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Opalesque Futures Intelligence

News Briefs: Asset Flows, New Exchange, Changes at Brokerage and more

Wednesday, July 15, 2009

New Futures Exchange

ELX Futures, an electronic exchange started by a consortium of Wall Street banks, launched US Treasury contracts last week. Newedge and MF Global are members. Marc Schultz, chief executive of Newedge Americas, says they have received significant interest in ELX Futures and are delighted to add ELX to the more than 85 exchanges where the firm offers clearing and execution services.

CTA Asset Outflow Continues

While hedge funds as a whole had a small asset inflow in May for the first time in nine months, commodity trading advisors experienced an outflow, according to Barclay Hedge. The information provider found that CTAs lost $4.1 billion, or 2.4% of assets, in May. Most of the outflow was from programs focused on financials and metals. Fund of hedge funds also lost assets, continuing a steep downward trend that started last year.

Record Volume at Dubai Exchange

The Dubai Mercantile Exchange had record trading volumes in late June after an announcement that the Dubai government will shift to a pricing model based on the DME Oman Crude Oil Futures Contract. "The case for other producers in East of Suez markets to adopt the DME as the base line reference for their term contracts is now more compelling than ever, both in their own interest and that of their customers," DME chairman Ahmad Sharaf said in a statement. The Dubai Department of Petroleum Affairs will set the official monthly selling price for the Emirate's crude oil based on a differential to the settlement price of the Oman Crude Contract.

Kospi 200 Futures Draw Non-Koreans

Kospi 200 futures trading volume rose in the second half of 2009 because of a continuing change in the composition of investors, according to Woori Investment & Securities, the top index futures and options brokerage in the Korean institutional market. Foreigners and securities firms accounted for larger shares of the market, driving volume growth. In the Kospi 200 options market, non-Korean investors accounted for more than 40% of the call and put options (based on volume for calls and value for puts). Foreign institutions have emerged as options market makers. But unlike Kospi 200 futures, options trading volume stagnated this year. Woori sees declining volatility as the reason for the lack of growth in options trading.

CME Offers New Petroleum Average Price Options

CME Group launched trading and clearing for three new financially settled petroleum crack spread average price options contracts. The contracts, listed by NYMEX, are expected to be available beginning on July 19 for trade date July 20.

Changes at MF Global

MF Global entered fund management in the US with a new division that will offer investors access to commodity trading advisors via managed accounts and introduce clients to pre-screened CTAs and global macro traders. "Through this natural extension of our core business, we are leveraging our US distribution network and decades of leadership in futures to broaden the services and products we offer our clients," said Bernard Dan, MF Global's chief executive.

Adam Rochlin, head of the firm's Alternative Investment Strategies division, says the brokerage is in "a unique position to educate our clients and introduce them to professional managers who are otherwise very difficult to identify and access on their own."

Separately, MF Global-owned Lind-Waldock, a commodity futures broker for individual investors in the US, started to offer similar services in Canada. Lind-Waldock will serve the company's Canadian retail clients from offices in Toronto, Montreal and Markham.

In another development, a subsidiary of MF Global joined the Chicago Climate Exchange, a cap-and-trade system for six greenhouse gases. MF Global will act as an offset aggregator, that is, an administrative representative for owners of projects that generate carbon contracts.

Morningstar Adds Commodity Classes

Fund information provider Morningstar added six new commodity categories to its classification of mutual funds based in the United States. The new groups include agriculture, energy, industrial metals and precious metals. The funds can invest directly in physical assets or in futures and other commodity-linked derivatives.

This article was published in Opalesque Futures Intelligence.
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