Each business day HedgeCo.Net keeps you informed with the top hedge fund industry news, opinion and insight from around the globe. From the latest hedge fund launches, to the impact of regulation, competition, and investor activism - we track the topics and people that make a difference to you.
New York Times Blogs – Selling a controlling stake in Phibro won’t cut it for Citigroup, Breakingviews writes.
Sure, it would probably quell some of the uproar around the flashpoint that put Citi’s full ownership of Phibro, a commodities trading unit, under public scrutiny: the $100 million bonus due to Phibro’s boss, Andrew J. Hall, this year. But the debate has since moved on to whether such a venture belongs in Citi’s portfolio of businesses at all. That is hard for the bank to justify.
CNBC – The Commodities Futures Trading Commission will seriously consider imposing strict position limits on traders placing bets on energy contracts, and that’s just fine with hedge fund manager Mike Masters.
The head of Masters Capital Management blew the whistle on oil speculators last year when he testified before Congress regarding the rapid run-up in oil prices as it reached its record high of $145 a barrel. He is scheduled to testify at the CFTC hearings Aug. 5.
Masters, whose long/short equity fund manages approximately $1.06 billion according to data provider IPREO, believes stringent limits on commodities trading would work.
HedgeCo.net (West Palm Beach) – Members of Dubai Multi Commodities Centre (DMCC), have been asked to join the commodities community at Jumeirah Lakes Towers (JLT). All member companies, including those awaiting membership approvals, will be brought together to form a physical commodities cluster within the 200-acre JLT free zone community.
According to the announcement, DMCC member companies, which until now have been operating from locations across Dubai, will now be required to relocate to the JLT free zone on completion of the first year of operations. The renewal of licences for existing members currently operating outside the free zone will be linked to their relocation to JLT.
Commenting on the new initiative, Sudhakar Tomar, Managing Director, HAKAN AGRO DMCC, a DMCCA member company, said: “We consider this a wise move. Operating from the JLT Zone as a community will streamline commodities trading activity in Dubai. The free zone advantages and the state-of-the-art facilities are sure to provide a competitive edge to companies.”
(DMCC members have access to the Almas Gold and Diamond vaults, market infrastructure and trading platforms like the Dubai Gold and Commodities Exchange, Dubai Diamond Exchange, Dubai Pearl Exchange, Dubai tea Trading Centre and Dubai Cotton Centre, and a range of commodities backed financial investment tools including Shariah compliant hedge funds and Dubai Gold Securities.)
The move is also in response to the impressive rise in the number of registrations at DMCC and JLT, following the progress in the free zone’s development and the increasing interest from investors to set up offices, DMCCA said.
DMCCA is also working closely with the sub-developers of the Jumeirah Lake Towers project to ensure that the towers and office facilities are completed on schedule, which will help companies finalise their relocation strategy.
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Bloomberg – Kanetsu Asset Management Co. will liquidate hedge funds, including Japan’s best performer last year, as commodities trading shrinks, a company executive said.
The Tokyo-based firm will shut DragonHorse, which according to data provider Eurekahedge Pte returned 27 percent in 2008, the highest among Japan-based hedge funds. Kanetsu Asset will also close two other hedge funds before the firm shuts at the end of March, because computer-driven trading of commodities has become less viable as volumes have declined, President Takashi Ogura said in a telephone interview today.
As many as 920 funds globally may have closed last year, eclipsing the previous record of 848, according to Chicago-based Hedge Fund Research Inc. Japan’s dwindling commodities market and regulatory hurdles to combining commodities trading with financial securities hindered Kanetsu Asset, which had 800 million yen ($8.9 million) in assets.
