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Business24-7 – Six months after their worst drawdown on record, regional stock markets are outperforming the Middle East and North Africa (Mena)-focused hedge funds, suggesting markets are once again warming up to equity participation.
According to Emirates Business research, Mena markets have posted gains of 9.73 per cent on average, beating the 10 region-focused hedge funds, which have posted returns of 4.4 per cent since the beginning of this year.
Even the GCC markets, battered by their exposure to relatively lower oil prices and global economic environment, have turned in a marginally better performance, at 4.42 per cent, suggesting that risk appetite among investors in the regional markets is on the upswing.
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.
Bloomberg – The biggest-ever decline in commodities turned Pierre Andurand and Chris Levett into this year’s heroes for investors.
Andurand’s $1.1 billion BlueGold Capital Management LLP hedge fund in London almost tripled between its February debut and November by betting on higher oil prices in the first half of 2008 and then reversing the strategy, the 31-year-old manager said. Levett’s $3 billion London-based Clive Capital LLP returned 44 percent in the first 11 months of the year.
The first bear market in commodities since 2001, as measured by the UBS Bloomberg CMCI Index, cut investments in raw materials to $144 billion from a peak of $270 billion in the second quarter, Barclays Capital estimates. While the CMCI rose almost fivefold from 2001 to 2008, beating stocks and bonds, commodities measured by the Reuters/Jefferies CRB Index fell 53 percent since June and are heading for the worst year in five decades.
The Australian – US stocks fell as another drop in oil prices and a warning from Toyota Motor underscored the unsparing nature of the slowdown.
Toyota forecast an operating loss for the current year, the first in the car maker’s history. The Japanese giant was thought to have developed a watertight strategy that would yield profits through thick and thin, making it the subject of managerial guides like the 2004 book The Toyota Way.
But the spreading recession caught up on Toyota, too, and it blamed a slump in the global automobile market and a sharp appreciation in the Japanese yen against major currencies for a likely loss. American depositary shares of Toyota fell $US3.50, or 5.45 per cent, to $US60.88.
General Motors was by far the weakest stock on the Dow Jones Industrial Average, falling US97 cents, or 22 per cent, to 3.52. Analysts warned that the Government rescue measure may not be enough to keep the car and truck maker out of bankruptcy court.
