Monday 25th May 2015
NEWS TICKER: FRIDAY, MAY 22ND: The California Public Employees' Retirement System (CalPERS) has named Beliz Chappuie as CalPERS' Chief Auditor, effective July 31, 2015 - Saudi Arabia's oil minister has said the country will switch its energy focus to solar power as the nation envisages an end to fossil fuels, possibly around 2040-2050, Reuters reports. "In Saudi Arabia, we recognise that eventually, one of these days, we are not going to need fossil fuels, I don't know when, in 2040, 2050... we have embarked on a program to develop solar energy," Ali Al-Naimi told a business and climate conference in Paris, the news service reports. "Hopefully, one of these days, instead of exporting fossil fuels, we will be exporting gigawatts, electric ones. Does that sound good?" The minster is also reported to say he still expects the world's energy mix to be dominated by fossil fuels in the near future - Barclays has appointed Steve Rickards as head of offshore funds. He will lead the creation and implementation of the bank’s offshore funds strategy and report directly to Paul Savery, managing director of personal and corporate banking in the Channel Islands. For the last four years Mr Rickards has been heading up the Guernsey Funds team providing debt solutions for private equity and working with locally based fund administrators. Savery says: “Barclays’ funds segment has seen some terrific cross functional success over the past year or so. Specifically, the offshore business has worked hand in hand with the funds team in London to bring the very best of Barclays to our clients, and Steve has been a real catalyst to driving this relationship from a Guernsey perspective.” - Moody's has downgraded Uzbekistan based Qishloq Qurilish Bank's (QQB’s) local-currency deposit rating to B2, and downgraded BCA to b3 and assigned a Counterparty Risk Assessment of B1(cr)/Not prime(cr) to the bank. The agency says the impact on QQB of the publication of Moody's revised bank methodology and QQB's weak asset quality and moderate loss-absorption capacity are the reasons for the downgrades. Concurrently, Moody's has confirmed QQB's long-term B2 foreign-currency deposit rating and assigned stable outlooks to all of the affected long-term ratings. The short-term deposit ratings of Not-prime were unaffected - Delinquencies of the Dutch residential mortgage-backed securities (RMBS) market fell during the three-month period ended March 2015, according to Moody's. The 60+ day delinquencies of Dutch RMBS, including Dutch mortgage loans benefitting from a Nationale Hypotheek Garantie, decreased to 0.85% in March 2015 from 0.92% in December 2014. The 90+ day delinquencies also decreased to 0.66% in March 2015 from 0.71% in December 2014.Nevertheless, cumulative defaults increased to 0.65% of the original balance, plus additions (in the case of master issuers) and replenishments, in March 2015 from 0.56% in December 2014. Cumulative losses increased slightly to 0.13% in March 2015 from 0.11% in December 2014 – Asset manager Jupiter has recruited fund manager Jason Pidcock to build Asian Income strategy at the firm. Pidcock J has built a strong reputation at Newton Investment Management for the management of income-orientated assets in Asian markets and, in particular the £4.4bn Newton Asian Income Fund, which he has managed since its launch in 2005. The fund has delivered a return of 64.0% over the past five years compared with 35.9% for the IA Asia Pacific Ex Japan sector average, placing it 4th in the sector. Since launch it has returned 191.4 against 154.1% for the sector average. Before joining Newton in 2004, Jason was responsible for stock selection and asset allocation in the Asia ex-Japan region for the BP Pension Fund.

Commodity ETPs in demand as China outlook Improves

Wednesday, 09 July 2014
Commodity ETPs in demand as China outlook Improves Global Commodity ETPs saw a second consecutive quarter of inflows in Q2 2014, as increasing confidence in China’s economic outlook and global economic recovery boosted commodity prices and investor demand for commodity exposure. Inflows totalled $275m, up from $271m of inflows in Q1 2014. The combination of inflows and higher prices pushed assets under management (AUM) in commodity ETPs at the end of Q2 2014 to $123.3bn from $122.4bn at the end of Q1 2014. http://www.ftseglobalmarkets.com/

Global Commodity ETPs saw a second consecutive quarter of inflows in Q2 2014, as increasing confidence in China’s economic outlook and global economic recovery boosted commodity prices and investor demand for commodity exposure. Inflows totalled $275m, up from $271m of inflows in Q1 2014. The combination of inflows and higher prices pushed assets under management (AUM) in commodity ETPs at the end of Q2 2014 to $123.3bn from $122.4bn at the end of Q1 2014.

]  “All key commodity sectors saw inflows during the quarter except for agriculture and livestock.  Precious metals saw the strongest investor demand with $430m of inflows, followed by diversified broad commodity ETPs with $172m, energy with $135m and industrial metals with a more modest $15m.  Agriculture and livestock saw $477m of outflows. Increasing confidence in the US recovery, a positive turn in China growth after three years of slowdown, and expected further easing measures by China’s policy-makers has boosted prices and investor sentiment towards commodities,” says Nicholas Brooks, head of research and investment strategy at ETF Securities.

Commodity ETPs with the strongest demand in Q2 were platinum and palladium, with $400m and $410m of inflows respectively. Rising global auto demand (autocatalysts are a key source of demand for both metals) together with rising supply concerns due to mine strikes in South Africa and potential Russia export restrictions has exacerbated fears that already large supply deficits will worsen and has pushed prices higher for both metals.  We anticipate these trends will continue in H2.



Gold ETPs saw mixed flows, with US listed gold ETPs seeing $586m of outflows while Europe and other country listed gold ETPs saw $483m of inflows, leading to net quarterly outflows of $103m. Most of the divergence in the gold ETP flow trends took place in April.  The most likely explanation for the divergence is that during that period European investors were focusing on the close-to-home potential risks of a Russian invasion of the Ukraine, while US investors mostly maintained their bullish view on risk assets as US equities continued to hit new highs. With geopolitical risks still high and many risky asset classes trading at stretched valuations, we believe gold ETP demand will continue to improve in H2 2014 as investors look for hedges against possible risk market corrections.

Diversified broad commodity ETPs saw the largest inflows after platinum and palladium, with total inflows of $172m in Q2. The inflows reflect improving sentiment towards commodities as an asset class as China growth has shown signs of picking up and China policy-makers have made clear they are moving into stimulus mode after three years of tightening. It is interesting to note that the largest inflows were into diversified broad commodity ETPs that exclude agriculture, with $89m of new flows into these ETPs versus $75m into those that include agriculture, highlighting generally negative investor views towards agriculture. 

Agriculture ETPs as a group saw $468m of outflows, with broad diversified seeing the largest outflows followed by sugar, corn, cocoa and coffee. The outflows are likely a combination of profit-taking and expectations of improved growing conditions for a number of key agriculture commodities. If an El Nino weather event occurs later this year (current NOAA forecasts put the probability at 70%), speculative flows may return.

Energy ETPs saw $175m of inflows in Q2, with most of the flows ($169m) going into oil ETPs. Increasing violence in Iraq has raised concerns about supply disruptions, pushed oil prices higher and driven oil ETP demand higher. Natural gas ETPs saw $21m of outflows as investors took profits on the natural gas price surge earlier in the year. Industrial metals saw a modest $15m of inflows, with nickel seeing the strongest inflows ($38m) as Indonesia’s ban on ore exports drove prices higher.

 

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