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Commodities Briefing - Archive | August, 2008

Platinum, palladium rise alongside gold

Posted on 29 August 2008 by VRS  |  Email |Print

From Platinum and palladium prices rose Thursday alongside gold prices, though the gains were dampened somewhat by falling oil prices and a stronger dollar. Precious metals are often bought to hedge against a weakening dollar. Platinum futures for October delivery rose $43.50 to settle at $1,484.20 an ounce on the New York Mercantile Exchange.

Palladium futures for December delivery rose $6.50 to settle at $296.10 an ounce. A note from a UBS analyst encouraging investors to buy gold boosted precious metals….. Full Article: Source

London metal exchange steel contracts reach double milestone

Posted on 29 August 2008 by VRS  |  Email |Print

From The LME steel billet contracts have reached a double milestone with a turnover exceeding quarter of a billion USD ($250m), and over 260,000 metric tonnes or 4,000 lots traded. 21 members of the Exchange have now participated in trading the contract that only began cash trading on the 24 July 2008. Since the introduction of cash trading the volumes of the contracts have more than doubled.

Commenting on the announcement LME Commercial Director, Liz Milan said: “Today our steel contracts have reached a notable double milestone. These are still early days for our steel contracts, but the fact that 260,000 tonnes of billet has traded on the LME shows that there is growing interest in our contracts and that the industry is beginning to understand the value of using futures.”…. Full Article: Source

Uranium stocks - bombed out, but rising

Posted on 29 August 2008 by VRS  |  Email |Print

From Bombed out as listed uranium stocks may be, this sub-sector of global resources has staged a mini-rally over the past few days, on further signs that spot uranium prices are firming, and expectations that corporate merger and acquisition activity may continue rumbling positively.

Uranium oxide commodity prices were quoted at multi-year lows of USD 58/lb last month, from peaks around USD 138/lb reported in June 2007, and have recently been quoted around USD 65/lb. Dozens of listed uranium stocks have suffered stock price carnage in the wake of the halving of uranium commodity prices; Cameco, the world’s biggest listed producer, is 35% off its high…… Full Article: Source

Should commodities be in your portfolio?

Posted on 29 August 2008 by VRS  |  Email |Print

From With the stock and bond market on a steep decline, the weak U.S. dollar and rising energy and food prices, it might be time to adjust your portfolio. The latest victims are the airlines struggling with increasing fuel prices, though higher commodities prices translate into higher prices for all consumer goods and services. Commodities traders have recently been scrutinized for engaging in speculative trading practices to create artificial price increases.

Is this just another attempt at explaining why gas prices have gone through the roof or is it a legitimate complaint? Bob Pardo, a leading Commodities Trading Advisor (CTA) and private fund manager of Pardo Capital Limited thinks that bull markets, whether in stocks or commodities, tend to attract speculators. ….. Full Article: Source

Canada’s current account surplus widens on commodity prices

Posted on 29 August 2008 by VRS  |  Email |Print

From Canada’s current account, the broadest measure of international trade, grew to the highest in a year in the second quarter as prices for exported commodities such as oil and natural gas rose. Receipts from outside Canada exceeded payments sent abroad by C$6.76 billion ($6.47 billion), after a revised C$4.46 billion first-quarter surplus, Statistics Canada said today in Ottawa.

Economists surveyed by Bloomberg forecast an C$8 billion surplus from April to June, the median of 20 estimates, after the initially reported first-quarter surplus of C$5.6 billion. The report indicates commodity exports are helping the economy weather slower growth in the U.S., Canada’s main trading partner, so the central bank may be able to delay cutting interest rates to stimulate spending. Economic growth in Canada will be 1 percent this year, the slowest since 1992, the central bank said last month….. Full Article: Source

Indian firms may get to trade green points

Posted on 29 August 2008 by VRS  |  Email |Print

From This could turn out to be the desi version of carbon trading for Indian industries, but with a twist. The government plans to lay down energy benchmarks for nine energy-intensive industrial sectors, including thermal power, cement, iron and steel, railways and fertilisers, making it mandatory for the sectors to cut energy consumption on specified parameters.

The energy conservation initiative will come with a “cap and trade“ scheme which will provide tradable energy efficiency certificates to industrial units surpassing their targets. Like carbon trading, these instruments can be traded and companies more efficient than the benchmark could benefit. The only difference is that the proposed system works on the basis of energy consumption while international carbon trading is on the basis of reduction in emissions…… Full Article: Source

How to find the right ETF for your portfolio

Posted on 29 August 2008 by VRS  |  Email |Print

From Paul Justice, exchange-traded fund specialist at investment researcher Morningstar Inc., says that investors need to be careful in using ETFs to find the right match between assets and portfolio needs. Justice noted that he tends to look to ETFs that can give him “access to names he can’t get on his own,” or provide broader portfolio diversification than their name implies.

Justice noted that some ETFs sound as if they’re diversified or exposed to more countries or industries than they really are, which requires digging deeper to pick the right funds to own. In a radio interview with Chuck Jaffe, MarketWatch senior columnist, Justice noted several examples where investors might want to shop around in order to get the exposure they really want….. Full Article: Source

India to offload wheat in the open market

Posted on 29 August 2008 by VRS  |  Email |Print

From With the inflation rate nearing 12.6%, India has decided to offload six million tons of wheat from the government stocks in the open market to enhance availability and contain prices, the U.S. Department of Agriculture’s (USDA) Foreign Agricultural Service (FAS) said Aug. 22.

The sale would be done after the country meets the requirements of the targeted public distribution system. In April, India set aside four million tons for buffer stocks, and three million tons for reserve stocks, which was made possible through a record procurement this year at 22.5 million tons vs. 11.1 million tons last year….. Full Article: Source

Buy Gold says UBS - we already are say investors

Posted on 29 August 2008 by VRS  |  Email |Print

From The necessary conditions have been satisfied and it is time to invest in gold once more; while ETC flow suggest interest in commodities has returned. UBS Commodity Strategist John Reade has put out a note today Thursday 28th August 28th urging clients to “Buy Gold”.

He is recommending that investors buy gold with an initial target of $850 (the fix on the morning of 28th August was $833.50), which is also the UBS one-month forecast price, with further gains expected “towards $900 and beyond”….. Full Article: Source

Forestry experts launch carbon trading project

Posted on 29 August 2008 by VRS  |  Email |Print

From While world leaders are yet to agree on much-discussed forestry carbon credits, KeeptheHabitat, an Australian non-profit company, will launch a pilot project to promote the reduction of emissions from deforestation and degradation (REDD). “There is a lot of talk (on forest carbon) but not much action. We have to do something before the official REDD scheme starts,” the KeeptheHabitat chairman Nigel D. Turvey told The Jakarta Post earlier this week.

“What we can do now is to help the business community to put their money into protecting forests.” …. Full Article: Source

Holiday season stocks and commodities trading

Posted on 29 August 2008 by VRS  |  Email |Print

From The low volumes and relatively low volatility posted over the last several days is proof that many traders are on vacation, or at least biding their time before getting back into the market, whichever side they might choose. And even though I personally took some time off to move my oldest child to college, the closest I’ve come to a vacation in the last three years, that didn’t stop TTC members from getting accurate and timely charts and taking some profits out of the humdrum summer market.

Even non-member readers got advanced warning in last week’s update, which said, “the trade against oil and the euro is looking overdone at least in the short term and the equity versus commodities trade next week bears some careful monitoring….. Full Article: Source

Beverley uranium mine expansion approved

Posted on 29 August 2008 by VRS  |  Email |Print

From Australia’s Environment Minister has approved plans by Heathgate Resources to expand its uranium mining operations in South Australia. Australia, which is looking to sell more uranium overseas to meet growing demand for nuclear power, on Thursday approved a proposal by Heathgate Resources to expand its outback Beverley uranium mine.

The approval, announced by Australia’s environment minister Peter Garrett, will allow Heathgate to produce up to 1,500 tonnes of uranium oxide a year. Heathgate, which is a private company, as a matter of policy does not disclose current production runs, a company spokeswoman said. In a statement, the company said it welcomed the government’s approval and looked forward to receiving clearance to dig a second mine next year….. Full Article: Source

Silver prices rise alongside gold

Posted on 29 August 2008 by VRS  |  Email |Print

From CNBC: Silver prices ended higher Thursday, reversing Wednesday’s losses as an analyst note and political tensions overseas gave precious metals a boost. But metals pared their gains as the dollar strengthened and after oil prices turned lower. Silver futures for December delivery rose 13.7 cents to settle at $13.705 an ounce on the New York Mercantile Exchange, after falling about 10 cents the previous day.

A note from a UBS analyst advising investors to buy gold helped lift other precious metals, as did growing tension between Russia and the West over Russia’s attacks on Georgia. France said the European Union was considering imposing sanctions against Russia….. Full Article: Source

Chinese gov’t grain target raised 50 mln tons

Posted on 29 August 2008 by VRS  |  Email |Print

From The government is working on a plan to boost the country’s annual grain output by 10 percent by 2020, an industry expert said. Song Tingming, vice-chairman of the China National Association of Grain Sector said that the National Development and Reform Commission and the Ministry of Agriculture are drafting the plan to boost output by 50 million tons a year to 550 million tons within the next 12 years.

The total is 20 million tons higher than the target set in a national grain production plan approved last month by the State Council. The new plan aims to “fully explore the potential capacity of major production provinces, and takes into account the rising population”, which the government will try to keep within 1.45 billion by 2020, Song said. It will supersede the general goals for major provinces and provide detailed goals for them, he said….. Full Article: Source

AmBank to set up forex, interest rate and commodities derivatives business

Posted on 29 August 2008 by VRS  |  Email |Print

From AMMB Holdings Berhad and the Australia and New Zealand Banking Group Limited have announced plans to establish an AmBank Group foreign exchange, interest rate and commodities derivatives business. This will position the AmBank Group as a leading provider of these products and services in the Malaysian market.

AmBank (a subsidiary of AMMB) and ANZ have entered a technical services agreement which builds on the 2007 strategic partnership between ANZ and AMMB. Under the technical services agreement, ANZ will provide, among others, business leadership resources and relevant technology expertise…… Full Article: Source

Increase in capacity to squeeze refining profits of Asian firms

Posted on 29 August 2008 by VRS  |  Email |Print

From Livemint: New facilities are expected to boost capacity by 1.3 mbpd this year, pushing down margins of refiners. Asian oil refining earnings may fall in the next few years as new processing plants start operations in India and China, Goldman Sachs said. The benchmark complex refining profit in Singapore, Asia’s biggest oil trading centre, may fall to $6 (Rs262 today) a barrel in 2009 and $5.50 in 2010, from $9 this year, Goldman’s India-based analysts Nilesh Banerjee, Karthik Bhat and Durga Dath said in a report on Thursday, without giving earlier estimates.

Supplies of petrol, diesel and jet fuel would increase, pushing refining margins lower, with about 2.5 million barrels per day (mbpd) of new capacity being added globally between 2008 and 2009, the analysts said….. Full Article: Source

New World Resources reports soaring profits

Posted on 29 August 2008 by VRS  |  Email |Print

From Telegraph: Newly-listed New World Resources posted a near five-fold increase in first-half profits yesterday although the Czech coal miner still managed to miss forecasts as increased selling prices were matched by a rise in costs. The Dutch-registered company operates the Czech Republic’s largest coal mines and is also developing assets in Poland.

Pre-tax profits leapt from €58m to €254m (£204m) over the first half of the year, as production rose to 6.7m tonnes of coal and coke. Revenues jumped 60pc to €1.04bn. Coking coal used for steelmaking generates two thirds of NWR’s business, and prices rose by around a half in the second quarter….. Full Article: Source

NZ: Is it time for a price on water ?

Posted on 29 August 2008 by VRS  |  Email |Print

From TVNZ: It seems hard to believe given the rain we’ve had this winter, but according to the Business Council for Sustainable Development all of the country’s fresh water resources will have been fully allocated by 2012. This means, says the Council in a new report, that there is a now a water gold rush underway.

Now lets be clear, they are not talking about New Zealand running out of water. Rather it is about who gets to use the country’s water and is it being used efficiently. Water is essentially a free resource, although people and business must pay for its extraction and delivery….. Full Article: Source

Russia may cut off oil flow to the West

Posted on 29 August 2008 by VRS  |  Email |Print

From Telegraph: Fears are mounting that Russia may restrict oil deliveries to Western Europe over coming days, in response to the threat of EU sanctions and Nato naval actions in the Black Sea. Any such move would be a dramatic escalation of the Georgia crisis and play havoc with the oil markets.

Reports have begun to circulate in Moscow that Russian oil companies are under orders from the Kremlin to prepare for a supply cut to Germany and Poland through the Druzhba (Friendship) pipeline. It is believed that executives from lead-producer LUKoil have been put on weekend alert…… Full Article: Source

Debate on commodities bill divides US senate

Posted on 29 August 2008 by VRS  |  Email |Print

From Democrats and Republicans traded charges of obstructing debate as the US Senate began on July 22 to discuss Majority Leader Harry M. Reid’s (DNev.) bill to reform energy commodity markets. Democrats said that Republicans wanted to delay consideration of S. 3268 by weighing it down with amendments. Republicans responded that Democrats were not willing to consider more meaningful steps, such as opening more federal land to oil and gas leasing.

The Senate agreed to invoke cloture and limit debate on the bill in a 94-0 vote before recessing for lunch. But the two parties clearly stayed sharply divided over how to address near-record crude oil and gasoline prices and their impact on consumers…… Full Article: Source

Ramming the ETS through NZ Parliament

Posted on 29 August 2008 by VRS  |  Email |Print

From The Emissions Trading Scheme is a major piece of economic and environmental legislation that will impact on the lives of every New Zealander for years, so it is too important to be rushed through Parliament just prior to an election. Debate on the Bill started yesterday and there is every prospect that the Government (which now, with the support of minor parties, has sufficient numbers) will progress the legislation under urgency.

The Bill is more about politics and the upcoming election than it is about writing good, fair, lasting law that does not cost the country jobs and growth in the longer term. The Electoral Finance Act was also railroaded through Parliament by a slim majority for purely political reasons. That legislation has turned out to be a shambles…… Full Article: Source

US dollar sets mixed results against major Latin American currencies

Posted on 29 August 2008 by VRS  |  Email |Print

From The US currency advanced to a 6-week high against the Mexican peso and multi-month high versus the Colombian peso in New York trading on Thursday. Simultaneously, the greenback showed weakness against the Chilean peso and the Peruvian Sol.

According to a report released by the US Department of Commerce on Thursday that the gross domestic product increased at an annual rate of 3.3 percent in the second quarter compared to the advance estimate of 1.9 percent growth. Economists had been expecting GDP growth for the quarter to be revised up to 2.7 percent…… Full Article: Source

US, 19 firms on clean-energy trade mission to China, India

Posted on 29 August 2008 by VRS  |  Email |Print

From AFP: The United States and 19 US companies will travel to China and India next month on a clean energy and environment trade mission, the Commerce Department said. US Commerce Assistant Secretary David Bohigian will lead the September 1-12 trade mission, the government’s third such mission to the fast-growing Asian powerhouses since April 2007.

“The 19 companies participating in this mission represent the cutting edge of US innovation, which can boost the efforts of China and India to meet their massive energy demands while improving the environment,” Bohigian said….. Full Article: Source

Merrill Lynch establishes commodities trading platform in Oslo

Posted on 29 August 2008 by VRS  |  Email |Print

From Merrill Lynch has established an office in Oslo, Norway, focused on commodities trading. A team of three trading professionals have relocated from Merrill Lynch in London and will be responsible for expanding the firm’s existing coverage of Nordic power markets. The three-man team is led by Georg Artmann who is joined by Knut Stensrod and Adam Ek.

“This is an important development for Merrill Lynch’s commodity business,” said Rupen Tanna, Managing Director, Co-Head EMEA Commodities. “It brings us closer to our Nordic clients and expands our footprint in the EMEA region.” Merrill Lynch participates in the wholesale energy and energy commodity-related trading markets of the UK and continental Europe through Merrill Lynch Commodities (Europe) Limited (MLCE)…… Full Article: Source

FMC hopes govt will lift ban on commodities futures

Posted on 29 August 2008 by VRS  |  Email |Print

From Commodity markets regulator, the Forward Markets Commission (FMC), hopes the Central Government will lift the ban on futures trading on four commodities next month, a top official said. “I hope that trade in the recently-suspended agricultural commodities will be revived,” FMC Chairman, B C Khatua, said at a meeting in Bangalore on Thursday. In May, the government had suspended futures trading in soyoil, potato, rubber and chickpea for four months, to control the soaring inflation.

FMC had convened a meeting of representatives of trade and manufacturers associations, chambers of commerce and industry, marketing federations and co-operatives, in Bangalore on Thursday. Khatua, in his inaugural address, highlighted the growth of the commodities futures market in India and the various initiatives taken by the regulator for the development and regulation of the market…… Full Article: Source

Four firms eye stake in Indiabulls commod bourse

Posted on 29 August 2008 by VRS  |  Email |Print

From At least four companies have expressed interest in buying stake in the proposed commodity exchange promoted by Indiabulls Financial Services Ltd, a senior official said. The firms, which are all Indian, include banks, government bodies and private companies, Gagan Banga, director, told Reuters adding all of them have applied to the Reserve Bank of India for the necessary approval. He declined to name the companies.

Indiabulls has also applied to the Forward Markets Commission (FMC), commodity futures market regulator, for permission to sell its stake, he said. The companies “want 45 percent but we will sell 34 percent as we want to retain 40 percent,” Banga said refering to the percentage of stake sale being negotiated…… Full Article: Source

Singapore: An island of commodities

Posted on 29 August 2008 by VRS  |  Email |Print

From Singapore is one of the three remaining true city-states in the world. And it is the smallest nation in Southeast Asia. But there is nothing small about the country’s achievements. For the record, Singapore is the sixth wealthiest country in the world in terms of GDP per capita. And soon, the world’s most efficient city state may become the global hub for commodities trading.

If you notice the speed with which Singapore moves as a bustling financial hub, it looks commodities is a sector that the city is focusing heavily. Strange it would sound. For, Singapore does not produce any commodity. It even imports drinking water from Malaysia. But over the years, a large number of commodity traders have chosen the city as their epicentre of operations that it would not be a wonder if Singapore emerges as the most efficient commodities trading centre in the world…… Full Article: Source

India launches rupee futures

Posted on 29 August 2008 by VRS  |  Email |Print

From India hits the button on its first exchange-traded rupee futures on Friday as part of its push to develop more sophisticated markets and hedging tools, and to beat back a fading challenge from an offshore competitor in Dubai.

Market players expect a steady rather the spectacular start when the National Stock Exchange (NSE) launches rupee futures, as investors overcome tight rules and lack of experience. The contract size is $1,000, compared with 12.5 million Japanese yen ($115,000) or 100,000 Australian dollars ($86,000), for a single contract on the Chicago Mercantile Exchange….. Full Article: Source

Aluminum, potash drive index higher

Posted on 29 August 2008 by VRS  |  Email |Print

From While members of the Group of Seven nations have been nursing the wounds of their battered economies, emerging markets such as China have steered a wide range of commodity prices to summer highs. Growing overseas demand for resources such as potash and aluminum brought the price of commodities up by 4 per cent in July - to a record high for the seventh month in a row.

China spent this summer in the world’s spotlight as host of the Olympic Games, but also exhibited its economic muscle through its influence on many of July’s commodity prices….. Full Article: Source

Soft commodity prices continue to increase

Posted on 29 August 2008 by VRS  |  Email |Print

From Soft commodity price cycles last for about 20 years and Australia is currently about halfway through the latest, Great Southern Funds Management funds manager David Bryant told the PortfolioConstruction Conference. “We are talking about 2020 before the current commodity price cycle finishes,” he said.

“If this is a typical 20 year cycle, we will see soft commodity prices continue to increase.” One of the drivers of the current boom in soft commodities is high energy prices. Great Southern research has found that when energy prices rise, the impact is initially felt in the metals sector due to higher operating costs…… Full Article: Source

Why commodity prices are not done rising yet

Posted on 29 August 2008 by VRS  |  Email |Print

From The commodity bull market has a long way to go. This bull market is not magic. It’s not some crazy ‘cycle theory’ I have. It does not fall out of the sky. It’s supply and demand. It’s simple stuff. In the 80s and 90s, when people were calling you to buy mutual fund and stocks, no one called to say, “Let’s invest in a sugar plantation.” No one called and said, “Let’s invest in a lead mine.” Commodities were in a bear market and in bear markets people do not invest in a productive capacity. They never have.

Perhaps they should have, but they’ve never done it throughout history and probably never will. There has been only one lead mine opened in the world the last 25 years. There’s been no major elephant oil fields [of more than a billion barrels] discovered in over 40 years. Many of you were not even born the last time the world discovered a huge elephant oil field. Think about all the elephant fields in the world that you know about. Alaskan oil fields are in decline; Mexican oil fields are in rapid decline; the North Sea is in decline. The UK has been exporting oil for 27 years now. ….. Full Article: Source

Nord pool granted license for U.S. trading

Posted on 29 August 2008 by VRS  |  Email |Print

From Nord Pool has been granted permission from the U.S. Commodity Futures Trading Commission (CFTC) to allow U.S. companies to trade and clear Nordic, international and carbon products. The license will give Nord Pool the opportunity to set up PowerClick terminals in the U.S., and hence enforce the future NASDAQ OMX Group, Inc. global commodity offering and increase the market reach substantially.

The CFTC has, after Nord Pool’s request to approach the U.S. market approach, examined thoroughly all aspects of Nord Pool’s business as a regulatory regime, market surveillance, information sharing, trading and clearing procedures, risk calculation and other critical areas. The CFTC granted Nord Pool ASA a no-action relief letter, giving Nord Pool the right to establish direct customer relations with domestic U.S. companies….. Full Article: Source

NCDEX to expand menu of products for trading

Posted on 29 August 2008 by VRS  |  Email |Print

From National Commodity & Derivatives Exchange Limited (NCDEX) will expand the menu of products for trading. R. Ramaseshan, NCDEX Managing Director and CEO, said 54 commodities were being traded now. These include agricultural products, bullion, metals and energy. NCDEX will set up a power exchange by October this year. It is not planning to enter currency exchange. The commodity exchange will introduce a warehouse management system in a bid to facilitate trouble-free trading.

He said NCDEX was planning to incorporate best practices in the world commodities trade. It would encourage investors and corporates to use the exchange platform for investing and hedging. The Indian farmer would be in a position to choose his cropping pattern based on the futures prices disseminated by the exchange, rather than the practice of sowing a particular crop based on current prices. The challenge is to first reach the farmer, educate him and convince him of the utility of adopting the future prices…… Full Article: Source

Commodities and emerging markets: Joined at the Hip?

Posted on 29 August 2008 by VRS  |  Email |Print

From The growing sense that the air is quickly going out of the commodity bubble has only served to dampen the already-waning interest in emerging market stocks. Indeed, the received wisdom that emerging market equity returns and commodity prices are tightly linked rests on two key assumptions: First, that the explosive growth in emerging market countries is a major driver of commodity prices.

Second, that commodity prices are major determinants of emerging market economic growth, and therefore, equity returns. While there’s certainly some intuitive appeal - not to mention, some truth - in this thinking, the relationship between commodities and emerging markets may be less straightforward than is generally assumed, meaning investments in the emerging markets asset class may still be worth considering….. Full Article: Source

Malaysia: Commodity prices to stay at current levels

Posted on 29 August 2008 by VRS  |  Email |Print

From Commodity prices will remain at the current level until year-end, says PPB Group Bhd chairman Datuk Oh Siew Nam. He said commodity prices, including that of crude palm oil and crude oil, had dropped to a reasonable level in the last few months and would stabilise because they were supported by many forces.

Chua Say Sin, managing director of Malayan Sugar Manufacturing Co Bhd, a unit of PPB, said he anticipated a shortage of sugar supply in the coming years and expected the commodity to fetch higher prices….. Full Article: Source

Commodity price index sets record high for seventh month

Posted on 28 August 2008 by VRS  |  Email |Print

From The commodity boom still has legs. Scotiabank’s commodity pricer index, measuring price trends in 32 of Canada’s major exports, rose by four per cent in July from June and set a new record high - for the seventh consecutive month. Potash, oil and gas, copper and aluminum led the way, but prices for most metals declined in August.

The bank said China is having power shortages and demand for coal for power stations and steel plants will be strong through the second half this year….. Full Article: Source

Invesco launching 4 commodity-focused ETFs

Posted on 28 August 2008 by VRS  |  Email |Print

From Business Week: Invesco PowerShares Capital Management LLC said Wednesday it will launch four exchange-traded funds focusing on commodity investments, with trading of the ETFs expected to begin Sept. 18 on the Nasdaq Stock Market. An ETF is a security that tracks an underlying benchmark much like an index mutual fund, but trades like a stock on an exchange. ETFs are known for having low expenses.

Bruce Bond, president and chief executive of PowerShares Capital Management, said the new ETFs reflect “increased demand and global opportunities focused on producing food and commodities.”…. Full Article: Source

U.S. gold coin demand suggests Asian-style physical metal hoarding spreading to the West

Posted on 28 August 2008 by VRS  |  Email |Print

From The problems the U.S.Mint has had in servicing demand for the popular one ounce Gold Eagle coins suggest that physical gold is again becoming a key store of value for the man in the street in Western economies too.

Gold has long been considered a “safe haven” insurance policy by individual investors - and some institutional ones - against rising inflation and non-controllable political, natural and fiscal disasters. In Asian and Middle Eastern cultures this is especially the case with gold and other precious metals being kept against unpredictable needs - and, as a consequence, gold and silver are also used as wedding and festival gifts - indeed in some societies, particularly in India, such gifts are de rigueur in such ceremonies…… Full Article: Source

Is the commodity squeeze over?

Posted on 28 August 2008 by VRS  |  Email |Print

From We have seen commodities across the board tumble in the past few months. So is the commodity supply/demand squeeze over? In fact, the pullback we’ve seen in major commodities may be enough to give stock investors heartburn, but it is pretty typical for consolidation in a commodity bull market.

For example, the CRB — a widely followed index of commodities that is weighted toward energy — is at price support now. It could bounce here, or it could keep pulling back to further support at 366. It may look like a cliff dive, but these kinds of retracements are normal and even necessary. Meanwhile, the market is starting to react positively to good news. That sounds obvious, but for a while there, commodities were selling off even on bullish news — a sure sign that we were in a correction phase….. Full Article: Source

6 Golden Investments for a Commodities Bounce

Posted on 28 August 2008 by VRS  |  Email |Print

From With oil off more than 20% from its July peak, and the Reuters-CRB Continuous Commodity Index down 19% from its June high, traders are betting that commodities have entered a bear cycle with much further to fall. But it is much more likely that commodities will enjoy another “bounce,” with many of them revisiting record levels before a true downturn sets in. Smart investors will take advantage of this bounce.

In the long run, commodities prices are likely to deflate. Even for oil, new supplies exist and are economic at prices well below those currently prevailing. For agricultural and other “soft” commodities, it’s mostly a matter of planting new land and waiting for the crop….. Full Article: Source

Ministers offer climate compromise on emissions trading scheme

Posted on 28 August 2008 by VRS  |  Email |Print

From Senior Rudd Government ministers have assured business leaders they are willing to compromise on Labor’s controversial emissions trading scheme. A succession of chief executives and business lobbyists have been beating a path to ministerial doors in Canberra this week, as debate intensifies over the final shape of a carbon trading scheme.

Climate Change Minister Penny Wong, Treasurer Wayne Swan and other senior ministers have sought to placate concerns the government is fixated on a preferred model. The Business Council of Australia and other senior lobby groups have warned of a voter backlash if the government goes too far with climate change reform….. Full Article: Source

Commodity party not over, says JPMorgan

Posted on 28 August 2008 by VRS  |  Email |Print

From Investors would be foolish to leave the commodity party before it gets into full swing, according to Ian Henderson, manager of the popular JPM Natural Resources Fund. The specialist commodity fund manager says energy and mining stocks are the cheapest they have been for a decade. He believes the fundamentals underpinning the sector are still sound, while infrastructure growth in emerging markets remains robust.

“It is a mistake to assume that current volatility within the commodities sector is proof that the prolonged rally in commodity stocks is running out of steam,” says Mr Henderson. “It is also misrepresentative to attribute it to a change in the basic fundamentals of supply and demand, which have historically resulted in such compelling returns for investors. In reality, it is the self-perpetuating irrational market sentiment in itself which is causing a sell-off for profit-taking purposes, thus provoking the fall in prices.”…. Full Article: Source

Most commodities rise as energy markets eye Gustav

Posted on 28 August 2008 by VRS  |  Email |Print

From Most commodities prices advanced Wednesday, lifted by the rising price of oil as traders eyed the trajectory of Tropical Storm Gustav. The storm, though downgraded from hurricane status, appeared headed for the Gulf of Mexico, where key oil facilities are located. Back in 2005, hurricanes Katrina and Rita temporarily halted nearly all production in the region.

But with the dollar mixed and trading volumes thin ahead of the Labor Day holiday weekend, some metals and grains ended on a weak note. Oil prices rose for the third consecutive session, shrugging off an Energy Department report showing an unexpected drop in U.S. crude supplies. Royal Dutch Shell PLC and BP PLC said they have started evacuating some workers from offshore rigs in the Gulf….. Full Article: Source

Coriander tops in agri commodity turnover on MCX

Posted on 28 August 2008 by VRS  |  Email |Print

From Reuters: Coriander became the largest trading agri commodity by turnover for the first time on the Multi Commodity Exchange of India (MCX) as traders’ participation rose on hopes of less intervention in the commodity, analysts said. Coriander futures was launched on July 28 on the MCX. India is the world’s largest producer of coriander with a market share of about 70 percent.

“It’s a commodity which has no role in rising inflation. So intervention from the government is not expected, which is bringing in more participation,” said Chowda Reddy, an analyst with Karvy Comtrade Ltd….. Full Article: Source

Gold reserve rejects takeover offer

Posted on 28 August 2008 by VRS  |  Email |Print

From Rusoro (RML) offered two shares for each share of Gold Reserve (GRZ) — a proposal that the Spoke, Wash.-based company’s board said was inadequate and not in the best interests of shareholders. “This highly conditional expression of interest attributed a $90 million value to Gold Reserve’s equity,” said Doug Belanger, president of Gold Reserve.

“The expression of interest did not take into account Gold Reserve’s current financial position, and gave little value for our company’s proven and probable reserves of 10.2 million ounces of gold and 1.4 billion pounds of copper.” Gold Reserve said, however, that it is “always willing” to discuss any potential opportunities to increase shareholder value…… Full Article: Source

Dow Jones Indexes and Chicago Climate Exchange launch global emissions index series

Posted on 28 August 2008 by VRS  |  Email |Print

Dow Jones Indexes, a global index provider, and the Chicago Climate Exchange (CCX), the world’s first and North America’s only voluntary, legally binding integrated greenhouse gas emissions reduction, registry and trading system, today announced the launch of the Dow Jones/CCX European Carbon Index and Dow Jones/CCX Certified Emissions Reductions (CER) Index, which serve as benchmarks for participants seeking exposure to the European Union Emissions Trading Scheme and Kyoto Protocol Clean Development Mechanism (CDM), respectively.

The two new indexes are the first in a series of global emissions indexes to be launched jointly by Dow Jones Indexes and CCX. Emissions trading aims to reduce pollution using a market-based approach of providing economic incentives to companies that reduce their emissions beyond their target.. …. Full press release: Source

Rupee futures: a wise move?

Posted on 28 August 2008 by VRS  |  Email |Print

From Hailed as the next big step in giving financial depth to markets, there may be unseen perils in taking it. The National Stock Exchange will launch rupee futures tomorrow. Traders, derivatives experts and many others are eagerly awaiting, and cheering the debut. A Reserve Bank of India (RBI) internal working group last November recommended these futures be introduced.

This recommendation got a boost from the draft report on financial sector reforms (Raghuram Rajan report) this April. The Rajan report backing for currency futures (proposal 14) was part of a well-thought-out package. Its set of recommendations in this context are: (a) inflation targeting as the single objective of RBI, (b) a flexible exchange rate and (c) high/full capital account convertibility, with full currency and interest rate derivative markets to hedge the associated price risks….. Full Article: Source

Turkish cotton impacted by non-biological “Boll Weevils”

Posted on 28 August 2008 by VRS  |  Email |Print

From Cotton area and production is now estimated to be 380,900 hectares and 500,000 tonnes. The decline in the planting area is due to better returns on alternative crops, namely corn and vegetables. Moreover, frost in the early season also adversely affected planting. An overvalued Turkish Lira continued to hurt Turkish yarn and textile exports and helped competitors from lower cost countries such as India and Uzbekistan.

The Turkish government introduced a new import tax on cotton yarn to protect domestic companies. While total cotton imports declined during the first 11 months of market-year 2008 the market share of U.S. cotton increased to 68%. The GSM-102 Credit Guarantee Program plays and important role in U.S. exports to Turkey, and a late and partial announcement of the 2008 program adversely impacted program utilization….. Full Article: Source

Gold miners in SA need new ways to fight rising costs and increase production

Posted on 28 August 2008 by VRS  |  Email |Print

From South Africa’s big three gold miners, AngloGold Ashanti, Gold Fields and Harmony, are all having to seek new ways of coping with rising costs as their mines get deeper and more costly, and more dangerous, to operate. Faced with falling gold prices and production, new chief executives of Africa’s top three gold producers are seeking novel ways to cut costs and expand output to stay afloat.

AngloGold Ashanti, Gold Fields and Harmony Gold so far this year have been bailed out by a strong gold price. Gold hit a lifetime high of $1,030.80 in March, but a global economic slowdown has since seen prices tumble to around $826, removing a shield from ballooning costs and weak output…… Full Article: Source

BGC partners to acquire liquidez

Posted on 28 August 2008 by VRS  |  Email |Print

From BGC Partners, a publicly-traded brokerage with a market value of about $1.26 billion, said it will acquire Brazil’s largest currency derivatives brokerage, Liquidez, as part of an ongoing global expansion which includes the acquisition of Radix Energy and the merger with eSpeed earlier this year.

BGC Partners has agreed to buy Liquidez for about an even amount of cash and partnership equity which values Liquidez at approximately seven times its expected 2008 post-tax profits. The transaction is expected to close in the first quarter of 2009. BGC declined to disclose the amount of the deal….. Full Article: Source

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