Friday, 20 August 2010
World's Largest Economies: US, China, Japan
China has overtaken Japan to take the number two slot, but incomes in Japan are still ten times that of China (using current exchange rates). In 2010 Q2, Chinese output was $1.33 trillion versus $1.29 trillion. DP World mentioned first half profits were up 17% (citing a revival in world trade). DP World have interest in various ports, including Chennai, Cochin and Vishakapatnam (on India's East coast, state of Andhra Pradesh, capital Hyderabad).
Tuesday, 17 August 2010
Palm Oil Price Inflated by Rain in Indonesia
China, India and the EU are the top importers of palm oil (responsible for 50% of global trade in this product). Palm oil is the major traded vegetable oil (60% of flows) whereas sunflower oil is about 25%.
Palm oil is produced predominantly in South East Asia. Indonesia has about 45% of global palm oil production, closely followed by Malaysia at 40%, then Thailand and other countries.
Prices were driven up to 2,737 ringgit per tonne due to the heavy rains which could also affect thermal coal output (Indonesia is the world's largest exporter of thermal coal, with a major mines operating in Kalimantan). The largest palm oil producer in Latin America is Colombia.
Nutritionally, palm oil has extremely high carotene and is useful in combating vitamin A deficiency.
Palm oil is produced predominantly in South East Asia. Indonesia has about 45% of global palm oil production, closely followed by Malaysia at 40%, then Thailand and other countries.
Prices were driven up to 2,737 ringgit per tonne due to the heavy rains which could also affect thermal coal output (Indonesia is the world's largest exporter of thermal coal, with a major mines operating in Kalimantan). The largest palm oil producer in Latin America is Colombia.
Nutritionally, palm oil has extremely high carotene and is useful in combating vitamin A deficiency.
Monday, 16 August 2010
Commodity ETF tracks Dynamic Total Return Commodity Index
United States Commodity Index Fund has been launch August 2010, tracking the SummerHaven Dynamic Commodity Index. 14 contracts are selected on a monthly basis from a possible 27. The index was created by two professors from Yale. It's an "algo" (rules-based). Powershares also have a commodity index fund. iShares also have an ETF tracking S&P GSCI index, allowing broad-based exposure to commodities.
There is concern that such products distort the market and encourage front-running. US Commodity Funds is already famous for USO and UNG. The strategy is to invest in futures that exhibit backwardation (an "anti-contago" strategy). It is reminiscent of the "size effect" in equities.
In other innovations, PowerShares has already released a product to track Ultra-T-bond futures on CBOT (where you can leverage up or down three times). It applies their "monthly leverage rebalancing methodology to fixed-income products".
There is concern that such products distort the market and encourage front-running. US Commodity Funds is already famous for USO and UNG. The strategy is to invest in futures that exhibit backwardation (an "anti-contago" strategy). It is reminiscent of the "size effect" in equities.
In other innovations, PowerShares has already released a product to track Ultra-T-bond futures on CBOT (where you can leverage up or down three times). It applies their "monthly leverage rebalancing methodology to fixed-income products".
Friday, 6 August 2010
JP pays $130m for coal trade gone wrong but Blythe remains focused on the bigger picture
JP has been ramping up its commodities business through the purchase of Bear Stearns and RBS Sempra this year. Nevertheless, Chan Bhima and team (ex-Merrill who moved across in 2009) bet on a decline in European coal prices and lost over $100m. Make big bets while you can - get rewarded if you win - else face a public harakiri.
RBS Sempra is an interesting addition to JP's commodity arsenal. They are active in natural gas fixed-for-floating swaps, basis and options. They are the largest non-producer trader of natural gas in North America.
JP also own Henry Bath, which is a metals and soft commodities warehousing company, registered in Liverpool in 1920, but founded in the 18th Century. Henry Bath, from whose name the company hails, found a copper trading business in 1794. Bath & Son developed trade with Chile, exporting coal and importing copper ore and sodium nitrates (Chilean or Peru saltpetre) which was used in fertilizer and gunpowder. The 1850s was the era of coffee-shop deals, which evolved formally into the London Metal Exchange, of which H. Bath was a founding member.
Blythe Masters is the illustrious Head of Commodities at JP Morgan and helped JP develop CDS in the 1990s.
RBS Sempra is an interesting addition to JP's commodity arsenal. They are active in natural gas fixed-for-floating swaps, basis and options. They are the largest non-producer trader of natural gas in North America.
JP also own Henry Bath, which is a metals and soft commodities warehousing company, registered in Liverpool in 1920, but founded in the 18th Century. Henry Bath, from whose name the company hails, found a copper trading business in 1794. Bath & Son developed trade with Chile, exporting coal and importing copper ore and sodium nitrates (Chilean or Peru saltpetre) which was used in fertilizer and gunpowder. The 1850s was the era of coffee-shop deals, which evolved formally into the London Metal Exchange, of which H. Bath was a founding member.
Blythe Masters is the illustrious Head of Commodities at JP Morgan and helped JP develop CDS in the 1990s.
Wednesday, 4 August 2010
Will Bank of Burger King entrepreneur buy Prudential's Old Online Bank
Citi is reported to be looking to sell Egg, the UK online bank, as part of a wider disposal of assets, to simplify the "Frankenbank", that has apparently become too complex to manage.
Egg, created by Prudential, was bought by Citi in 2007 and potential buyers include BSCH and Metro Bank, the first new high-street bank to open in Britain for more than a century.
Metro Bank is backed by Vernon Hill, who also owns several Burger King franchises. He has a BS with concentration in finance from Wharton.
Citi has already dispensed with Phibro, a commodity trading unit acquired for net asset value, now owned by Occidental Petroleum Corporation (NYSE:OXY) and HQ'ed in Westport, Connecticut. They have a European office in Duke Street, London. (half-way house between Piccadilly Circus and Green Park). The business was sold due to concern's over its top executive's pay packet ($100m bonus in one year, nine-figure bonus) rather than business concerns.
In the first half of the year, Citi paid $75m to settle SEC charges over failing to disclose the extent of its subprime exposure (more than $40bn). This exposure came from the super-senior tranches of CDOs backed by subprime mortgages and related instruments called "liquidity puts". The puts allowed Citi customers to sell debt securities back to Citi at face value if credit markets froze; clearly Citi was betting that this would never happen.
Egg, created by Prudential, was bought by Citi in 2007 and potential buyers include BSCH and Metro Bank, the first new high-street bank to open in Britain for more than a century.
Metro Bank is backed by Vernon Hill, who also owns several Burger King franchises. He has a BS with concentration in finance from Wharton.
Citi has already dispensed with Phibro, a commodity trading unit acquired for net asset value, now owned by Occidental Petroleum Corporation (NYSE:OXY) and HQ'ed in Westport, Connecticut. They have a European office in Duke Street, London. (half-way house between Piccadilly Circus and Green Park). The business was sold due to concern's over its top executive's pay packet ($100m bonus in one year, nine-figure bonus) rather than business concerns.
In the first half of the year, Citi paid $75m to settle SEC charges over failing to disclose the extent of its subprime exposure (more than $40bn). This exposure came from the super-senior tranches of CDOs backed by subprime mortgages and related instruments called "liquidity puts". The puts allowed Citi customers to sell debt securities back to Citi at face value if credit markets froze; clearly Citi was betting that this would never happen.
Subscribe to:
Posts (Atom)