Oil Investors betting on crude hitting $82.00 per barrel
European hedge fund believes market for crude oil is oversold as demand picks up
By Andrew Critchlow, Commodities editor
.....
Insch Capital Management, a Swiss hedge fund, is predicting that prices will be trading at about $82 per barrel by the beginning of next year, and already claims the market is oversold.
The Lugano-based fund says it plans to ramp up investments in the sector in prepartion for an expected 50pc uptick in the price of crude by 2016.
.....
[Nine paragraphs in all + plus table].
Monday 22 June 2015
RP CLIENT PRESS RELEASE ON OIL PRICE. 18th June 2015
OIL TO RISE ABOVE $82 PREDICTS SWISS-BASED HEDGE FUND
Insch Capital Management, a Lugano-based alternative investment manager, has formally predicted that Brent Crude Oil will trade above $82 per barrel by February 2016. The prediction forms the conclusion of the June 2015 Insch Oil Report and is based on the analysis of a series of technical, chart-based and fundamental indicators such as Relative Strength Index, Moving Average, Fundamental Analysis of Oil Supply & Demand, and data on the speed and strength of recovery from price lows over the period 1986-present.
Among other portfolios, Insch Capital is the manager of the Insch Black Gold Fund (winner of the 'Commodity Deal of the Year Award' for 2013), a secured investment derived from oil revenues from Canadian oil properties. The Fund is structured to provide an annual return of 9.6% (paid quarterly) with additional returns in favourable market conditions.
The manager said, "We have a number of properties that we are currently considering addint to our portfolio [as a result of our price analysis]. If completed, these acquisitions will substantially increase not only our operating rig count but also our proven reserve. In turn this increase our interest coverage ratio."
Insch Capital Management, a Lugano-based alternative investment manager, has formally predicted that Brent Crude Oil will trade above $82 per barrel by February 2016. The prediction forms the conclusion of the June 2015 Insch Oil Report and is based on the analysis of a series of technical, chart-based and fundamental indicators such as Relative Strength Index, Moving Average, Fundamental Analysis of Oil Supply & Demand, and data on the speed and strength of recovery from price lows over the period 1986-present.
Among other portfolios, Insch Capital is the manager of the Insch Black Gold Fund (winner of the 'Commodity Deal of the Year Award' for 2013), a secured investment derived from oil revenues from Canadian oil properties. The Fund is structured to provide an annual return of 9.6% (paid quarterly) with additional returns in favourable market conditions.
The manager said, "We have a number of properties that we are currently considering addint to our portfolio [as a result of our price analysis]. If completed, these acquisitions will substantially increase not only our operating rig count but also our proven reserve. In turn this increase our interest coverage ratio."
Friday 19 June 2015
RP CLIENT PRESS RELEASE ON PANAMAX POOL - 16th June 2015
PRESS RELEASE – London,
16th June 2015
GMI launches its first
Panamax pool
Global
Maritime Investments (GMI), one of the largest Panamax/Kamsarmax operators in
the world, has announced the launch of its ‘’GMI Panamax Pool’’, including both
Panamax and Kamsarmax class vessels. After almost 10 years of spot market
outperformance and an extensive experience of managing institutional assets,
GMI has opened its doors to shipowners who want to be part of a market beating
commercial management vehicle.
GMI was
established in 2006 to manage institutional assets within the complex and
highly volatile dry-bulk shipping markets. Steve Rodley, GMI’s co-founder said,
‘’Due to the depressed freight environment in the last three years, we’ve been
approached by many shipowners suggesting we launch a pool and help them
maximize their income and optimize fleet utilization. Consolidation, either in
the form of commercial management or corporate mergers, is the only way forward
for the dry-bulk market”.
This seems
to make sense for both GMI and its client owners, since GMI now has ‘owned’
fleet consisting of ships ordered and Time Chartered-In for long period
totalling 13 new Kamsarmax Vessels from Chinese and Japanese yards . In a
market where freight rates are disappointingly low, a network of contacts and
cargo clients has enabled GMI to optimize earnings for its time-chartered fleet
over the past few years. Now, with new investments coming on stream and the
addition of its entire spot-trading fleet in the Pool, GMI’s interests will be
more aligned with its shipowner clients.
Stuart Rae,
GMI’s other co-founder, added “Although we’ve been seeing a lot of
activity in the Supramax/Ultramax segment, a serious Panamax Pool has not
materialized. We think the combination of GMI’s trading track record and the
fact that the business is now more driven by asset optimization, is really
key”.
The GMI Panamax Pool began operations in April, seeded by
GMI’s own Panamax/Kamsarmax ships and already has nine ships signed
up and has received letters of intent from further third-party owners. Discussions are ongoing with a
significant number of other shipowners, with a goal to reach 30 vessels by
the end of 2015 and a further 30 in 2016. With a minimum period of 12 months,
continuous geographic risk monitoring, and the opportunity to convert spot
exposure to a fixed rate from day one, the GMI Panamax Pool offers shipowners a
strong opportunity to maximize returns on their fleets.
RP CLIENT PRESS RELEASE ON LONDON GOLD - 16/6/15
The London Bullion Market Association
Tuesday 16th June 2015
LBMA Gold Price - Bank of China joins as new participant
The LBMA today is pleased to announce that the Bank of China has been approved by ICE Benchmark Administration (IBA) to participate in the LBMA Gold Price auction process, administered by IBA. On 20 March, 2015, IBA successfully transitioned the LBMA Gold Price to an independently administered, transparent and electronic auction process, replacing the former London Gold Fix, which was established in 1919.
The addition of the Bank of China takes the total number of direct participants, who currently participate in the auction process, to eight: Barclays Bank, Bank of China, Goldman Sachs International, HSBC Bank USA NA, JP Morgan, Societe Generale, The Bank of Nova Scotia - ScotiaMocatta and UBS.
Ruth Crowell commented “I am delighted to see the growth in the number of direct participants to the LBMA Gold Price auction process. In particular, I welcome the addition of Bank of China. As one of the LBMA’s founding members, it is appropriate that they should be the first Chinese participant”.
"We are proud to become the first Chinese and Asian bank to participate in the gold auction which is used to determine the LBMA Gold Price.” said Yu SUN, General Manager, Bank of China London Branch & CEO, Bank of China (UK) Limited. “Bank of China joined the LBMA as an initial member in 1987, and has been actively participating in the gold trading business in London for over forty years. Although being the world’s largest gold producer and consumer, China has never played a major role in the global gold fixing. Bank of China’s direct participation in the gold auction would reinforce the connection between the Chinese domestic market and overseas markets, make the international gold price better reflect the supply and demand in China, and help to promote the internationalization of the Chinese gold market.”
IBA operates twice daily, physically settled, electronic and tradable spot gold auctions at 10.30am and 3.00pm UK time. The price formation is in US Dollars (USD), with indicative settlement prices in Euro (EUR) and Pound Sterling (GBP). At the end of the auction IBA publishes the benchmark in USD, EUR and GBP. Since April 1, 2015, the LBMA Gold Price is a regulated benchmark under the supervision of the UK’s Financial Conduct Authority (FCA). The LBMA holds the Intellectual Property (IP) rights for the price.
Tuesday 16th June 2015
LBMA Gold Price - Bank of China joins as new participant
The LBMA today is pleased to announce that the Bank of China has been approved by ICE Benchmark Administration (IBA) to participate in the LBMA Gold Price auction process, administered by IBA. On 20 March, 2015, IBA successfully transitioned the LBMA Gold Price to an independently administered, transparent and electronic auction process, replacing the former London Gold Fix, which was established in 1919.
The addition of the Bank of China takes the total number of direct participants, who currently participate in the auction process, to eight: Barclays Bank, Bank of China, Goldman Sachs International, HSBC Bank USA NA, JP Morgan, Societe Generale, The Bank of Nova Scotia - ScotiaMocatta and UBS.
Ruth Crowell commented “I am delighted to see the growth in the number of direct participants to the LBMA Gold Price auction process. In particular, I welcome the addition of Bank of China. As one of the LBMA’s founding members, it is appropriate that they should be the first Chinese participant”.
"We are proud to become the first Chinese and Asian bank to participate in the gold auction which is used to determine the LBMA Gold Price.” said Yu SUN, General Manager, Bank of China London Branch & CEO, Bank of China (UK) Limited. “Bank of China joined the LBMA as an initial member in 1987, and has been actively participating in the gold trading business in London for over forty years. Although being the world’s largest gold producer and consumer, China has never played a major role in the global gold fixing. Bank of China’s direct participation in the gold auction would reinforce the connection between the Chinese domestic market and overseas markets, make the international gold price better reflect the supply and demand in China, and help to promote the internationalization of the Chinese gold market.”
IBA operates twice daily, physically settled, electronic and tradable spot gold auctions at 10.30am and 3.00pm UK time. The price formation is in US Dollars (USD), with indicative settlement prices in Euro (EUR) and Pound Sterling (GBP). At the end of the auction IBA publishes the benchmark in USD, EUR and GBP. Since April 1, 2015, the LBMA Gold Price is a regulated benchmark under the supervision of the UK’s Financial Conduct Authority (FCA). The LBMA holds the Intellectual Property (IP) rights for the price.
RP CLIENT ARTICLE APPEARING IN FT-SE GLOBAL, JUNE 2015
THE PRICE IS RIGHT
by Christopher Cruden, Managing Director, Insch Capital, Lugano
by Christopher Cruden, Managing Director, Insch Capital, Lugano
On 17th January this year, two days after the
Swiss National Bank had shocked the global foreign exchange markets by abandoning
its self-imposed cap on the Swiss franc’s rate vs the euro, the
long-established Florida-based hedge fund manager Everest Capital announced
that, as a result of losses sustained in the currency turmoil, it was to close
its $830m flagship Global Fund. A little
more than a month later, according to a Reuters
report, Everest’s head, Marco Dimitrijevic, sent a letter to investors
announcing the further closure of six of the firm’s seven remaining funds which
had started the year with combined assets of over $2 billion.
Everest was by no means the only casualty of the SNB’s
decision. Many investment firms were
positioned, as market-speak has it, on the wrong side of the trade, a bad place
to be on a day which saw the value of one Swiss franc rise some 20% against the
euro (with an intraday spike of more than double that) and near catastrophic if
positions were highly geared or leveraged as is frequently the case in the FX
business. (As one of Britain’s senior
hedge fund managers once commented, “You’ll always make money if you use
leverage ... provided you don’t go broke first”).
Shocks of this magnitude are fortunately uncommon in global
FX but they are not unknown: financier George Soros’s $1bn move on 16th
September 1992 to smash the pound out of ‘Exchange Rate Mechanism’ is a case in
point. For the most part, however, the
markets trend rather than spike, are highly liquid (with an estimated daily
turnover of some $4 trillion per day)
and present a large number of attractive trading opportunities.
In short, the FX market is huge, fast and excepting
third-tier or state controlled currencies, very efficient. It’s therefore no surprise that many
(alternative) investment managers of all sizes are tempted to try their hands
at trading currencies but what is or seems strange is how few of these make
genuine and regular profits from their involvement and how many end up as
also-rans and pull out after only a few years.
The answer to this apparent conundrum is quite simply the price i.e. the exchange rate between
any two currencies at a moment in time.
Because the market, as stated, is highly liquid, it’s fair, indeed
necessary for success, to see the price as the sum of the world’s knowledge at
that particular microsecond. Any other analysis
which distances one from the price, for example of volumes or the open interest
in futures markets, is I would argue a distraction rather than a help. There are no dividends in these markets, no
yields, takeovers, mergers or redemptions.
And while currency forecasting is an important sub-set of the job of an
economist, few if any good investment managers are brave enough to apply such
predictions to the business of intraday trading and fewer still survive for any
length of time if they try it.
Instead, the great currency managers employ formally constructed,
durable and usually simple algorithms.
There’s a lot of excitement, even among savvy institutional
investors, about so-called ‘algo-trading’ but, in reality, all that is
happening here is that a computer is generating trading signals by
systematically applying a concise set of rules which have been honed and tested
over the long-term, employing advanced statistical analysis before being
applied to the markets for real.
The trick is constancy.
Any attempt to second-guess the algorithms, once proved, is inevitably
doomed. The set of rules should only be
modified when the evolution of the markets demands
a change not when temporary circumstances suggest it might be a good idea. Regular tinkering intended to improve algorithms
automatically destroys a systematic approach and if an investment strategy is
not applied systematically it is, by definition, random.
An example from the equity markets is illustrative
here. If one investigates the methodology
for the S&P Indices (easily available on the internet), it’s clear there
are about 17 criteria but only about seven formal rules that define an index’s
construction yet, at the same time, the flagship S&P 100 index outperforms
as many as 80% of the investment managers who use it as a performance
benchmark.
If regular ‘improvements’ to trading algorithms do boost
returns, the manager is, again by definition, lucky. Experience shows that such luck will not hold
given this, the most important of all trading rules: “The markets do not exist
for personal enrichment but to teach humility which they do with crushing
regularity”.
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