifically from trend following macro exposures as financial markets discounted the end to U.S. quantitative easing, as well as the inception of ECB stimulus measures,” stated Kenneth J. Heinz, president of HFR………………………………………..Full Article: Source

Commexes’ turnover dips by 39% in FY15 due to CTT

Posted on 10 April 2015 by VRS  |  Email |Print

The turnover of Indian commodity exchanges dropped 39 per cent to Rs 61.68 lakh crore last fiscal due to higher transaction costs and decline in prices of bullion and metals. The business at these bourses was at Rs 101.44 lakh crore in the previous fiscal, 2013-14, according to the data released by the Forward Markets Commission (FMC).
The turnover of bullion fell by over 49 per cent to Rs 21.88 lakh crore in 2014-15, from Rs 43 lakh crore a year-ago. Similarly, the turnover of energy commodities declined by 34 per cent to Rs 16.46 lakh crore, from Rs 24.72 lakh crore, while that of metals dipped by 28 per cent to Rs 12.74 lakh crore from Rs 17.61 lakh crore in the review period………………………………………..Full Article: Source

ETFs Show $5.7 Billion Riding on Recovery in U.S. Energy Stocks

Posted on 09 April 2015 by VRS  |  Email |Print

The worst earnings season for energy companies since 2009 isn’t stopping investors from favoring the industry above all others this year. Exchange-traded funds tracking oil and gas shares have absorbed $5.7 billion in 2015, the most inflows among 12 groups tracked by Bloomberg.
Energy shares may get a boost from Royal Dutch Shell Plc’s acquisition of BG Group Plc, after the oil and gas industry’s biggest deal in at least a decade spurred speculation of further consolidation. Strategists are forecasting a 63 percent contraction in first-quarter earnings for energy companies in the S&P 500, after predicting expansion as recently as October, Bloomberg data show………………………………………..Full Article: Source

Hedge funds end Q1 on a strong note, up 3.2%

Posted on 08 April 2015 by VRS  |  Email |Print

The first quarter’s market conditions have been supportive of hedge fund performance, posting solid gains while the S&P 500 index is down year-to-date. Looking back at the quarter, there are many positive points worth highlighting, following a lacklustre 2014. Once again monetary policies took the front seat, driving hedge fund returns:
Equity-focused strategies and CTA funds have benefited from the large impact of European and Japanese QEs, as well as the Fed’s patience. European L/S Equity funds, while cautious, managed to limit volatility and catch the rally. Systems, mainly trend-followers, are still gaining from the “central bank” play, and generating gains on long equity and bond positioning………………………………………..Full Article: Source

Tough first quarter for commodities markets

Posted on 02 April 2015 by VRS  |  Email |Print

It’s been a tough first quarter in the commodities markets. Oversupply, a stronger dollar and crude weakness weighed on the price of many raw materials. Iron ore led the decliners, closing the quarter at $51 a tonne, a post financial crisis low.
Nevertheless, money flowed into energy exchange traded funds supporting overall investment inflows. Here is a look at some other issues which came under the spotlight. Is the world running out of crude storage? Concerns have mounted that the current supply glut would overwhelm storage tanks from Oklahoma to Xinjiang and depress prices further………………………………………..Full Article: Source

Commodity Funds Continue To Struggle

Posted on 02 April 2015 by VRS  |  Email |Print

The price of a bushel of corn for May delivery tumbled during the last day of the quarter by almost 5 percent to $3.756. The move was caused by the corn supply in the Unites States coming in much higher than expected, even after the government pegged its inventory in June at its highest level in 28 years.
The 7.75 billion bushels’ stockpile, as of March 1, is 11 percent higher than a year ago, according to the U.S. Department of Agriculture. The reading outpaced economists’ estimates of an 8.6 percent increase and is the highest on record at this date since 1987………………………………………..Full Article: Source

Hedge funds achieve outstanding performance as most indices are in positive territory

Posted on 25 March 2015 by VRS  |  Email |Print

Hedge funds achieved an outstanding performance during last week and were up 1.3%. More than 75% of the funds as well as most hedge funds indices are in positive territory, according to Lyxor Asset Management’s Weekly Briefing. The report said that hedge funds have continued to deliver solid returns in 2015 with the Lyxor HFI up 3.4% year-to-date. The first quarter of 2015 is on track to be the best quarter for hedge funds since Q2-2007 when the Lyxor HFI was up 3.7%.
“CTAs and event driven managers outperformed, both last week and year to date, as a result of the peculiar market environment which continues to see equities and bonds delivering positive returns. Financial markets find themselves in a sweet spot, where economic recovery is supporting consumer confidence but not at such a point that would lead central banks to tighten their monetary policy,” said Philippe Ferreira, Lyxor AM’s head of research, managed account platform………………………………………..Full Article: Source

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