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Soft commodity markets have again produced a more mixed performance
Written By mine on Kamis, 24 Februari 2011 | 04.31
Commodity market, shaw Capital management summarizes the commodity markets improvement, its effect and other global commodities.
The general improvement in sentiment in the financial markets over the past month has also been evident in the commodity markets.
There has been further evidence that the global economic recovery in continuing, there has been more support for the view that the pressures resulting from the sovereign debt crisis in Europe may be easing.
As a result, base metals are generally lower over the month, even after the rally on the latest Chinese announcement about the renminbi; most soft commodity prices are slightly lower, although there have been sharp rises in beverage prices on concerns about future supplies; precious metal prices have moved higher as investors have continued to seek ?safe havens in the storm?; and there has been a strong recovery in oil prices, helped by optimistic signs of a pick up in US demand.
Base metal prices are ending the past month well above recent low levels, but still slightly lower overall, and there has been an additional boost to confidence in the announcement of a ?more flexible? policy towards the renminbi.
It is assumed that even a modest appreciation of the Chinese currency will boost the purchasing power of Chinese buyers, and increase still further China?s position as the world?s largest importer of a broad range of global commodities.
But there is clearly a risk that the importance of this fairly modest move is being exaggerated; and the extent of the earlier reaction should be a powerful warning of the degree of speculative activity in the markets, and the vulnerability of prices. Chinese demand clearly remains a critical factor, and the evidence suggests that it will remain reasonably strong.
Soft commodity markets have again produced a more mixed performance.
Movements in grain prices have been fairly modest, although there has been some support from a recent report by the US Department of Agriculture that the increasing importance of ethanol production will continue to draw down stock levels and help to offset the effects of what is expected to be a bumper grain crop this year.
Most price movements elsewhere have been fairly small; but there have been two significant exceptions. Cocoa prices have been pushed to their highest levels for more than 30 years because of disappointing crop levels in West Africa, and particularly in the Ivory Coast, and the warning that the fall in production will continue unless there is significant investment in new trees and in fertilisers.
There are fears that demand will outstrip supply for the fifth successive year in the 2010/2011 season, and this has forced cocoa buyers to push up prices to cover their requirements, and has exposed the position of banks and others that sold call options in the expectation that prices would fall. The second significant exception has been coffee prices, which have increased by almost 20% during the past month.
The indications are that one commodity-trading house has accumulated a very large number of futures contracts and has indicated that it intends to take delivery of the coffee.
Other funds that had sold futures contracts short have been unable to obtain the coffee to honour those contracts, and so have been forced to scramble to close them and have suffered considerable losses as prices have moved higher.
It is not yet clear whether this technical position has now been cleared; but the fundamentals do not appear to justify the price action, since Brazilian production is expected to be very high in the current season, and so, once the technical position had been cleared, prices could fall fairly sharply.
Oil prices have also been affected by the improvement in market sentiment, and have recovered very sharply over the past month.
Speculative activity has been an important factor; but there has also been an encouraging report from the US Department of Energy indicating strong demand for oil products in the US, and a larger-than-expected reduction in crude oil inventories.
There has also been evidence of continuing strong demand from China; and a warning of the onset of the hurricane season in the Gulf of Mexico, and its possible effects on production levels.
So far however the dramatic oil spill at the BP production well in the Gulf does not appear to have had a noticeable effect on market prices, although the possible consequences, especially for deep-water drilling operations in the future, could clearly become a very significant factor.
The recovery in prices has been very impressive; but it may not be sustainable. OPEC itself has recently issued a very cautious monthly report which argues that ?recent developments have moved oil prices out of equilibrium?, and which emphasises that increasing supplies from non-OPEC countries are keeping downward pressure on prices.
It concludes, that ?although demand has seen some improvement recently, it has been more than overwhelmed by the higher growth in supply?. It seems likely therefore that the present rally will lose momentum unless there is a serious deterioration in the political situation in the Middle East. Precious metal prices have also moved higher over the past month; investors are clearly still seeking ?safe havens in the storm? despite the improvement in sentiment about prospects that has pushed some other commodity prices higher.
Gold prices have reached $1250 per ounce, and silver prices have also moved significantly higher, with exchange-traded funds aggressive buyers of both metals.
The World Gold Council, in its recent quarterly report, indicated that demand for gold was ?exceptionally strong?, and that it was expected to remain so for the rest of year, ?driven by jewellery demand in India and China, and investment demand in the US and in Europe?.
However it is clear that investment demand is the more important factor, with EFT gold holdings now above 2000 tons, and central banks also adding to their holdings again.
There is an obvious risk that the latest surge in prices will lead to some profit taking. But given the present situation, and particularly the risk of sovereign debt defaults, it would be unwise to assume that the improvement in precious metal prices in over.
At Shaw Capital Management we give you the information and insight you need to make the right investment choices.
The general improvement in sentiment in the financial markets over the past month has also been evident in the commodity markets.
There has been further evidence that the global economic recovery in continuing, there has been more support for the view that the pressures resulting from the sovereign debt crisis in Europe may be easing.
As a result, base metals are generally lower over the month, even after the rally on the latest Chinese announcement about the renminbi; most soft commodity prices are slightly lower, although there have been sharp rises in beverage prices on concerns about future supplies; precious metal prices have moved higher as investors have continued to seek ?safe havens in the storm?; and there has been a strong recovery in oil prices, helped by optimistic signs of a pick up in US demand.
Base metal prices are ending the past month well above recent low levels, but still slightly lower overall, and there has been an additional boost to confidence in the announcement of a ?more flexible? policy towards the renminbi.
It is assumed that even a modest appreciation of the Chinese currency will boost the purchasing power of Chinese buyers, and increase still further China?s position as the world?s largest importer of a broad range of global commodities.
But there is clearly a risk that the importance of this fairly modest move is being exaggerated; and the extent of the earlier reaction should be a powerful warning of the degree of speculative activity in the markets, and the vulnerability of prices. Chinese demand clearly remains a critical factor, and the evidence suggests that it will remain reasonably strong.
Soft commodity markets have again produced a more mixed performance.
Movements in grain prices have been fairly modest, although there has been some support from a recent report by the US Department of Agriculture that the increasing importance of ethanol production will continue to draw down stock levels and help to offset the effects of what is expected to be a bumper grain crop this year.
Most price movements elsewhere have been fairly small; but there have been two significant exceptions. Cocoa prices have been pushed to their highest levels for more than 30 years because of disappointing crop levels in West Africa, and particularly in the Ivory Coast, and the warning that the fall in production will continue unless there is significant investment in new trees and in fertilisers.
There are fears that demand will outstrip supply for the fifth successive year in the 2010/2011 season, and this has forced cocoa buyers to push up prices to cover their requirements, and has exposed the position of banks and others that sold call options in the expectation that prices would fall. The second significant exception has been coffee prices, which have increased by almost 20% during the past month.
The indications are that one commodity-trading house has accumulated a very large number of futures contracts and has indicated that it intends to take delivery of the coffee.
Other funds that had sold futures contracts short have been unable to obtain the coffee to honour those contracts, and so have been forced to scramble to close them and have suffered considerable losses as prices have moved higher.
It is not yet clear whether this technical position has now been cleared; but the fundamentals do not appear to justify the price action, since Brazilian production is expected to be very high in the current season, and so, once the technical position had been cleared, prices could fall fairly sharply.
Oil prices have also been affected by the improvement in market sentiment, and have recovered very sharply over the past month.
Speculative activity has been an important factor; but there has also been an encouraging report from the US Department of Energy indicating strong demand for oil products in the US, and a larger-than-expected reduction in crude oil inventories.
There has also been evidence of continuing strong demand from China; and a warning of the onset of the hurricane season in the Gulf of Mexico, and its possible effects on production levels.
So far however the dramatic oil spill at the BP production well in the Gulf does not appear to have had a noticeable effect on market prices, although the possible consequences, especially for deep-water drilling operations in the future, could clearly become a very significant factor.
The recovery in prices has been very impressive; but it may not be sustainable. OPEC itself has recently issued a very cautious monthly report which argues that ?recent developments have moved oil prices out of equilibrium?, and which emphasises that increasing supplies from non-OPEC countries are keeping downward pressure on prices.
It concludes, that ?although demand has seen some improvement recently, it has been more than overwhelmed by the higher growth in supply?. It seems likely therefore that the present rally will lose momentum unless there is a serious deterioration in the political situation in the Middle East. Precious metal prices have also moved higher over the past month; investors are clearly still seeking ?safe havens in the storm? despite the improvement in sentiment about prospects that has pushed some other commodity prices higher.
Gold prices have reached $1250 per ounce, and silver prices have also moved significantly higher, with exchange-traded funds aggressive buyers of both metals.
The World Gold Council, in its recent quarterly report, indicated that demand for gold was ?exceptionally strong?, and that it was expected to remain so for the rest of year, ?driven by jewellery demand in India and China, and investment demand in the US and in Europe?.
However it is clear that investment demand is the more important factor, with EFT gold holdings now above 2000 tons, and central banks also adding to their holdings again.
There is an obvious risk that the latest surge in prices will lead to some profit taking. But given the present situation, and particularly the risk of sovereign debt defaults, it would be unwise to assume that the improvement in precious metal prices in over.
At Shaw Capital Management we give you the information and insight you need to make the right investment choices.
Global Commodity Prices on Dollar Rising
Written By mine on Rabu, 08 Desember 2010 | 23.24
Stocks on Wall Street are fluctuating between gains and losses as the rising US dollar pushes down commodity prices. Hong Kong stocks advanced for the first time in three days as shares of raw material producers rose after commodity prices increased yesterday and gold climbed to a record.
In early afternoon trading, the Dow Jones Industrial Average is down 6 points to 11,353 after being in positive territory late in the morning session.
The S&P 500 index is holding up better, having gained 0.1% to 1225 while the Nasdaq Composite is up 0.2% at 2603.
The dollar's gain sent commodity prices lower, hitting the stocks of materials, energy and industrial companies. Dow components DuPont fell 1.2% while Caterpillar shed 0.8%.
McDonald's fell 2% after reporting same-store sales rose 4.8% in November, driven by its McRib sandwich, but fell short of analysts' estimates.
Other markets: Europe mixed, Asia down
European stocks were mixed with most markets finishing off their lows, helped by some encouraging economic news and speculation about mergers and acquisitions.
The Stoxx Europe 600 index finished 0.4% higher at 274.98. The UK's FTSE 100 was down 0.2% to 5794.53, Germany's DAX was down 0.4% at 6975.87 and the French CAC-40 index was 0.6% higher at 3831.98.
Asian stocks ended mostly lower, with Chinese and Hong Kong shares falling on worries an interest-rate increase could be coming over the weekend after Beijing advanced the release of monthly inflation data to Saturday.
Korean stocks were hurt by renewed geopolitical tensions, while Japanese shares advanced as exporters drew support from a weakened yen.
The Nikkei Stock Average climbed 0.9% to 10232.33 for its highest finish since June 21. But most other major benchmarks ended lower, with Australia's S&P/ASX 200 dropping 0.6% to 4699.92, Korea's Kospi falling 0.4% to 1955.72 and India's Sensex declining 1.2% to 19696.48.
The Shanghai Composite dropped 1% to 2848.55 and Hong Kong's Hang Seng Index fell 1.4% to 23092.52.
Commodities: Oil, gold down
Oil prices tumbled after a government report showed a sharp increase in US fuel inventories.
Light, sweet crude for January delivery gave up $US1.25, or 1.4%, to $US87.45 a barrel in New York. Brent crude on the ICE futures exchange lost $US1.15, or 1.3%, at $US90.24 a barrel.
Gold futures fell below $US1400 as rising US Treasury yields made the metal a less attractive investment.
The most actively traded gold futures contract, for February delivery, was down $US15.70, or 1.1%, at $US1393.30 an ounce in New York.
Currencies: Dollar up, euro down
The US dollar rose for a third day against a basket of major rivals after a tentative deal on taxes pushed Treasury bond yields higher.
The dollar rose to ?84.26, up from ?83.51 on Tuesday. The euro fell to $US1.3225 from $1.3259.
The UK pound gained 0.1% to $US1.5775.
Cnooc Ltd., China?s biggest offshore oil producer, rose 1.1 percent. Zijin Mining Group Co., China?s largest gold producer, advanced 4.1 percent. Xinjiang Goldwind Science & Technology Co., a China-based maker of wind turbines, surged 7.6 percent after winning 5.7 billion yuan ($857.5 million) of supply contracts in China. Foxconn International Holdings Ltd., the world?s No. 1 contract maker of mobile phones, climbed 3 percent after President Barack Obama said he?ll agree to Bush-era tax cuts.
?Obama extending tax cuts should help support the economic recovery,? said Terrace Chum, who helps manage about $6 billion at MFC Global Investment Management in Hong Kong. ?Investors are still mindful of policy tightening for China. That will set the tone for the market.?
Hong Kong?s Hang Seng Index climbed 0.8 percent to 23,428.15 as of the 4 p.m. local time close, erasing losses of as much as 0.6 percent earlier. The Hang Seng China Enterprises Index of so-called H shares of Chinese companies rose 0.9 percent to 12,922.24.
The Hang Seng Index has increased 7.1 percent this year, on expectations that growth in corporate earnings will overcome concerns about the pace of the U.S. economic recovery and China?s steps to curb rising property prices. Shares in the gauge trade at an average 14.7 times estimated earnings, compared with about 17.2 times at the start of the year.
Shares of raw material producers advanced after crude oil for January delivery rose 0.2 percent to settle at $89.38 a barrel in New York yesterday on speculation the U.S. may extend stimulus measures, bolstering fuel demand in the world?s largest oil-consuming country. Copper futures climbed 0.5 percent in London yesterday, while gold rose to an all-time high of $1,427.55 an ounce in New York.
Cnooc increased 1.1 percent to HK$18.36. Jiangxi Copper Co., China?s biggest producer of the metal increased 2.4 percent to HK$25.25. Zijin Mining jumped 4.1 percent to HK$7.59. Real Gold Mining Ltd. gained 2.2 percent to HK$14.94.
Xinjiang Goldwind surged 7.6 percent to HK$18.34. The company said it won contracts valued at 920.1 million yuan to supply wind-turbine electricity generators to China Three Gorges New Energy Corp. That?s in addition to contracts worth 4.77 billion yuan for eight other wind-turbine projects in China.
Exporters advanced after Obama said he would accept a lower rate for the estate tax than Democrats wanted in order to break a stalemate over extending the George W. Bush administration?s tax cuts before Congress adjourns. The current tax rates, enacted in 2001 and 2003, are set to expire Dec. 31. ?This compromise is an essential step on the road to recovery,? Obama said.
Foxconn increased 3 percent to HK$5.77. Cosco Pacific Ltd., Asia?s third-largest container-terminal operator, jumped 3.9 percent to HK$13.30.
?Valuations have become attractive following the decline in November,? said Castor Pang, Hong Kong-based research director at Cinda International Holdings Ltd. ?Prospects of further quantitative easing in the U.S. and tax cuts in the U.S. are positive for Hong Kong stocks.?
Tsingtao Brewery Co., the Chinese beer company founded by German settlers more than a century ago, advanced 5 percent to HK$42.95. The company said it will acquire Shandong Xin Immense Brewery Co. for 1.87 billion yuan.
Hong Kong Rents
Commercial property landlords in Hong Kong gained amid prospects of rising rents in the Chinese city. Prime office rents will rise as much as 35 percent in 2011 because of increased demand and limited supply, Gavin Morgan, head of markets at Jones Lang LaSalle Inc. said at a media briefing today.
Wharf (Holdings) Ltd., the owner of Times Square and Harbour City shopping malls and office complexes in the city, surged 5.8 percent to HK$58. Sun Hung Kai Properties Ltd., the world?s biggest developer by market value, gained 1.5 percent to HK$131.50.
Three stocks advanced for each that fell in the 45-company Hang Seng Index. Futures on the gauge climbed 1.2 percent to 23,459.
In early afternoon trading, the Dow Jones Industrial Average is down 6 points to 11,353 after being in positive territory late in the morning session.
The S&P 500 index is holding up better, having gained 0.1% to 1225 while the Nasdaq Composite is up 0.2% at 2603.
The dollar's gain sent commodity prices lower, hitting the stocks of materials, energy and industrial companies. Dow components DuPont fell 1.2% while Caterpillar shed 0.8%.
McDonald's fell 2% after reporting same-store sales rose 4.8% in November, driven by its McRib sandwich, but fell short of analysts' estimates.
Other markets: Europe mixed, Asia down
European stocks were mixed with most markets finishing off their lows, helped by some encouraging economic news and speculation about mergers and acquisitions.
The Stoxx Europe 600 index finished 0.4% higher at 274.98. The UK's FTSE 100 was down 0.2% to 5794.53, Germany's DAX was down 0.4% at 6975.87 and the French CAC-40 index was 0.6% higher at 3831.98.
Asian stocks ended mostly lower, with Chinese and Hong Kong shares falling on worries an interest-rate increase could be coming over the weekend after Beijing advanced the release of monthly inflation data to Saturday.
Korean stocks were hurt by renewed geopolitical tensions, while Japanese shares advanced as exporters drew support from a weakened yen.
The Nikkei Stock Average climbed 0.9% to 10232.33 for its highest finish since June 21. But most other major benchmarks ended lower, with Australia's S&P/ASX 200 dropping 0.6% to 4699.92, Korea's Kospi falling 0.4% to 1955.72 and India's Sensex declining 1.2% to 19696.48.
The Shanghai Composite dropped 1% to 2848.55 and Hong Kong's Hang Seng Index fell 1.4% to 23092.52.
Commodities: Oil, gold down
Oil prices tumbled after a government report showed a sharp increase in US fuel inventories.
Light, sweet crude for January delivery gave up $US1.25, or 1.4%, to $US87.45 a barrel in New York. Brent crude on the ICE futures exchange lost $US1.15, or 1.3%, at $US90.24 a barrel.
Gold futures fell below $US1400 as rising US Treasury yields made the metal a less attractive investment.
The most actively traded gold futures contract, for February delivery, was down $US15.70, or 1.1%, at $US1393.30 an ounce in New York.
Currencies: Dollar up, euro down
The US dollar rose for a third day against a basket of major rivals after a tentative deal on taxes pushed Treasury bond yields higher.
The dollar rose to ?84.26, up from ?83.51 on Tuesday. The euro fell to $US1.3225 from $1.3259.
The UK pound gained 0.1% to $US1.5775.
Cnooc Ltd., China?s biggest offshore oil producer, rose 1.1 percent. Zijin Mining Group Co., China?s largest gold producer, advanced 4.1 percent. Xinjiang Goldwind Science & Technology Co., a China-based maker of wind turbines, surged 7.6 percent after winning 5.7 billion yuan ($857.5 million) of supply contracts in China. Foxconn International Holdings Ltd., the world?s No. 1 contract maker of mobile phones, climbed 3 percent after President Barack Obama said he?ll agree to Bush-era tax cuts.
?Obama extending tax cuts should help support the economic recovery,? said Terrace Chum, who helps manage about $6 billion at MFC Global Investment Management in Hong Kong. ?Investors are still mindful of policy tightening for China. That will set the tone for the market.?
Hong Kong?s Hang Seng Index climbed 0.8 percent to 23,428.15 as of the 4 p.m. local time close, erasing losses of as much as 0.6 percent earlier. The Hang Seng China Enterprises Index of so-called H shares of Chinese companies rose 0.9 percent to 12,922.24.
The Hang Seng Index has increased 7.1 percent this year, on expectations that growth in corporate earnings will overcome concerns about the pace of the U.S. economic recovery and China?s steps to curb rising property prices. Shares in the gauge trade at an average 14.7 times estimated earnings, compared with about 17.2 times at the start of the year.
Shares of raw material producers advanced after crude oil for January delivery rose 0.2 percent to settle at $89.38 a barrel in New York yesterday on speculation the U.S. may extend stimulus measures, bolstering fuel demand in the world?s largest oil-consuming country. Copper futures climbed 0.5 percent in London yesterday, while gold rose to an all-time high of $1,427.55 an ounce in New York.
Cnooc increased 1.1 percent to HK$18.36. Jiangxi Copper Co., China?s biggest producer of the metal increased 2.4 percent to HK$25.25. Zijin Mining jumped 4.1 percent to HK$7.59. Real Gold Mining Ltd. gained 2.2 percent to HK$14.94.
Xinjiang Goldwind surged 7.6 percent to HK$18.34. The company said it won contracts valued at 920.1 million yuan to supply wind-turbine electricity generators to China Three Gorges New Energy Corp. That?s in addition to contracts worth 4.77 billion yuan for eight other wind-turbine projects in China.
Exporters advanced after Obama said he would accept a lower rate for the estate tax than Democrats wanted in order to break a stalemate over extending the George W. Bush administration?s tax cuts before Congress adjourns. The current tax rates, enacted in 2001 and 2003, are set to expire Dec. 31. ?This compromise is an essential step on the road to recovery,? Obama said.
Foxconn increased 3 percent to HK$5.77. Cosco Pacific Ltd., Asia?s third-largest container-terminal operator, jumped 3.9 percent to HK$13.30.
?Valuations have become attractive following the decline in November,? said Castor Pang, Hong Kong-based research director at Cinda International Holdings Ltd. ?Prospects of further quantitative easing in the U.S. and tax cuts in the U.S. are positive for Hong Kong stocks.?
Tsingtao Brewery Co., the Chinese beer company founded by German settlers more than a century ago, advanced 5 percent to HK$42.95. The company said it will acquire Shandong Xin Immense Brewery Co. for 1.87 billion yuan.
Hong Kong Rents
Commercial property landlords in Hong Kong gained amid prospects of rising rents in the Chinese city. Prime office rents will rise as much as 35 percent in 2011 because of increased demand and limited supply, Gavin Morgan, head of markets at Jones Lang LaSalle Inc. said at a media briefing today.
Wharf (Holdings) Ltd., the owner of Times Square and Harbour City shopping malls and office complexes in the city, surged 5.8 percent to HK$58. Sun Hung Kai Properties Ltd., the world?s biggest developer by market value, gained 1.5 percent to HK$131.50.
Three stocks advanced for each that fell in the 45-company Hang Seng Index. Futures on the gauge climbed 1.2 percent to 23,459.
Commodity Prices Soar Due Dollar Devaluation and Strong Economy
Written By mine on Jumat, 12 November 2010 | 08.50
Commodity prices can soar due to both strong economic growth or dollar devaluation, given that global prices are in dollars. As many market observers point to surging commodity prices as a sign of the Fed destroying the U.S. dollar, perhaps they should note that, actually, the dollar is far less correlated with commodity prices than it used to be.
The rise in commodity prices which began early last year has not been nearly as well correlated to the dollar (-0.36) as it was in the mid-2001 to late 2008 era (-0.87), which in turn suggests that there have been other factors at work since early last year that have been more dominant, namely the forces of recovery.
By other factors, the author means economic strength globally, whereby demand pulls up prices rather than simply fears about the dollar's value. Basically, as commodities have surged lately, the dollar hasn't actually lost much value. People forget that the Dollar Index is at a stronger level that it was at during 2008... yet commodity prices are much, much stronger than 2008.
Market and Investors in Commodities News Today
Written By mine on Kamis, 07 Oktober 2010 | 01.14
azocommodity.com - Commodity markets rallied in September as investor sentiment turned positive amidst the prospects of further rounds of quantitative easing. A noticeable trend shift is taking place, suggesting fundamental supply and demand dynamics will take priority over macroeconomic indicators in determining prices over the long term.
Nelson Louie, Global Head of Commodities at Credit Suisse Asset Management said, "As reflected in Fed Chairman Ben Bernanke's recent comments, subduing deflation will likely continue to be a top priority of the Federal Reserve over the near term, and as more quantitative easing takes place, we expect commodities prices will continue to rise. While macroeconomic factors have driven returns over recent history, we expect fundamental factors to drive prices moving forward over the longer term."
Christopher Burton, Senior Portfolio Manager for the Credit Suisse Total Commodity Return Strategy added, "Historically, Commodities prices have tended to perform best during periods of higher than expected inflation. Today we're seeing some major developed countries actively discussing or engaging in various fiscal and monetary measures, including devaluing currencies, in order to keep their exports globally competitive, while fiscal policy worldwide remains accommodative. As a result, investors may continue to seek out investments that should retain their value in spite of inflation. This has benefited commodities generally and precious metals in particular."
The Dow Jones-UBS Commodity Index Total Return rose 7.26% in September, bringing the year-to-date performance to 0.90%. Overall, 16 of the 19 index constituents increased in value. Agriculture commodities were pushed higher by severe weather conditions and supply concerns ? seen most prevalently in Sugar and Cotton. Economically sensitive commodities, especially those in the industrial metals complex, surged, led higher by Aluminum and Nickel, up 13.83% and 12.97%, respectively. The Precious Metals sector, the best performing group year-to-date, had another positive month. As economic uncertainty prevailed for the majority of September, Gold and Silver rallied. Gold returned 4.76%, lead higher by Central Banks changing course to become net purchasers of the precious metal. Silver rose 12.31% for the month.
Most Asian stocks fell as Samsung Electronics Co. reported profit that missed analyst estimates, overshadowing gains by commodity-related companies after oil and metal prices rose.
Samsung, Asia?s largest maker of semiconductors, fell 2.7 percent in Seoul, dragging down chipmakers. Canon Inc., a camera maker that gets more than a fourth of its sales in the Americas, slumped 2 percent in Tokyo after U.S. companies unexpectedly cut jobs last month. BHP Billiton Ltd., the world?s biggest mining company, gained 0.9 percent in Sydney. STX Pan Ocean Co., South Korea?s No. 1 bulk carrier, surged 10 percent in Seoul after shipping rates advanced.
About five shares declined for every four that advanced in the MSCI Asia Pacific Index, which was little changed at 130.04 as of 2 p.m. in Tokyo. The gauge earlier rose to its highest level since August 2008, before the bankruptcy of Lehman Brothers Holdings Inc.
?Sentiment is fairly mixed,? said Shane Oliver, Sydney- based head of investment strategy at AMP Capital Investors Ltd., which manages $85 billion. ?Markets have priced in continuing economic growth and continuing strength in profits, so whenever something negative comes along that questions this, like Samsung, it causes a bit of a setback.?
Nelson Louie, Global Head of Commodities at Credit Suisse Asset Management said, "As reflected in Fed Chairman Ben Bernanke's recent comments, subduing deflation will likely continue to be a top priority of the Federal Reserve over the near term, and as more quantitative easing takes place, we expect commodities prices will continue to rise. While macroeconomic factors have driven returns over recent history, we expect fundamental factors to drive prices moving forward over the longer term."
Christopher Burton, Senior Portfolio Manager for the Credit Suisse Total Commodity Return Strategy added, "Historically, Commodities prices have tended to perform best during periods of higher than expected inflation. Today we're seeing some major developed countries actively discussing or engaging in various fiscal and monetary measures, including devaluing currencies, in order to keep their exports globally competitive, while fiscal policy worldwide remains accommodative. As a result, investors may continue to seek out investments that should retain their value in spite of inflation. This has benefited commodities generally and precious metals in particular."
The Dow Jones-UBS Commodity Index Total Return rose 7.26% in September, bringing the year-to-date performance to 0.90%. Overall, 16 of the 19 index constituents increased in value. Agriculture commodities were pushed higher by severe weather conditions and supply concerns ? seen most prevalently in Sugar and Cotton. Economically sensitive commodities, especially those in the industrial metals complex, surged, led higher by Aluminum and Nickel, up 13.83% and 12.97%, respectively. The Precious Metals sector, the best performing group year-to-date, had another positive month. As economic uncertainty prevailed for the majority of September, Gold and Silver rallied. Gold returned 4.76%, lead higher by Central Banks changing course to become net purchasers of the precious metal. Silver rose 12.31% for the month.
Most Asian stocks fell as Samsung Electronics Co. reported profit that missed analyst estimates, overshadowing gains by commodity-related companies after oil and metal prices rose.
Samsung, Asia?s largest maker of semiconductors, fell 2.7 percent in Seoul, dragging down chipmakers. Canon Inc., a camera maker that gets more than a fourth of its sales in the Americas, slumped 2 percent in Tokyo after U.S. companies unexpectedly cut jobs last month. BHP Billiton Ltd., the world?s biggest mining company, gained 0.9 percent in Sydney. STX Pan Ocean Co., South Korea?s No. 1 bulk carrier, surged 10 percent in Seoul after shipping rates advanced.
About five shares declined for every four that advanced in the MSCI Asia Pacific Index, which was little changed at 130.04 as of 2 p.m. in Tokyo. The gauge earlier rose to its highest level since August 2008, before the bankruptcy of Lehman Brothers Holdings Inc.
?Sentiment is fairly mixed,? said Shane Oliver, Sydney- based head of investment strategy at AMP Capital Investors Ltd., which manages $85 billion. ?Markets have priced in continuing economic growth and continuing strength in profits, so whenever something negative comes along that questions this, like Samsung, it causes a bit of a setback.?
