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Commodities Briefing - Archive | September, 2008

Commodity falls sharpest for half century

Posted on 30 September 2008 by VRS  |  Email |Print

From FT: Commodities prices were on Monday heading for their biggest quarterly drop in more than 50 years on concerns that the US economic slowdown is hitting China, the world’s engine of raw materials demand.

Bankers fear that the drop in commodities prices will trigger a wave of liquidation among speculative investors, further depressing prices in the short term. Kamal Naqvi, head of commodity hedge fund sales at Credit Suisse, told a gold conference in Kyoto that commodity hedge funds could lose up to 25 per cent of their assets by the end of September because of investor redemptions….. Full Article: Source

$50 bln in ‘long-only funds’ flees commods markets

Posted on 30 September 2008 by VRS  |  Email |Print

From Forbes: Investments betting that commodity futures prices will move higher have drastically diminished over the past two months due to the global credit crisis. The amount of so-called long-only money has shrunk by as much as $50 billion, with the sharpest drops in agricultural futures and oil markets.

Commodities seemed insulated from the slump in stocks and real estate through the first half of 2008, with oil racing to a historic high of nearly $150 a barrel by mid-July, fueling an inflation run-up in most other raw materials. But as the dollar rebounded from record lows against the euro and the U.S. banking crisis reached epidemic levels over the last 10 weeks, some of the most bullish investors in energy and agricultural markets began to flee….. Full Article: Source

Scotiabank commodity index plunges 8.9%

Posted on 30 September 2008 by VRS  |  Email |Print

From Globeinvestor.com: The U.S. financial crisis and swings in the U.S. dollar have pounded the resource sector, sending the Scotiabank Commodity Index plunging 8.9 per cent in August.

After seven consecutive highs, the drop was the largest one-month decline since April, 2003, when the “war premium” in oil prices eased, and U.S. and European manufacturing momentum was lost in the aftermath of the Iraq War, says Patricia Mohr, vice-president of Scotia Economics and a commodity market specialist…… Full Article: Source

Gold, Silver demand white hot

Posted on 30 September 2008 by VRS  |  Email |Print

From Resource Investor: With on-the-street demand white hot, an unnatural shortage has developed in the physical gold and silver market (especially silver) because the paper-futures-contract-dominated spot price was panic-driven way too low. However, furious demand for gold and silver exchange traded funds is sending a clear signal back to those paper futures markets right now.

Most bullion dealers will tell you the main problem at the moment is that few people are selling bullion and many more people want to buy with current spot market pricing. Increasingly investors are turning to metal ETFs because they cannot find metal at current spot pricing.. …. Full Article: Source

US crisis not to hit Indian commodities sector, says Regulator

Posted on 30 September 2008 by VRS  |  Email |Print

From Commodityonline.com: Will the financial tumoil in the United States that has hit investment banks badly affect the commodities sector in India? Not really, says India’s apex commodities market regulator the Forward Markets Commission (FMC).

According to FMC Chairman B C Khatua, Indian commodities sector is largely insured against any major crisis thanks to the unprecedented financial meltdown in America economy. But he said India needs to strengthen the regulatory mechanism for commodity futures trading….. Full Article: Source

Energy prices fluctuate in uncertain markets

Posted on 30 September 2008 by VRS  |  Email |Print

From Pennenergy.com: Energy prices continued to waffle, declining Sept. 26 amid uncertainties about the international economy, the value of the US dollar, and global energy demand through 2009.

“Despite Congress having reached agreement over the weekend on the $700 billion bailout package to stabilize the US financial system, oil prices are down more than 4% premarket [Sept. 29] as the US dollar gained versus the euro and amid continuing macroeconomic concerns,” said analysts in the Houston office of Raymond James & Associates Inc….. Full Article: Source

Forex reserves of 8 Asian countries down by $36 bn

Posted on 30 September 2008 by VRS  |  Email |Print

From Business-standard.com: Foreign exchange reserves of eight Asian countries have depleted by a record $36 billion in August alone, as foreign investors pulled out money and central banks were seen using the reserves to prop up falling local currencies.

Though the reserves of these Asian countries have dropped in the last four months, economists say a repeat of currency crisis that hit South East Asian countries a decade back is unlikely because of improved external reserves. “A full blown crisis that would overwhelm currency intervention, resulting in central banks being forced to jack up interest rates to regain control of the currency, is unlikely given Asia’s much-improved external position,” wrote Citigroup Global markets analyst Moh Siong Sim…… Full Article: Source

The nature of the silver market

Posted on 30 September 2008 by VRS  |  Email |Print

From Kitco.com: Silver, in modern times, has had difficulty shaking off its “Cinderella” image. The total value of the silver bullion market is a mere 10% of the value of the gold market and thus of limited economic significance. The silver market is currently subject to major structural changes in both demand and supply.

Goldfields Mineral Services estimates that current world silver bullion stocks of coins and silverware stand at a mere 400 million ounces. By the end of 2008, world government inventories could well stand at or close to zero if present trends continue. Although a large percentage of production is relatively insensitive to the price of silver, as it is a byproduct of base metal mines, the amount of scrap offered for sale can still be very price elastic….. Full Article: Source

China slowdown dents commodities

Posted on 30 September 2008 by VRS  |  Email |Print

From FT: Indian iron ore exporters warned that demand from steel mills in China had fallen sharply over the past month and that Chinese buyers were defaulting on contracts with suppliers.

With coal reportedly piling up in China’s eastern ports, the news of steel defaults will fuel concerns about the likely impact on global commodity prices of a slowing Chinese economy. Analysts say smaller Chinese steel mills are losing money on their output because of weak steel demand and the hefty prices they paid for ore and coal ahead of the Beijing Olympics in August….. Full Article: Source

Fund sales melt commodities; financial crisis deepens

Posted on 30 September 2008 by VRS  |  Email |Print

From Cattlenetwork.com: Commodity indexes fell under heavy fund selling pressure, led by nearly a 10% tumble in crude oil, as global investor confidence wobbled and the U.S. House of Representatives voted down a $700 billion financial sector bailout.

Nearly all markets except for gold were pressured by uncertainty surrounding the bill ahead of the vote and nervousness once it failed to pass, amid a spike in the dollar and fears that protracted global economic weakness will worsen and physical demand for commodities will suffer, analysts said. The Dow Jones-AIG Commodity Index fell 9.245, or 5.2%, to end at 167.545, after hitting a two-week low of 167.094 earlier in the session….. Full Article: Source

Currency futures enable high-risk hedging

Posted on 30 September 2008 by VRS  |  Email |Print

From Commodityonline.com: Exchange traded Currency Futures was launched in India going by its successful track record in such overseas exchanges as the Dubai Gold and Commodities Exchange (DGCX).

The greatest advantage of currency futures is the transparency and reliability of trades, according to V Sundarraman, Senior Vice President of National Stock Exchange. Securities and Exchange Board of India has also given approval for Multi Commodity Exchange of India, country’s largest commodity bourse, to begin currency futures trading…… Full Article: Source

Green businesses take root in America and worldwide

Posted on 30 September 2008 by VRS  |  Email |Print

From Nctimes.com: Environmental sustainability entered the public arena more than 40 years ago with the work of activists such as Rachel Carson, author of “Silent Spring.” That public awareness created a demand for reducing the use of pesticides, protecting endangered species and preserving the oceans.

That demand, once viewed as radical and even anti-business, is now squarely in the business mainstream. Catering to this demand is the “cleantech” industry, a name for a variety of fields that in one way or another focus on environmental protection, energy efficiency and new sources of energy. So pervasive is the trend that it may be misleading to speak of cleantech as a separate industry. Cleantech is being baked into the foods we eat and the clothes we wear, the buildings we work in and the homes we live in….. Full Article: Source

Nickel drops to 2 1/2 year low on outlook for slowing demand

Posted on 30 September 2008 by VRS  |  Email |Print

From Bloomberg: Nickel slumped to the lowest in two and a half years on speculation slowing global economies will further cut demand, after the U.S. House of Representatives rejected a $700 billion plan to rescue the financial system.

Stockpiles of the metal monitored by the London Metal Exchange jumped to 55,596 metric tons yesterday, the highest since June 1999. Demand from the stainless steel industry, which accounts for two-thirds of total nickel use, continues to be weak, according to Deutsche Bank AG. Nickel for delivery in three months on the London Metal Exchange fell as much as 5 percent to $15,588 a ton, extending yesterday’s 3.5 percent slide. This is the lowest intra-day price since April 3, 2006. …. Full Article: Source

Commodities complex retreat on global banking crisis

Posted on 30 September 2008 by VRS  |  Email |Print

From Indiatimes.com: Commodities prices, including precious and base metals and crude oil, corrected considerably on Monday, even as global stock markets traded lower. While US central bank’s $700 billion bailout is closer to a congressional approval, gloom across the global banking sector has caused all financial markets to retreat.

Price of crude oil for October fell nearly 3 per cent on Multi Commodity Exchange today. October contracts of base metals lost an average 2 per cent while precious metals December contracts lost just about 1 per cent…… Full Article: Source

Oil falls $10 on fears bailout failure will hurt economy

Posted on 30 September 2008 by VRS  |  Email |Print

From Chron.com: Oil prices plunged more than $10 a barrel today as a U.S. financial bailout plan failed to win legislative approval, raising the specter of a prolonged economic downturn that could drastically erode global energy demand.

Light, sweet crude for November delivery sank $10.52, or 10.1 percent, to settle at $96.36 on the New York Mercantile Exchange, after earlier dropping as low as $95.04. It was crude’s lowest trading level since prices edged back below $100 earlier this month; crude previously hadn’t traded that low since February. Crude has fallen almost $25, or 20 percent, in the past week amid intense talks to hammer out a deal for the $700 billion bailout….. Full Article: Source

Beltone to launch Egypt ETF by year-end

Posted on 30 September 2008 by VRS  |  Email |Print

From Reuters: Egyptian investment bank Beltone Financial said on Monday it will launch an exchange-traded fund (ETF) in December tracking the benchmark CASE 30 index.

The fund, to be known as XT-Misr, will initially seek 100 million Egyptian pounds and hopes to spark interest from foreign institutional investors, Beltone portfolio manager Alyaa Gomaa told Reuters. “It is regarded as a very good investment tool for foreign investors to access the market,” she said, adding that the ETF would make the index more efficient…… Full Article: Source

CRB commodity index tumbles most since 1956 on demand concerns

Posted on 30 September 2008 by VRS  |  Email |Print

From Bloomberg: The Reuters/Jefferies CRB Index of 19 commodities plunged 5.9 percent, the biggest drop in more than five decades, on concern that a spreading financial crisis may slash demand for raw materials.

Equity indexes tumbled around the world after U.S. lawmakers rejected the Bush administration’s $700 billion financial rescue plan aimed at thawing frozen credit markets and reviving economic growth. The CRB Index sank 21.35 to 343.22 in New York. That’s the biggest drop since at least 1956, when the data begins. …. Full Article: Source

Oman to invest $ 5 bln in domestic steel industry in 2008

Posted on 30 September 2008 by VRS  |  Email |Print

From Zawya.com: The Sultanate of Oman is aiming to become one of the Gulf region’s top iron and steel producer, with plans to invest USD 5 billion to boost productivity and construct new facilities as part of the government’s efforts to broaden the base of its economy for the coming years.

With a clear directive to further strengthen its position in the country’s fast growing construction market, Danube Building Materials, the leading player in the construction, interior decoration and shop fitting industry, has announced that it will be channelling AED 50 million to develop a new steel facility in Mabella, Oman which will further strengthen its position in the Sultanate….. Full Article: Source

Private banks rethinking gold, seen next big buyers

Posted on 30 September 2008 by VRS  |  Email |Print

From Guardian: Private banks could be the next big buyers in the global gold market, helping drive prices higher as they consider restocking bullion bars that were sold off in calmer times, the top HSBC gold trader said.

Jeremy Charles, chairman of the London Bullion Market Association and global head of precious metals trade at HSBC Bank, also said he expected central banks around the world to put the brakes on their plans to sell down gold reserves as they see other assets deteriorate, lending further support to prices…… Full Article: Source

Brazil currency drop threatens profit for commodity producers

Posted on 30 September 2008 by VRS  |  Email |Print

From Bloomberg: The Brazilian currency’s 23 percent plunge against the dollar since August may wipe out the profits of at least six commodity exporters this quarter, including the nation’s largest pulp and paper companies, UBS AG and Banco Santander SA analysts said.

Food producer Sadia SA, which posted a 760 million-real ($410 million) loss on currency bets last week, may report a $267 million net loss in the third quarter, Santander analysts said. Food companies Marfrig Frigorificos & Comercio de Alimentos SA, Minerva SA and Perdigao SA may also post losses because of the depreciation of the real, they said. Currency trades will probably erase profits this quarter at Aracruz Celulose SA and Votorantim Celulose e Papel SA, UBS said. …. Full Article: Source

Chance carson on commodity ETFs and ETNs

Posted on 30 September 2008 by VRS  |  Email |Print

From Seekingalpha.com: Chance Carson is founder and chief investment officer at Alpine Strategies in Colorado Springs, Colo. The firm uses exchange-traded funds, exchange-traded notes and closed-end funds in managing portfolios for high-net-worth investors.

On Friday, IndexUniverse.com Managing Editor Murray Coleman caught up with the veteran portfolio manager and analyst, who also runs an educational site at www.aboutetfs.com. Carson, who has been a money manager and analyst for more than 35 years, is currently designing portfolios with around 35% of Alpine’s total client assets allocated to alternative investments….. Full Article: Source

Carbon trading drives ‘green’ patents surge

Posted on 30 September 2008 by VRS  |  Email |Print

From Cpaglobal.com: Global interest in clean energy solutions from carbon funds and technology giants is stimulating a surge in ‘green’ patents, according to a new study. The report, Carbon Trading: Patently Set for Growth, indicates a strong link between disbursements from the World Bank Carbon Finance Unit and patent filings for clean technologies from 2000 onwards.

The study isolated and analysed 171 relevant families of business method patents that had been generated over the study period. This took in the decade from 1998 to the present, in order to track the effects of the 1997 Kyoto Protocol, which made detailed provisions for carbon trading. Of those patent families, 54 were directly related to carbon trading tools, and 33 to forms of carbon administration…… Full Article: Source

Potanin in buy-back - is Deripaska in sell-out?

Posted on 30 September 2008 by VRS  |  Email |Print

From Mineweb.com: The Bubble Metric Index (BMI) is a measure of the distance between the fantasy of money and financial reality. In the past month, it has been weighing unusually heavily on the oligarchs who own pieces of Norilsk Nickel, Russia’s largest mining company.

Especially those whose obligations have been secured by the value of commodities that have dropped in price, and by shares whose value has plummeted. In the Russian macro-economy, the BMI can be expressed as the distance between the market capitalization of the listed stocks, as recorded on the stock exchanges, and the money supply as reported by the Central Bank. Between the year 2000 and the autumn of 2005, the two measures tracked together closely…… Full Article: Source

Cotton falls exchange limit on rising dollar, slowing economy

Posted on 30 September 2008 by VRS  |  Email |Print

From Bloomberg: Cotton fell by the exchange limit in New York to the lowest price since August 2007 on the dollar’s jump and concern that the economy may sag after the U.S. House of Representatives rejected a financial-bailout plan.

The U.S. Dollar Index rose the most in two weeks after the House rejected the $700 billion proposal that Treasury Secretary Henry Paulson and lawmakers hammered out this weekend to rescue the financial industry from toxic mortgage securities. Cotton futures for December delivery declined by the limit of 3 cents, or 5 percent, to 57.38 cents a pound on ICE Futures U.S. in New York, the lowest for a most-active contract since Aug. 28, 2007. …. Full Article: Source

China’s first emission trading exchange established

Posted on 30 September 2008 by VRS  |  Email |Print

China’s first comprehensive emissions trading exchange was set up in Tianjin Binhai New Area. The Exchange was jointly established by CNPC Assets Management Co., an affiliate of China National Petroleum Corp., Tianjin Property Rights Exchange and the Chicago Climate Exchange, each taking 53 percent, 22 percent and 25 percent stake in the exchange.

The Chicago Climate Exchange, which has been trading greenhouse gas emission allowances since 2003, is the world’s first emission trading exchange under a voluntary but legal binding scheme. The Exchange will principally trade sulfur dioxide emission permits and chemical oxygen demand permits at initial stage, said the Chairman Dai Xiansheng…. Full Press Release: Source

Comex copper pressured by demand worries

Posted on 30 September 2008 by VRS  |  Email |Print

From Fxstreet.com: Copper futures fell to their lowest levels of the year Monday amid worries that the bank-bailout package in the U.S. won’t be enough to halt a reeling economy and amid renewed financial worries in Europe, traders and analysts said.

Most-active December copper fell 16.80 cents to settle at $2.9065 per pound on the Comex division of the New York Mercantile Exchange. The contract hit a low of $2.9010 that was its weakest level since Dec. 18. London prices fell sharply overnight, and a number of analyst in the U.S. and Europe cited the stronger dollar, weaker global stock bourses and problems reported at European financial institutions….. Full Article: Source

Russia’s Polyus Gold looking at buying majority stake in Kazakhgold

Posted on 30 September 2008 by VRS  |  Email |Print

From Mineweb.com: The board of Russia’s top gold producer Polyus Gold will discuss buying a 50-percent-plus-one-share stake in Kazakh gold miner Kazakhgold at a meeting today.

The news agency quoted an unnamed source close to Polyus’ shareholders as saying that the acquisition may be for cash and Polyus shares. Kazakhgold said in a statement that it had received an offer to sell 50.1 percent of its share capital for a mix of cash and shares, although it did not say who had made the offer…… Full Article: Source

Financial derivatives: The golden rule

Posted on 30 September 2008 by VRS  |  Email |Print

From Thepeninsulaqatar.com: Despite their unpredictable nature, financial markets have become one of the most dynamic and popular investment arenas in the world today. The Economist, in “Mapping the Markets”, mentioned that the global markets churn out a combined volume of billions of dollars during daily tradings.

This is a major factor why investing in equities, currencies or commodities has stirred the interest not only of veteran private investors, but also of individual neophytes. While the markets arguably hold huge economic potential, investors can only achieve actual success through careful assessment of their financial goals and the proper use of instruments designed to address their needs…… Full Article: Source

Base metals fall on Wall Street woes

Posted on 30 September 2008 by VRS  |  Email |Print

From The Australian: Base metals fell further in after-hours trade after a proposed $US700 billion financial rescue package was rejected by US lawmakers. The House of Representatives rejected by a vote of 228-205 a Wall Street bailout bill that would have authorised the Treasury Department to purchase toxic mortgage-backed bonds from banks in an effort to jump-start stalled capital markets.

Industrial metals were slammed following the decision. “You’re seeing some heavy selling … long liquidation and some fresh fund selling in here,” said Michael Gross, futures analyst with Optionsellers.com. Copper for delivery in three months on the London Metal Exchange closed down $US335 at $US6440 per tonne. After-hours, the metal fell as low as $US6349.50, its lowest level since mid-December 2007….. Full Article: Source

Gold surges on safe-haven buying, failed bailout

Posted on 30 September 2008 by VRS  |  Email |Print

From Guardian: Gold surged as much as 4.9 percent on Monday as mounting worries over the health of the global financial sector and a rejection of a massive Wall Street bailout sparked buying of safe-haven assets such as bullion.

On Tuesday, U.S. lawmakers rejected a $700 billion bailout plan for the financial industry in a shock vote that sent global markets sliding as European authorities scrambled to prop up a slew of banks. ….. Full Article: Source

Commodities downtrend due to genuine lack of liquidity

Posted on 30 September 2008 by VRS  |  Email |Print

From Marketoracle.co.uk: Even some of the most brilliant guys in the business don’t get what’s happening to the commodity markets right now. They don’t get the fact it’s not manipulation and government intervention that are causing prices to continue falling (although a push was provided via intervention), but a genuine lack of liquidity.

This combined with intensifying gambling practices by the general investing population (dip buying is not providing the sentiment washout required to sponsor an enduring rally), that when added together, is producing this ‘lethal move’ lower in anything that is commodity related, including precious metals. So you see, manipulation and intervention have little to do with ‘the price of tea in China’ at this point past the policy mistake authorities were destined to make all along in triggering a genuine mid-term correction in commodities and precious metals, which was discussed in our last meeting . …. Full Article: Source

Main street to wall street: drop dead

Posted on 30 September 2008 by VRS  |  Email |Print

From Resource Investor: Little did they know that the bill was never going to see the light of day, and that it was going to die early, and of unnatural causes, falling at the feet of bickering Republicans and Democrats before it ever made it out of Congress.

In a nutshell, Main Street USA told Wall Street to drop dead. Drop, it did. And then some; 603 points on the close. The biggest-ever drop in the Dow (some 722 points at one point during the day), an $11.00 crater in crude oil (to just under $96), and a complete and utter meltdown in all commodities on global slowdown fears, all contributed to a hyper-chaotic day in the markets. ….. Full Article: Source

Financial crisis, recession fears hurt demand for base metals

Posted on 29 September 2008 by VRS  |  Email |Print

From AFP: At the London Metal Exchange, the last remaining ‘open out-cry’ market in Europe, traders shout and gesticulate as normal, but fears of recession has diminished their appetite for risk, dampening prices.

While the prices of zinc, copper and other base metals are fixed at the end of frenetic five-minute sessions in the ‘ring,’ situated in the LME’s centre, it is a sense of caution which is ultimately prevailing among traders. “The crisis has changed the mentality in the market, maybe for ever,” said a trader who requested anonymity…… Full Article: Source

Japan banks may boost up commodities after Wall St. deals

Posted on 29 September 2008 by VRS  |  Email |Print

From Tehrantimes.com: Japan’s biggest financial groups may be the next players to wade into volatile commodity markets by soaking up expertise from their new Wall Street partners, widening a drive to lure local investors and hedgers.

While global commodities trading and hedging activity has boomed in recent years, Japan Inc. executives have largely resisted efforts — mostly by foreign banks — to convince them that hedging price risk will help them in the long run…… Full Article: Source

Gold and silver dealer reports an ‘unprecedented’ shortage of metals

Posted on 29 September 2008 by VRS  |  Email |Print

From Goldseek.com: Some of the largest wholesalers in the world are out of all bullion product except for exchange bullion product - 100 ozt and 400 ozt gold bars and 1,000 ozt silver bars. They cannot supply South African Krugerrands, American Eagles and Buffaloes, Canadian Maples, Austrian Philharmonics, Chinese Pandas, Australian Nuggets (all 1 ozt).

They cannot supply 1 oz or 10 oz gold bars or 1, 10 and 100 oz silver bars. And I have confirmed they cannot sell any European or world gold coins such as British sovereigns, francs, marcs, Mexican pesos etc. etc. They have confirmed that there is no physical supply at all from the primary marketplace - large refiners and government mints. ….. Full Article: Source

$6.1 bln pledged to climate funds

Posted on 29 September 2008 by VRS  |  Email |Print

From Commodities-now.com:Leading industrialized nations pledged more than US$6.1 billion to the Climate Investment Funds, a pair of international investment instruments designed to provide interim, scaled-up funding to help developing countries in their efforts to mitigate increases in greenhouse gas (GHG) emissions and adapt to climate change.

Meeting at the World Bank in Washington, representatives of 10 countries (Australia, France, Germany, Japan, The Netherlands, Norway, Sweden, Switzerland, the United Kingdom, and the United States) emphasized their support for the Climate Investment Funds, formally approved on July 1 by the World Bank Board of Executive Directors…… Full Article: Source

Commodities slip on oil to six-and-half month low

Posted on 29 September 2008 by VRS  |  Email |Print

From Business-standard.com: The tumble in oil prices since July has led to a broad sell-off in commodities. Of the 21 commodities tracked by the Deutsche Bank, only four, including sugar and timber, have shown positive returns so far in the second half of this year.

The others have posted losses ranging from 5 per cent to as high as 40 per cent. According to the Reuters-Jefferies CRB Index, a global benchmark for commodities, the prices have hit a six-and-a-half month low. In the wake of the price tumble, the debate is, should commodities, which has seen a boom lasting nearly seven years, be finally shunned by investors?….. Full Article: Source

GFMS’ Walker looking for $1,000 gold soon

Posted on 29 September 2008 by VRS  |  Email |Print

From Mineweb.com: Paul Walker, CEO of metals analysis specialists GFMS reckons that gold will surge through $1,000 again and stay strong for 12 to 18 months but may then fade.

Gold should surge above $1,000 an ounce as the financial crisis fuels safe-haven fund buying, but may then come under pressure as fickle investors slow purchases, the chief of metals consultants GFMS said. “In terms of core trading range for us, I have to say that gold going up towards the $1,000-level is not an impossibility at all,” Paul said…… Full Article: Source

Global and emerging markets funds suffering the most

Posted on 29 September 2008 by VRS  |  Email |Print

From Asian Investor: US equity, money market, energy and financials are benefiting and drawing in new money from investors. Wall Street’s troubles are causing distress in stock markets worldwide, and yet, it is looking increasingly clear that many investors still consider the US as the safest place to park their money.

Bond and equity funds that invest in global and emerging markets suffered a net outflow of $9.5 billion last week, according to Massachusetts-based EPFR Global, which tracks around $10 trillion in assets in traditional and alternative funds worldwide. In contrast, US equity funds attracted $10 billion in net inflows and US money market funds gained $11 billion….. Full Article: Source

A dangerous bubble of derivatives trading

Posted on 29 September 2008 by VRS  |  Email |Print

From Timesofindia.com: It’s consumed some of the best and brightest of Wall Street, gobbled up hundreds of billions of dollars thrown at it by sleepless governments, but nobody is sure whether it has fully burst or there is more to come. It’s the financial bubble that has the whole world in jitters. But what is this credit or investment bubble made of?

Some indication of its anatomy has been revealed in a report released this month by the Bank of International Settlements (BIS) in Basel, Switzerland. ….. Full Article: Source

Oil falls on stronger $US

Posted on 29 September 2008 by VRS  |  Email |Print

From Businessspectator.com.au: Oil extended its decline and fell over a dollar to dip below $US106 a barrel, pressured by gains in the US dollar amid optimism that a vote on a $US700 billion bailout to rescue the US financial system is near.

Congressional leaders from both parties said they had reached a tentative agreement on Sunday, but questions abound as to whether the rescue plan, which would use taxpayer funds to buy up toxic mortgage debt, would restore confidence to shaky markets and head off a deep recession. US light crude for November delivery fell $US1.09 to $US105.85 a barrel by 1231 AEST, adding to Friday’s losses of $US1.13….. Full Article: Source

Carbon emissions rise worldwide

Posted on 29 September 2008 by VRS  |  Email |Print

From Commodities-now.com: On September 26, the Global Carbon Project reported that CO2 emissions – mainly from burning fossil fuels – have grown four times faster since 2000. The latest available statistics for 2007 confirm that China has now officially replaced the United States as the world’s biggest source of annual carbon emissions.

The new numbers were a surprise to many because scientists thought an economic downturn would slow energy use. Instead, carbon dioxide output jumped to a record high of 9.34 billion tons of carbon, an increase of three percent from 2006 to 2007. The pollution leader was China at two billion tons, followed by the United States at 1.75 billion tons of carbon. India is also poised to soon replace Russia as the third highest emitter, according to the report…… Full Article: Source

Falling commodity prices could help inflation ease

Posted on 29 September 2008 by VRS  |  Email |Print

From Mortgageintroducer.com: Although commodity prices are up 8% this year, this is some way off the 25% that they were up in the first half of the year, which had seen them hit record highs, show Clerical Medical figures.

Commodity prices have eased back from record high prices, according to new research from Clerical Medical tracking the price performance of twenty major commodities. Over the first six months of 2008 commodity prices increased by 25%, more than eight times the increase in retail prices (3%) over the same period…… Full Article: Source

Platinum price could bounce back as margins reduce

Posted on 29 September 2008 by VRS  |  Email |Print

From Mineweb.com: Although the platinum price has fallen back more than 50% from its March peak analysts feel it could fall further before recovering sharply as cut margins lead to production cutbacks.

Platinum prices could slide further on lacklustre demand for cars, but the market should bounce back when lower margins trigger production cutbacks. “In the short term, it is possible for prices to slide even more, but looking 12 months from now … prices might be higher and quite a bit,” Standard Bank analyst Walter de Wet said…… Full Article: Source

Investors go for gold

Posted on 29 September 2008 by VRS  |  Email |Print

From Zawya.com: Gold has now become the shelter of choice for investors due to the turmoil in the global financial markets, which has also had a telling n effect on commodities worldwide.

Sloth Hansen, Saxo Bank Manager and Head of Futures and Fixed Income said: “It can be argued, especially at the moment, where gold is being used as a safe haven away from the turmoil in financial markets.” The commodity uptrend we got used to, especially since July last year, has for now been broken as the Commodities Research Bureau (CRB) Index has corrected by 28 percent from the highs. …. Full Article: Source

LSE and Borsa work through merger

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From Financial News: Migration of Italian systems to TradElect has been delayed. The London Stock Exchange’s position as the largest stock market in Europe has made it the main target for the new breed of trading systems looking to take market share.

The exchange has responded to the threat of competition in two key ways however, by funding and delivering in June last year a new equity trading platform TradElect, and by buying Italian exchange group Borsa Italiana to diversify its business into derivatives and post-trade services. One year on from the €1.6bn ($2.2bn) takeover of the Italian market, a key focus for the LSE Group is integrating the two businesses which involves moving some of the various divisions of Italian exchange group to the TradElect platform…… Full Article: Source

Sinosteel woos Aussie nickel and manganese miners

Posted on 29 September 2008 by VRS  |  Email |Print

From Mineweb.com: China’s largest ferrous metals company has said it is in investment talks with Australian nickel and manganese mining companies. State-owned Sinosteel, China’s largest ferrous metals trader, said it was in talks to invest in Australian firms, including miners of manganese and nickel, but did not provide any details.

The comments come just a week after Australia gave approval to Sinosteel to buy up to a 49.9 percent stake in iron ore prospector Murchison Metals Ltd. “We are talking about many projects in Australia, mostly with our partners, to invest in mines including manganese and nickel,” President Huang Tianwen told reporters on the sidelines of the World Economic Forum….. Full Article: Source

Venezuela sees no further OPEC output change

Posted on 29 September 2008 by VRS  |  Email |Print

From Forbes: The Organization of the Petroleum Exporting Countries has no further plans to alter production levels as oil prices remain outside of control of fundamental factors like supply and demand, Venezuelan Oil Minister Rafael Ramirez said.

‘The price has been affected by speculation. The sitation is outside of control of the world fundamentals… There are no plans to alter production, there is not much we (OPEC) can do,’ Ramirez told reporters in Lisbon…… Full Article: Source

Tokyo bourse to allow trading directly from overseas

Posted on 29 September 2008 by VRS  |  Email |Print

From Reuters: The Tokyo Stock Exchange (TSE) plans to allow foreign brokerages without an office in Japan to trade TSE-listed securities directly from abroad. The bourse aims to introduce the new type of membership by the end of the year, said Satoshi Futagi, a spokesman for the bourse.

“Foreign players account for roughly 60 percent of cash stock trading here and even more of derivatives trading. We see sizeable demand for direct trading from abroad, and it’s also in the exchange’s interest to increase the market’s liquidity,” he said…… Full Article: Source

Aluminium: Mid-term price outlook not too rosy

Posted on 29 September 2008 by VRS  |  Email |Print

From Thestar.com.my: The mid-term price outlook for aluminium does not look too rosy, as there are visible signs of slowing demand and high inventory on the London Metal Exchange.

Over the past six months, the price of aluminium has gone down by 20%. In the same period, the price of other base metals like copper, lead, zinc and nickel has fallen by about 15% to 40%. On the LME, aluminium is currently trading at US$2,593 per tonne, down 17% from a high of US$3,122 per tonne in July. The average aluminium price in 2007 was US$2,677 per tonne….. Full Article: Source

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