NEWS - Commodites, Agriculture, Green Investment - NEWS
3/02/2008
Speculators Driving the Ag Market? Not!
Written by Julian Murdoch
February 19, 2008 12:00 AM EST
Page 1 of 3
Pick a chart in the agricultural world (say, wheat) and it's obvious that something's going on. With wheat rising so fast they're resetting the circuit breakers, the conventional wisdom lays the blame on the growth of exchange-traded funds (ETFs) and other passive commodity indexes: Investors are buying long, and staying long, and that's skewing the market.
With this as background, consider the November proposal by the Commodity Futures Trading Commission (CFTC) on increasing the levels for speculative position limits in agricultural futures. The public comment period ended in late January, and sources have told us that comments seem to have been overwhelmingly negative. The proposed rule limit would increase single month and all-month speculative position limits (the number of contracts a "trader" can hold) for most agricultural commodities.
Who Cares?
On the surface, there's a valid reason for concern. Increasing the speculative position limits would theoretically leave the market open to increased risk of big firms coming in and cornering the market in say, wheat futures. Virtually everyone we talked to in the grain industry believes that speculative money has already played a large role in the all-time high prices that many grains, such as wheat and corn, have been experiencing in the past year. If true, then increasing the trading limits would let in more noncommercial money—possibly to the detriment of companies who use futures for their "legitimate" purpose, as a hedging tool to decrease business risk.
Grain processors use hedging as a way to spread out their risk—they purchase futures contracts in order to lock in prices for grain that they will need in the coming months. When investors play, they almost exclusively hold long-only positions, and thus bid up those contracts. Grain processors end up paying more than they (theoretically) would have if these financial players weren't in the market. After all, even though a futures contract is derivative of an underlying good, it is in and of itself a good subject to demand pressures. So in this time of rising spot prices, not only are the futures going up, but the whole curve is shifting up. Higher prices lead to higher margin requirements. The National Grain and Feed Association—an industry group made up of a wide range of grain industry participants from people dealing with physical storage and processing of grain to commodity brokers, banks and transportation companies—recently released a number of statements highlighting the possible problems associated with the proposed rule changes.
"Such traditional hedgers have seen a dramatic increase in recent months in the amount of money needed to finance margin requirements on outstanding futures contracts."
"In this environment, the marketplace is ill-equipped to efficiently absorb more investment capital and perform its core function of serving as an efficient tool for businesses hedging physical grain purchases, particularly when virtually all of that investment capital is long-only and a large share of open interest essentially is 'not for sale' for long periods of time."
"The lack of convergence between cash and futures markets during the delivery period, in conjunction with rapidly rising commodity values, has created huge borrowing needs and financial risks and exposure for the grain-buying industry," the NGFA said in a statement submitted to the CFTC. "As banks have begun to question hedging performance in futures positions, borrowing lines have been stretched to the limit or beyond…Cash basis levels [the difference between futures and cash market prices for a specific commodity] are widening to reflect much higher financing costs—to the extent financing is even available—that now are being forced into the system."
"Both the overall confidence in the [futures] market and the livelihood and business structure of the cash grain industry are at stake." Four different ways of saying "the sky is falling," which, if you're someone who has to buy grain for a living, it must indeed seem to be.
Four different ways of saying “the sky is falling,” which, if you’re someone who has to buy grain for a living, it must indeed seem to be.
What happens to a market when the people who physically store the commodity and need it for their business are unable to compete with the big bucks from Wall Street? These are not huge oil conglomerates that have become accustomed to an environment of rapid price changes driven by politics. The grain markets, while volatile, have historically been much more a traditional hedging market, and less a financial battleground. If you're on the buy side of wheat, it must seem like a whole new world out there.
On The Other Hand
But wait a minute. Pretty much everyone can see (even me, and I'm far from the smartest money in the game) that the grain market fundamentals are tight. Between the effects of biofuels on crop planting and usage, increased demand for feed grains to satisfy increased demand for beef and poultry, and adverse weather shocks elsewhere on global crops such as wheat, it is no wonder that we are seeing prices at all-time highs.
If this were really the result of all these ETFs buying into rising prices, we'd expect to see it in the exchange numbers, right? But check out the Commitment of Traders reports (COT) for the last year. This is the data that's supposed to tell us exactly this.
If it is indeed the influx of Wall Street money that is responsible for the rise in prices, you would expect to see an increase in holdings and/or the numbers of index traders participating in the market. It isn't there—at least not in these stats. The percentage of open interest these "index traders" have been holding has stayed roughly the same since the COT started splitting out the information in a supplemental report in January 2007.
Ok, so what's an index trader? Well, in a rare moment of clarity, CFTC calls them folks who "managed funds, pension funds, and other investors that are generally seeking exposure to a broad index of commodity prices as an asset class in an unleveraged and passively managed manner." They also toss in firms that engaged in derivative trading (swaps really) based on broad indexes, for whom a particular contract is just part of a big-picture strategy. You'd expect this to be the lair in which the bogeyman is living. Well …
… the truth is, bullpucky. The real growth—in numbers of participants—in the markets has been commercial traders. Commercial traders are the ones who are supposedly doing legitimate hedging. The number of "index traders" has remained the same in the past year.
In other words, the long, passive money has stayed pretty much the same no matter how you look at it, either as a percentage of the market, or as a number-of-players.
Of course, the CFTC doesn't give us juicy details. They don't specify who exactly those noncommercial traders are, and it could well be that some traders are being captured in the wrong category—which is what many in the industry think is happening. But until the stats are fixed, we won't know for sure. The rise in participation for commercial traders is logical—with prices and the market behaving as it has been, it is in the commercial traders' best interests to be part of the market. In fact, you'd expect the commercial traders to be the savviest folks in the virtual pits: After all, they've got the closest thing to inside information. They actually have to use the stuff. Higher prices lead to higher margin requirements. The National Grain and Feed Association—an industry group made up of a wide range of grain industry participants from people dealing with physical storage and processing of grain to commodity brokers, banks and transportation companies—recently released a number of statements highlighting the possible problems associated with the proposed rule changes.
"Such traditional hedgers have seen a dramatic increase in recent months in the amount of money needed to finance margin requirements on outstanding futures contracts."
"In this environment, the marketplace is ill-equipped to efficiently absorb more investment capital and perform its core function of serving as an efficient tool for businesses hedging physical grain purchases, particularly when virtually all of that investment capital is long-only and a large share of open interest essentially is 'not for sale' for long periods of time."
"The lack of convergence between cash and futures markets during the delivery period, in conjunction with rapidly rising commodity values, has created huge borrowing needs and financial risks and exposure for the grain-buying industry," the NGFA said in a statement submitted to the CFTC. "As banks have begun to question hedging performance in futures positions, borrowing lines have been stretched to the limit or beyond…Cash basis levels [the difference between futures and cash market prices for a specific commodity] are widening to reflect much higher financing costs—to the extent financing is even available—that now are being forced into the system."
"Both the overall confidence in the [futures] market and the livelihood and business structure of the cash grain industry are at stake." Four different ways of saying "the sky is falling," which, if you're someone who has to buy grain for a living, it must indeed seem to be.
Four different ways of saying “the sky is falling,” which, if you’re someone who has to buy grain for a living, it must indeed seem to be.
What happens to a market when the people who physically store the commodity and need it for their business are unable to compete with the big bucks from Wall Street? These are not huge oil conglomerates that have become accustomed to an environment of rapid price changes driven by politics. The grain markets, while volatile, have historically been much more a traditional hedging market, and less a financial battleground. If you're on the buy side of wheat, it must seem like a whole new world out there.
On The Other Hand
But wait a minute. Pretty much everyone can see (even me, and I'm far from the smartest money in the game) that the grain market fundamentals are tight. Between the effects of biofuels on crop planting and usage, increased demand for feed grains to satisfy increased demand for beef and poultry, and adverse weather shocks elsewhere on global crops such as wheat, it is no wonder that we are seeing prices at all-time highs.
If this were really the result of all these ETFs buying into rising prices, we'd expect to see it in the exchange numbers, right? But check out the Commitment of Traders reports (COT) for the last year. This is the data that's supposed to tell us exactly this.
If it is indeed the influx of Wall Street money that is responsible for the rise in prices, you would expect to see an increase in holdings and/or the numbers of index traders participating in the market. It isn't there—at least not in these stats. The percentage of open interest these "index traders" have been holding has stayed roughly the same since the COT started splitting out the information in a supplemental report in January 2007.
Ok, so what's an index trader? Well, in a rare moment of clarity, CFTC calls them folks who "managed funds, pension funds, and other investors that are generally seeking exposure to a broad index of commodity prices as an asset class in an unleveraged and passively managed manner." They also toss in firms that engaged in derivative trading (swaps really) based on broad indexes, for whom a particular contract is just part of a big-picture strategy. You'd expect this to be the lair in which the bogeyman is living. Well …
… the truth is, bullpucky. The real growth—in numbers of participants—in the markets has been commercial traders. Commercial traders are the ones who are supposedly doing legitimate hedging. The number of "index traders" has remained the same in the past year.
In other words, the long, passive money has stayed pretty much the same no matter how you look at it, either as a percentage of the market, or as a number-of-players.
Of course, the CFTC doesn't give us juicy details. They don't specify who exactly those noncommercial traders are, and it could well be that some traders are being captured in the wrong category—which is what many in the industry think is happening. But until the stats are fixed, we won't know for sure. The rise in participation for commercial traders is logical—with prices and the market behaving as it has been, it is in the commercial traders' best interests to be part of the market. In fact, you'd expect the commercial traders to be the savviest folks in the virtual pits: After all, they've got the closest thing to inside information. They actually have to use the stuff.
February 19, 2008 12:00 AM EST
Page 1 of 3
Pick a chart in the agricultural world (say, wheat) and it's obvious that something's going on. With wheat rising so fast they're resetting the circuit breakers, the conventional wisdom lays the blame on the growth of exchange-traded funds (ETFs) and other passive commodity indexes: Investors are buying long, and staying long, and that's skewing the market.
With this as background, consider the November proposal by the Commodity Futures Trading Commission (CFTC) on increasing the levels for speculative position limits in agricultural futures. The public comment period ended in late January, and sources have told us that comments seem to have been overwhelmingly negative. The proposed rule limit would increase single month and all-month speculative position limits (the number of contracts a "trader" can hold) for most agricultural commodities.
Who Cares?
On the surface, there's a valid reason for concern. Increasing the speculative position limits would theoretically leave the market open to increased risk of big firms coming in and cornering the market in say, wheat futures. Virtually everyone we talked to in the grain industry believes that speculative money has already played a large role in the all-time high prices that many grains, such as wheat and corn, have been experiencing in the past year. If true, then increasing the trading limits would let in more noncommercial money—possibly to the detriment of companies who use futures for their "legitimate" purpose, as a hedging tool to decrease business risk.
Grain processors use hedging as a way to spread out their risk—they purchase futures contracts in order to lock in prices for grain that they will need in the coming months. When investors play, they almost exclusively hold long-only positions, and thus bid up those contracts. Grain processors end up paying more than they (theoretically) would have if these financial players weren't in the market. After all, even though a futures contract is derivative of an underlying good, it is in and of itself a good subject to demand pressures. So in this time of rising spot prices, not only are the futures going up, but the whole curve is shifting up. Higher prices lead to higher margin requirements. The National Grain and Feed Association—an industry group made up of a wide range of grain industry participants from people dealing with physical storage and processing of grain to commodity brokers, banks and transportation companies—recently released a number of statements highlighting the possible problems associated with the proposed rule changes.
"Such traditional hedgers have seen a dramatic increase in recent months in the amount of money needed to finance margin requirements on outstanding futures contracts."
"In this environment, the marketplace is ill-equipped to efficiently absorb more investment capital and perform its core function of serving as an efficient tool for businesses hedging physical grain purchases, particularly when virtually all of that investment capital is long-only and a large share of open interest essentially is 'not for sale' for long periods of time."
"The lack of convergence between cash and futures markets during the delivery period, in conjunction with rapidly rising commodity values, has created huge borrowing needs and financial risks and exposure for the grain-buying industry," the NGFA said in a statement submitted to the CFTC. "As banks have begun to question hedging performance in futures positions, borrowing lines have been stretched to the limit or beyond…Cash basis levels [the difference between futures and cash market prices for a specific commodity] are widening to reflect much higher financing costs—to the extent financing is even available—that now are being forced into the system."
"Both the overall confidence in the [futures] market and the livelihood and business structure of the cash grain industry are at stake." Four different ways of saying "the sky is falling," which, if you're someone who has to buy grain for a living, it must indeed seem to be.
Four different ways of saying “the sky is falling,” which, if you’re someone who has to buy grain for a living, it must indeed seem to be.
What happens to a market when the people who physically store the commodity and need it for their business are unable to compete with the big bucks from Wall Street? These are not huge oil conglomerates that have become accustomed to an environment of rapid price changes driven by politics. The grain markets, while volatile, have historically been much more a traditional hedging market, and less a financial battleground. If you're on the buy side of wheat, it must seem like a whole new world out there.
On The Other Hand
But wait a minute. Pretty much everyone can see (even me, and I'm far from the smartest money in the game) that the grain market fundamentals are tight. Between the effects of biofuels on crop planting and usage, increased demand for feed grains to satisfy increased demand for beef and poultry, and adverse weather shocks elsewhere on global crops such as wheat, it is no wonder that we are seeing prices at all-time highs.
If this were really the result of all these ETFs buying into rising prices, we'd expect to see it in the exchange numbers, right? But check out the Commitment of Traders reports (COT) for the last year. This is the data that's supposed to tell us exactly this.
If it is indeed the influx of Wall Street money that is responsible for the rise in prices, you would expect to see an increase in holdings and/or the numbers of index traders participating in the market. It isn't there—at least not in these stats. The percentage of open interest these "index traders" have been holding has stayed roughly the same since the COT started splitting out the information in a supplemental report in January 2007.
Ok, so what's an index trader? Well, in a rare moment of clarity, CFTC calls them folks who "managed funds, pension funds, and other investors that are generally seeking exposure to a broad index of commodity prices as an asset class in an unleveraged and passively managed manner." They also toss in firms that engaged in derivative trading (swaps really) based on broad indexes, for whom a particular contract is just part of a big-picture strategy. You'd expect this to be the lair in which the bogeyman is living. Well …
… the truth is, bullpucky. The real growth—in numbers of participants—in the markets has been commercial traders. Commercial traders are the ones who are supposedly doing legitimate hedging. The number of "index traders" has remained the same in the past year.
In other words, the long, passive money has stayed pretty much the same no matter how you look at it, either as a percentage of the market, or as a number-of-players.
Of course, the CFTC doesn't give us juicy details. They don't specify who exactly those noncommercial traders are, and it could well be that some traders are being captured in the wrong category—which is what many in the industry think is happening. But until the stats are fixed, we won't know for sure. The rise in participation for commercial traders is logical—with prices and the market behaving as it has been, it is in the commercial traders' best interests to be part of the market. In fact, you'd expect the commercial traders to be the savviest folks in the virtual pits: After all, they've got the closest thing to inside information. They actually have to use the stuff. Higher prices lead to higher margin requirements. The National Grain and Feed Association—an industry group made up of a wide range of grain industry participants from people dealing with physical storage and processing of grain to commodity brokers, banks and transportation companies—recently released a number of statements highlighting the possible problems associated with the proposed rule changes.
"Such traditional hedgers have seen a dramatic increase in recent months in the amount of money needed to finance margin requirements on outstanding futures contracts."
"In this environment, the marketplace is ill-equipped to efficiently absorb more investment capital and perform its core function of serving as an efficient tool for businesses hedging physical grain purchases, particularly when virtually all of that investment capital is long-only and a large share of open interest essentially is 'not for sale' for long periods of time."
"The lack of convergence between cash and futures markets during the delivery period, in conjunction with rapidly rising commodity values, has created huge borrowing needs and financial risks and exposure for the grain-buying industry," the NGFA said in a statement submitted to the CFTC. "As banks have begun to question hedging performance in futures positions, borrowing lines have been stretched to the limit or beyond…Cash basis levels [the difference between futures and cash market prices for a specific commodity] are widening to reflect much higher financing costs—to the extent financing is even available—that now are being forced into the system."
"Both the overall confidence in the [futures] market and the livelihood and business structure of the cash grain industry are at stake." Four different ways of saying "the sky is falling," which, if you're someone who has to buy grain for a living, it must indeed seem to be.
Four different ways of saying “the sky is falling,” which, if you’re someone who has to buy grain for a living, it must indeed seem to be.
What happens to a market when the people who physically store the commodity and need it for their business are unable to compete with the big bucks from Wall Street? These are not huge oil conglomerates that have become accustomed to an environment of rapid price changes driven by politics. The grain markets, while volatile, have historically been much more a traditional hedging market, and less a financial battleground. If you're on the buy side of wheat, it must seem like a whole new world out there.
On The Other Hand
But wait a minute. Pretty much everyone can see (even me, and I'm far from the smartest money in the game) that the grain market fundamentals are tight. Between the effects of biofuels on crop planting and usage, increased demand for feed grains to satisfy increased demand for beef and poultry, and adverse weather shocks elsewhere on global crops such as wheat, it is no wonder that we are seeing prices at all-time highs.
If this were really the result of all these ETFs buying into rising prices, we'd expect to see it in the exchange numbers, right? But check out the Commitment of Traders reports (COT) for the last year. This is the data that's supposed to tell us exactly this.
If it is indeed the influx of Wall Street money that is responsible for the rise in prices, you would expect to see an increase in holdings and/or the numbers of index traders participating in the market. It isn't there—at least not in these stats. The percentage of open interest these "index traders" have been holding has stayed roughly the same since the COT started splitting out the information in a supplemental report in January 2007.
Ok, so what's an index trader? Well, in a rare moment of clarity, CFTC calls them folks who "managed funds, pension funds, and other investors that are generally seeking exposure to a broad index of commodity prices as an asset class in an unleveraged and passively managed manner." They also toss in firms that engaged in derivative trading (swaps really) based on broad indexes, for whom a particular contract is just part of a big-picture strategy. You'd expect this to be the lair in which the bogeyman is living. Well …
… the truth is, bullpucky. The real growth—in numbers of participants—in the markets has been commercial traders. Commercial traders are the ones who are supposedly doing legitimate hedging. The number of "index traders" has remained the same in the past year.
In other words, the long, passive money has stayed pretty much the same no matter how you look at it, either as a percentage of the market, or as a number-of-players.
Of course, the CFTC doesn't give us juicy details. They don't specify who exactly those noncommercial traders are, and it could well be that some traders are being captured in the wrong category—which is what many in the industry think is happening. But until the stats are fixed, we won't know for sure. The rise in participation for commercial traders is logical—with prices and the market behaving as it has been, it is in the commercial traders' best interests to be part of the market. In fact, you'd expect the commercial traders to be the savviest folks in the virtual pits: After all, they've got the closest thing to inside information. They actually have to use the stuff.
Covering Carbon Credit Projects Via Political Risk Insurance
Author: Steve McKay
Date: 2008-02-21
Zurich yesterday announced it is providing political risk insurance (PRI) for carbon credit projects. This is the first time Zurich has offered coverage for these types of “green” projects in emerging markets, reflecting the Group’s recently launched global climate initiative focusing on the myriad of risks associated with climate change.
Zurich yesterday announced it is providing political risk insurance (PRI) for carbon credit projects. This is the first time Zurich has offered coverage for these types of “green” projects in emerging markets, reflecting the Group’s recently launched global climate initiative focusing on the myriad of risks associated with climate change.
Under the Kyoto protocol – an international treaty created to reduce greenhouse gas (GHG) emissions linked to global warming – certain types of projects are eligible for carbon credits based on the level of greenhouse gases reduced.
The carbon credit market – currently estimated to be USD 60 billion – has doubled during the last two years. The protocol provides the means to monetize the environmental benefits of reducing GHGs and sell the emissions credits. Zurich’s policy helps to protect against risk of host government actions that might prevent an investor from receiving benefits associated with emission credits generated.
“Our involvement with carbon credit projects highlights the role of political risk coverage in helping make these projects more attractive to investors who are concerned about political risk and market volatility,” said Daniel Riordan, executive vice president and managing director for Zurich’s emerging markets unit. “As financial incentives for carbon projects become more common in the advent of emissions trading, we anticipate seeing more investments in emerging markets.”
Zurich is a market leader providing political risk and trade credit insurance on a global basis. More than 300 of the world’s leading companies – including financial institutions, multinational corporations, investors, exporters and infrastructure developers – are supported from Zurich offices in Washington D.C., Barcelona, Frankfurt, Hong Kong, London, Paris, Sydney and Tokyo. All policies are backed by the financial strength of Zurich Financial Services Group with ratings of AA- from Standard & Poor’s.
Zurich is a member of the Berne Union (BU) – an international union of credit and investment insurers – and often coinsures and reinsures with fellow BU members that are export credit agencies and multilateral institutions.
Zurich’s recently launched climate initiative has a three-pillar approach. First, Zurich has established an internal Climate Office that is charged with driving an understanding of climate-related risks across its businesses and is fully embedded in Zurich’s underwriting infrastructure. Second, Zurich has established a Climate Change Advisory Council that will directly report to Zurich’s Group Management on strategic and operational issues associated with climate change. Third, as part of the climate initiative Zurich launched an applied research program with organizations and institutions to examine the critical economic, finance and policy issues associated with climate change.
The main objective of Zurich’s market-focused global climate change initiative is to understand the emerging weather, financial and regulatory risks associated with climate change and to develop products and services that allow customers to cope with these risks.
Source: RiskCenter.com
Date: 2008-02-21
Zurich yesterday announced it is providing political risk insurance (PRI) for carbon credit projects. This is the first time Zurich has offered coverage for these types of “green” projects in emerging markets, reflecting the Group’s recently launched global climate initiative focusing on the myriad of risks associated with climate change.
Zurich yesterday announced it is providing political risk insurance (PRI) for carbon credit projects. This is the first time Zurich has offered coverage for these types of “green” projects in emerging markets, reflecting the Group’s recently launched global climate initiative focusing on the myriad of risks associated with climate change.
Under the Kyoto protocol – an international treaty created to reduce greenhouse gas (GHG) emissions linked to global warming – certain types of projects are eligible for carbon credits based on the level of greenhouse gases reduced.
The carbon credit market – currently estimated to be USD 60 billion – has doubled during the last two years. The protocol provides the means to monetize the environmental benefits of reducing GHGs and sell the emissions credits. Zurich’s policy helps to protect against risk of host government actions that might prevent an investor from receiving benefits associated with emission credits generated.
“Our involvement with carbon credit projects highlights the role of political risk coverage in helping make these projects more attractive to investors who are concerned about political risk and market volatility,” said Daniel Riordan, executive vice president and managing director for Zurich’s emerging markets unit. “As financial incentives for carbon projects become more common in the advent of emissions trading, we anticipate seeing more investments in emerging markets.”
Zurich is a market leader providing political risk and trade credit insurance on a global basis. More than 300 of the world’s leading companies – including financial institutions, multinational corporations, investors, exporters and infrastructure developers – are supported from Zurich offices in Washington D.C., Barcelona, Frankfurt, Hong Kong, London, Paris, Sydney and Tokyo. All policies are backed by the financial strength of Zurich Financial Services Group with ratings of AA- from Standard & Poor’s.
Zurich is a member of the Berne Union (BU) – an international union of credit and investment insurers – and often coinsures and reinsures with fellow BU members that are export credit agencies and multilateral institutions.
Zurich’s recently launched climate initiative has a three-pillar approach. First, Zurich has established an internal Climate Office that is charged with driving an understanding of climate-related risks across its businesses and is fully embedded in Zurich’s underwriting infrastructure. Second, Zurich has established a Climate Change Advisory Council that will directly report to Zurich’s Group Management on strategic and operational issues associated with climate change. Third, as part of the climate initiative Zurich launched an applied research program with organizations and institutions to examine the critical economic, finance and policy issues associated with climate change.
The main objective of Zurich’s market-focused global climate change initiative is to understand the emerging weather, financial and regulatory risks associated with climate change and to develop products and services that allow customers to cope with these risks.
Source: RiskCenter.com
Energy Firm To Launch Water Strat
21 Feb 2008
RNK Capital, with $1.2 billion under management, on March 1 will launch the Grey2O Fund, a long/short equity strategy. It will invest in companies focused on water utilities, infrastructure, pipeline, equipment and water treatment, including companies that make desalination machines. There are an estimated 10-20 similar funds globally, most of which are based in Europe, making the New York-based firm’s launch stand out.
“Water is where carbon was five-to-seven years ago,” said a money manager. “It’s way undervalued and that won’t last forever.” Moreover, unlike most water-focused funds, the Grey2O fund will have 25% of its portfolio in companies that are solely related to water.
The fund has 2/20 fees with an investment minimum of $1 million. Goldman Sachs is the prime broker. RNK runs several energy- and technology-focused strategies, all managed by Founder Robert Koltun, who will also manage this fund. Before founding the firm, he was a director at hedge fund firm LRL Capital Partners.
—Suzy Kenly
RNK Capital, with $1.2 billion under management, on March 1 will launch the Grey2O Fund, a long/short equity strategy. It will invest in companies focused on water utilities, infrastructure, pipeline, equipment and water treatment, including companies that make desalination machines. There are an estimated 10-20 similar funds globally, most of which are based in Europe, making the New York-based firm’s launch stand out.
“Water is where carbon was five-to-seven years ago,” said a money manager. “It’s way undervalued and that won’t last forever.” Moreover, unlike most water-focused funds, the Grey2O fund will have 25% of its portfolio in companies that are solely related to water.
The fund has 2/20 fees with an investment minimum of $1 million. Goldman Sachs is the prime broker. RNK runs several energy- and technology-focused strategies, all managed by Founder Robert Koltun, who will also manage this fund. Before founding the firm, he was a director at hedge fund firm LRL Capital Partners.
—Suzy Kenly
LCH.Clearnet Announces Launch Date For OTC Emissions Clearing
25/02/08
LCH.Clearnet is pleased to announce that it will launch OTC clearing services for Certified Emissions Reduction (CER) and EU Allowance contracts on Friday 29 February 2008. These new cost efficient services will offer direct clearing of CER and EUA trades executed on the OTC market.
The standardised physically delivered contracts will be settled against London Energy Brokers Association (LEBA) end-of-day prices with appropriate margin offset being granted between the two contracts. Contracts will be based on December delivery and will cover the period 2008 to 2012.
Roger Liddell, Chief Executive at LCH.Clearnet, said: “The current period of heightened market volatility only serves to highlight the importance of clearing for this significant sector of the market. We look forward to a successful launch and continued work with the OTC broking community to further enhance this service offering in the future.”
Stewart Lloyd-Jones, Chief Executive at LEBA, added: “LEBA is delighted to work with LCH.Clearnet in the provision of cleared CER and EUA OTC contracts. This service will allow for margin offsetting between the two contracts, and we believe will provide still further momentum and opportunities for market participants in the rapidly expanding carbon markets.”
LCH.Clearnet is pleased to announce that it will launch OTC clearing services for Certified Emissions Reduction (CER) and EU Allowance contracts on Friday 29 February 2008. These new cost efficient services will offer direct clearing of CER and EUA trades executed on the OTC market.
The standardised physically delivered contracts will be settled against London Energy Brokers Association (LEBA) end-of-day prices with appropriate margin offset being granted between the two contracts. Contracts will be based on December delivery and will cover the period 2008 to 2012.
Roger Liddell, Chief Executive at LCH.Clearnet, said: “The current period of heightened market volatility only serves to highlight the importance of clearing for this significant sector of the market. We look forward to a successful launch and continued work with the OTC broking community to further enhance this service offering in the future.”
Stewart Lloyd-Jones, Chief Executive at LEBA, added: “LEBA is delighted to work with LCH.Clearnet in the provision of cleared CER and EUA OTC contracts. This service will allow for margin offsetting between the two contracts, and we believe will provide still further momentum and opportunities for market participants in the rapidly expanding carbon markets.”
Osborne's worthless gem
By Andrew Hill
Published: February 26 2008 02:00 | Last updated: February 26 2008 02:00
Opposition politicians are obliged to come up with flashy ideas, but there is little real sparkle to the latest Conservative proposal: the world's first green technology trading market - inevitably dubbed "Gem", for Green Environmental Market.
George Osborne, shadow chancellor, will launch the idea tomorrow in a speech. The thought underpinning it is a fair one: why not improve the incentives for investment in green technology, through a combination of fiscal and regulatory measures? In the process, London could become the "undisputed leader in green finance", rivalling Silicon Valley, where, Mr Osborne says, a quarter of new venture capital investment is directed at eco-technology.
But there is a reason why such a market would be unique: if rival financial centres have considered it, they have probably dismissed it.
One of the big attractions of Aim, off which Gem would feed, is its breadth. It houses everything from oil companies to retailers. Some 50 environmental technology companies are already traded there.
Pushing them into a separate market might help catch a wave of investor interest. But specialisation is a double-edged sword. When investors moved on, as they undoubtedly would, Gem's gleam would fade very quickly. When the technology bubble burst in 2000, that is what happened to Nasdaq and Germany's Neuer Markt, which went from "tech-fuelled" to "tech-laden" in short order.
Stanley Fink, deputy chairman of Man Group, the hedge fund manager, has agreed to lead a Gem working group, with the London Stock Exchange providing expert support. That should give the discussions weight. But the group's mandate is to come up with "implementable" plans. Streamlining planning permission for green projects, improving incentives for green companies - these are proposals worth debating. A distinct green technology market is not.
andrew.hill@ft.com To comment, visit www.ft.com/lombard
Copyright The Financial Times Limited 2008
Published: February 26 2008 02:00 | Last updated: February 26 2008 02:00
Opposition politicians are obliged to come up with flashy ideas, but there is little real sparkle to the latest Conservative proposal: the world's first green technology trading market - inevitably dubbed "Gem", for Green Environmental Market.
George Osborne, shadow chancellor, will launch the idea tomorrow in a speech. The thought underpinning it is a fair one: why not improve the incentives for investment in green technology, through a combination of fiscal and regulatory measures? In the process, London could become the "undisputed leader in green finance", rivalling Silicon Valley, where, Mr Osborne says, a quarter of new venture capital investment is directed at eco-technology.
But there is a reason why such a market would be unique: if rival financial centres have considered it, they have probably dismissed it.
One of the big attractions of Aim, off which Gem would feed, is its breadth. It houses everything from oil companies to retailers. Some 50 environmental technology companies are already traded there.
Pushing them into a separate market might help catch a wave of investor interest. But specialisation is a double-edged sword. When investors moved on, as they undoubtedly would, Gem's gleam would fade very quickly. When the technology bubble burst in 2000, that is what happened to Nasdaq and Germany's Neuer Markt, which went from "tech-fuelled" to "tech-laden" in short order.
Stanley Fink, deputy chairman of Man Group, the hedge fund manager, has agreed to lead a Gem working group, with the London Stock Exchange providing expert support. That should give the discussions weight. But the group's mandate is to come up with "implementable" plans. Streamlining planning permission for green projects, improving incentives for green companies - these are proposals worth debating. A distinct green technology market is not.
andrew.hill@ft.com To comment, visit www.ft.com/lombard
Copyright The Financial Times Limited 2008
Commerzbank bets big on commodities for 2008
* Reuters
* Tuesday February 26 2008
By Amanda Cooper
LONDON, Feb 26 (Reuters) - Commerzbank money managers believe the explosive rally in commodity prices ranging from wheat to gold will make this the top performing sector of 2008 and have positioned their largest fund of funds accordingly.
In light of the uncertainty over the global economic outlook and the ongoing difficulties in the credit markets, Commerzbank's Alternative Investment Group, which manages $540 million, is avoiding too much exposure to any one asset class.
But the stellar rise in the price of commodities from wheat to gold in the last two years, along with share-boosting merger and acquisition activity in the basic resources sector has made commodities the play for 2008.
"Within the equities space, we've been trying to find managers who are actively managing the whole commodities complex. That is one area of equity exposure that has been maintained or increased versus a year ago," said Michael Kane, a senior portfolio manager for the fund of funds -- an investment vehicle which holds other funds in its portfolio rather than individual assets.
Severe drought in many parts of the crop-growing world and booming levels of consumption in emerging economies have pushed the price of basic foodstuffs such as wheat, soybeans and corn to record highs.
Adding to this is the development of green fuel technology that has unleashed record demand for a variety of soft commodities such as grains, vegetable oils and sugar to convert into biofuel -- a potential substitute for traditional fossil fuels.
"The one that is really in play at the moment is anything related to food," said fellow senior portfolio manager Edward Hands.
"The reason they go up together is because they're all fighting for acreage. You can increase the supply of arable land slowly either by taking conservation land off line and turning it into arable land but all this tends to be rather marginal land."
He said adding crop yields in these areas tended to be poor, while years of intense use of pesticides and other chemicals had degraded top soils in other more fertile parts of the globe.
"Nobody has really kept their eye on that ... all of a sudden, we've had a drought for wheat, we've got biofuel demand for corn and sugar and suddenly inventories are down and everybody is getting worried and that means higher prices."
"I think they're in play and I think they will be the top performing asset class this year."
Among the so-called hard commodities, gold and platinum have hit record highs this year as demand from hedge funds and consumers such as jewellers or chemical companies alike has flourished.
Gold, which has soared by 80 percent in the last two years, has also benefited from the shift in interest-rate and inflation expectations, while platinum, which has doubled in value in that time, has seen unprecedented interest from hedge funds.
The entire commodities was languishing in a 20-year bear market until about three years ago, depressed by a glut of supply and erratic demand. Mining companies in particular curtailed production capacity and froze expansion plans in order to survive.
Now that demand has reignited, many companies are struggling just to keep up.
That said, in the current environment of heightened volatility, Commerzbank's fund of funds is wary of betting too heavily in one direction or one asset class, be that shorting, or selling U.S. mortgage-backed securities, or adding commodities-heavy funds to its portfolio.
"We are a little hesitant to put new money to work, finding good investments and good managers with a good outlook for the next six to 12 months is difficult at this time," Kane said.
"We've also focussed on hedge fund managers with experience, we're not really focussing on new launches ... and tended to focus on more traditional equity hedge fund managers with low net exposures who've lived through tough market conditions before," he said.
Ultimately, the fate of the equity markets is linked with that of the investment banks and their ability to revive the credit markets and shift some of the battered subprime-linked assets from their books.
Tough credit conditions and soaring prices for anything from gasoline to milk must prompt a shift in thinking among individuals as well as the investment community.
"The prevailing theme ... I think is how much people's incomes in the Western world get eaten up by the basic essentials in life and how people will be forced to review their lifestyle," Hands said.
"Related to that is the credit unwind," Kane said. "Whether it is at an individual level .. or on the banking side, credit tightening has happened in an abrupt way in the fourth quarter and I don't see it ramping up again aggressively in the near future." (Editing by Jason Neely)
* Tuesday February 26 2008
By Amanda Cooper
LONDON, Feb 26 (Reuters) - Commerzbank money managers believe the explosive rally in commodity prices ranging from wheat to gold will make this the top performing sector of 2008 and have positioned their largest fund of funds accordingly.
In light of the uncertainty over the global economic outlook and the ongoing difficulties in the credit markets, Commerzbank's Alternative Investment Group, which manages $540 million, is avoiding too much exposure to any one asset class.
But the stellar rise in the price of commodities from wheat to gold in the last two years, along with share-boosting merger and acquisition activity in the basic resources sector has made commodities the play for 2008.
"Within the equities space, we've been trying to find managers who are actively managing the whole commodities complex. That is one area of equity exposure that has been maintained or increased versus a year ago," said Michael Kane, a senior portfolio manager for the fund of funds -- an investment vehicle which holds other funds in its portfolio rather than individual assets.
Severe drought in many parts of the crop-growing world and booming levels of consumption in emerging economies have pushed the price of basic foodstuffs such as wheat, soybeans and corn to record highs.
Adding to this is the development of green fuel technology that has unleashed record demand for a variety of soft commodities such as grains, vegetable oils and sugar to convert into biofuel -- a potential substitute for traditional fossil fuels.
"The one that is really in play at the moment is anything related to food," said fellow senior portfolio manager Edward Hands.
"The reason they go up together is because they're all fighting for acreage. You can increase the supply of arable land slowly either by taking conservation land off line and turning it into arable land but all this tends to be rather marginal land."
He said adding crop yields in these areas tended to be poor, while years of intense use of pesticides and other chemicals had degraded top soils in other more fertile parts of the globe.
"Nobody has really kept their eye on that ... all of a sudden, we've had a drought for wheat, we've got biofuel demand for corn and sugar and suddenly inventories are down and everybody is getting worried and that means higher prices."
"I think they're in play and I think they will be the top performing asset class this year."
Among the so-called hard commodities, gold and platinum have hit record highs this year as demand from hedge funds and consumers such as jewellers or chemical companies alike has flourished.
Gold, which has soared by 80 percent in the last two years, has also benefited from the shift in interest-rate and inflation expectations, while platinum, which has doubled in value in that time, has seen unprecedented interest from hedge funds.
The entire commodities was languishing in a 20-year bear market until about three years ago, depressed by a glut of supply and erratic demand. Mining companies in particular curtailed production capacity and froze expansion plans in order to survive.
Now that demand has reignited, many companies are struggling just to keep up.
That said, in the current environment of heightened volatility, Commerzbank's fund of funds is wary of betting too heavily in one direction or one asset class, be that shorting, or selling U.S. mortgage-backed securities, or adding commodities-heavy funds to its portfolio.
"We are a little hesitant to put new money to work, finding good investments and good managers with a good outlook for the next six to 12 months is difficult at this time," Kane said.
"We've also focussed on hedge fund managers with experience, we're not really focussing on new launches ... and tended to focus on more traditional equity hedge fund managers with low net exposures who've lived through tough market conditions before," he said.
Ultimately, the fate of the equity markets is linked with that of the investment banks and their ability to revive the credit markets and shift some of the battered subprime-linked assets from their books.
Tough credit conditions and soaring prices for anything from gasoline to milk must prompt a shift in thinking among individuals as well as the investment community.
"The prevailing theme ... I think is how much people's incomes in the Western world get eaten up by the basic essentials in life and how people will be forced to review their lifestyle," Hands said.
"Related to that is the credit unwind," Kane said. "Whether it is at an individual level .. or on the banking side, credit tightening has happened in an abrupt way in the fourth quarter and I don't see it ramping up again aggressively in the near future." (Editing by Jason Neely)
Asia and Middle-East state-run funds pour cash into commodities
From the WSJ: With juicy profits from rising exports of raw materials, government-run funds in Asia and the Middle East are now investing billions of dollars directly into crude oil, copper and other commodities in a development that could reshape markets globally.
Total commodity investments by what are known as sovereign-wealth funds are around 1% of the funds' total assets of nearly $3 trillion -- an average based on estimates by Morgan Stanley, Global Insight and other analysts. That amounts to a sizable $30 billion worth of state funds in commodities, up from a fraction of that amount five years ago.
But state-run fund investments in energy, agricultural and other commodity markets are expected to get even bigger due to rapid economic growth in China, Saudi Arabia and other emerging markets and related high commodity prices
Total commodity investments by what are known as sovereign-wealth funds are around 1% of the funds' total assets of nearly $3 trillion -- an average based on estimates by Morgan Stanley, Global Insight and other analysts. That amounts to a sizable $30 billion worth of state funds in commodities, up from a fraction of that amount five years ago.
But state-run fund investments in energy, agricultural and other commodity markets are expected to get even bigger due to rapid economic growth in China, Saudi Arabia and other emerging markets and related high commodity prices
Carbon credits drive The Green Exchange
TheStar.com - Business - Carbon credits drive The Green Exchange
February 26, 2008
The New York Mercantile Exchange, the world's largest energy market, will open an exchange for trading carbon dioxide emissions credits in March.
Contracts at The Green Exchange will be introduced March 16 for trade on March 17, Nymex said yesterday. The initial contracts offered will be European Union Allowance futures and options and Certified Emission Reduction futures.
Global trade in emissions credits tripled to $30 billion (U.S.) last year, as restrictions on carbon-dioxide pollution from power plants and refineries in Europe drove energy companies to buy permits. Twenty-two U.S. states are exploring mandatory carbon caps and emission-credit markets similar to the one in the EU.
Nymex developed The Green Exchange with utilities, emissions brokers and investment banks to create contracts with uniform standards.
Partners in the exchange include JPMorgan Chase & Co., Morgan Stanley, Tudor Investment Corp. and emissions brokers Evolution Markets Inc., Nymex said.
The contracts will trade on the CME Group Inc.'s Globex electronic platform, the venue that has listed Nymex's contracts since 2006. Nymex will apply for U.S. Commodity Futures Trading Commission certification with its trades cleared by Nymex.
February 26, 2008
The New York Mercantile Exchange, the world's largest energy market, will open an exchange for trading carbon dioxide emissions credits in March.
Contracts at The Green Exchange will be introduced March 16 for trade on March 17, Nymex said yesterday. The initial contracts offered will be European Union Allowance futures and options and Certified Emission Reduction futures.
Global trade in emissions credits tripled to $30 billion (U.S.) last year, as restrictions on carbon-dioxide pollution from power plants and refineries in Europe drove energy companies to buy permits. Twenty-two U.S. states are exploring mandatory carbon caps and emission-credit markets similar to the one in the EU.
Nymex developed The Green Exchange with utilities, emissions brokers and investment banks to create contracts with uniform standards.
Partners in the exchange include JPMorgan Chase & Co., Morgan Stanley, Tudor Investment Corp. and emissions brokers Evolution Markets Inc., Nymex said.
The contracts will trade on the CME Group Inc.'s Globex electronic platform, the venue that has listed Nymex's contracts since 2006. Nymex will apply for U.S. Commodity Futures Trading Commission certification with its trades cleared by Nymex.
Point Carbon predicts global carbon market up 56% in 2008
Point Carbon, the leading provider of analysis, advisory services and news for the environmental and energy markets, predicts that the global carbon market will see 4.2 billion tonnes CO2e transacted during 2008, up 56% on last year. At today’s prices, the market would be worth €63 billion ($92bn).
The figures, published in Carbon Market Analyst ”Outlook for 2008” see continued growth in the EU emissions trading scheme (ETS), which Point Carbon reckons will be worth some €46 billion ($68bn) in 2008. Options and auctions contribute to the increased volume in the EU scheme this year.
“There are several reasons why we expect this growth. Most important, the tightness of the Phase 2 cap is expected to increase the traded volume compared to 2007 simply because more players are short of allowances. The proposed EU climate and energy package of 23 January this year further strengthens this tightness” said , Kjetil Røine, manager of Point Carbon’s Carbon Market Research team.
Point Carbon’s figures also show that developing countries continue to deliver reductions. The Clean Development Mechanism (CDM) saw transactions of 947 Mt in 2007 in the primary and secondary markets, producing a combined value of €12 billion ($17bn). However, Point Carbon expects the primary CDM market to shrink in 2008, while secondary transactions will continue to grow strongly. The forecast total volume of the CDM market in 2008 would be 1.2 bn tonnes CO2e, worth €15 billion ($22bn) at current prices.
The figures, published in Carbon Market Analyst ”Outlook for 2008” see continued growth in the EU emissions trading scheme (ETS), which Point Carbon reckons will be worth some €46 billion ($68bn) in 2008. Options and auctions contribute to the increased volume in the EU scheme this year.
“There are several reasons why we expect this growth. Most important, the tightness of the Phase 2 cap is expected to increase the traded volume compared to 2007 simply because more players are short of allowances. The proposed EU climate and energy package of 23 January this year further strengthens this tightness” said , Kjetil Røine, manager of Point Carbon’s Carbon Market Research team.
Point Carbon’s figures also show that developing countries continue to deliver reductions. The Clean Development Mechanism (CDM) saw transactions of 947 Mt in 2007 in the primary and secondary markets, producing a combined value of €12 billion ($17bn). However, Point Carbon expects the primary CDM market to shrink in 2008, while secondary transactions will continue to grow strongly. The forecast total volume of the CDM market in 2008 would be 1.2 bn tonnes CO2e, worth €15 billion ($22bn) at current prices.
Portrait: Andrew J. Hall hits jackpot in oil as commodity boom roars on, now manages money for Blackstone and Phibro
From the WSJ: The commodities market's historic surge is generating huge paydays on Wall Street. One of the biggest beneficiaries has been Andrew J. Hall, an enigmatic British-born trader who, five years ago, anticipated an important shift in the way the world valued oil -- and bet big.
Over the past five years, Mr. Hall's compensation has totaled well over a quarter-billion dollars, according to a Wall Street Journal analysis of securities filings and Mr. Hall's compensation structure. One of those years he out-earned his boss, the head of Citigroup Inc., about five times over. Last year, an unusually rough one for Citigroup, Mr. Hall's secretive trading unit, Phibro, generated close to 10% of the bank's total net income. Mr. Hall's power at Citigroup is the result of his winning bets on oil and natural gas, part of a broader commodities boom that has swept the world this decade.
… Mr. Hall's bet -- that long-term and short-term energy prices would soon abandon their historical relationship with one another -- looked like a long shot when he made it. In making it, Mr. Hall individually took on more risk than Citigroup typically permits some groups of traders to carry, according to a person familiar with the bank.
Now, after 15 straight profitable years, Mr. Hall has considered breaking out on his own. Last year, for the first time, he began managing outside money for clients including investment giant Blackstone Group and others. Officials at Citigroup say they are "committed" to Mr. Hall and to Phibro, a once-legendary but now nearly forgotten commodities firm that Citigroup inherited a decade ago…
Late last year, Citigroup told Phibro executives that it was interested in broadening the unit's scope by merging it into Citigroup's asset-management arm. That would effectively turn Phibro into a hedge fund, managing money for clients but much less of Citigroup's own capital. The 57-year-old trader balked. Mr. Hall called the idea "a complete nonstarter," according to a person familiar with the exchange
Over the past five years, Mr. Hall's compensation has totaled well over a quarter-billion dollars, according to a Wall Street Journal analysis of securities filings and Mr. Hall's compensation structure. One of those years he out-earned his boss, the head of Citigroup Inc., about five times over. Last year, an unusually rough one for Citigroup, Mr. Hall's secretive trading unit, Phibro, generated close to 10% of the bank's total net income. Mr. Hall's power at Citigroup is the result of his winning bets on oil and natural gas, part of a broader commodities boom that has swept the world this decade.
… Mr. Hall's bet -- that long-term and short-term energy prices would soon abandon their historical relationship with one another -- looked like a long shot when he made it. In making it, Mr. Hall individually took on more risk than Citigroup typically permits some groups of traders to carry, according to a person familiar with the bank.
Now, after 15 straight profitable years, Mr. Hall has considered breaking out on his own. Last year, for the first time, he began managing outside money for clients including investment giant Blackstone Group and others. Officials at Citigroup say they are "committed" to Mr. Hall and to Phibro, a once-legendary but now nearly forgotten commodities firm that Citigroup inherited a decade ago…
Late last year, Citigroup told Phibro executives that it was interested in broadening the unit's scope by merging it into Citigroup's asset-management arm. That would effectively turn Phibro into a hedge fund, managing money for clients but much less of Citigroup's own capital. The 57-year-old trader balked. Mr. Hall called the idea "a complete nonstarter," according to a person familiar with the exchange
Connective Capital`s picks are in solar, energy storage, water … and biofuels
From GreenTechMedia.com: In spite of biofuels' troubles, a Connective Capital partner says there's still money to be made in the sector. And fund executives say greentech isn't headed for a crash.
Despite all the difficulties facing the ethanol industry -- such as shrinking margins, canceled plants, environmental concerns and even a study suggesting an ethanol fire is harder to extinguish than a gasoline fire -- Rob Romero, a managing partner at Connective Capital, still thinks biofuel investments are worth pursuing.
At a hedge-fund investment panel Wednesday at the Cleantech Forum in San Francisco, he listed biofuel as one of his interest areas as a fund manager. It’s not that Romero is blind to the ethanol industry’s hardships. He just thinks investors have to know where to look. And he’s looking to invest, not in ethanol manufacturers, but in the industry’s supporting businesses.
"All the people who are making money aren’t the ethanol refiners," Romero said, adding that the moneymakers are farmers, seed suppliers and fertilizer manufacturers. "[Those are] the type of markets we are chasing as a hedge fund," he said. "It’s not investing across the value chain, but frankly making long and short investments to keep the volatility down for our investors."
Speaking to a crowd with an entrepreneurial bent, Romero also dispensed hints for venture capitalists and startups. He sees a big opportunity for energy-storage technologies that can expand the use of solar and wind power, as well as for companies that can lower the cost of solar energy to that of conventional electricity -- about $1 per watt, he said…. Full article: Source
Opalesque note: Connective Capital Management, LLC is a Silicon Valley based investment adviser seeking superior returns by investing primarily in technology equities. It launched its third hedge fund in April 2006. Corporate website: Source
Despite all the difficulties facing the ethanol industry -- such as shrinking margins, canceled plants, environmental concerns and even a study suggesting an ethanol fire is harder to extinguish than a gasoline fire -- Rob Romero, a managing partner at Connective Capital, still thinks biofuel investments are worth pursuing.
At a hedge-fund investment panel Wednesday at the Cleantech Forum in San Francisco, he listed biofuel as one of his interest areas as a fund manager. It’s not that Romero is blind to the ethanol industry’s hardships. He just thinks investors have to know where to look. And he’s looking to invest, not in ethanol manufacturers, but in the industry’s supporting businesses.
"All the people who are making money aren’t the ethanol refiners," Romero said, adding that the moneymakers are farmers, seed suppliers and fertilizer manufacturers. "[Those are] the type of markets we are chasing as a hedge fund," he said. "It’s not investing across the value chain, but frankly making long and short investments to keep the volatility down for our investors."
Speaking to a crowd with an entrepreneurial bent, Romero also dispensed hints for venture capitalists and startups. He sees a big opportunity for energy-storage technologies that can expand the use of solar and wind power, as well as for companies that can lower the cost of solar energy to that of conventional electricity -- about $1 per watt, he said…. Full article: Source
Opalesque note: Connective Capital Management, LLC is a Silicon Valley based investment adviser seeking superior returns by investing primarily in technology equities. It launched its third hedge fund in April 2006. Corporate website: Source
If climate sceptics are right, it is time to worry
By Paul Klemperer
Published: February 28 2008 18:38 | Last updated: February 28 2008 18:38
Al Gore says the science on global warming is clear and there is a major problem. Vaclav Klaus, Czech president, contends that climate change forecasts are speculative and unreliable. Whose claims are scarier?
Of course, Mr Klaus exaggerates (he is a politician) but if he is partly right, we should be more concerned, not less. Consider an analogy. If, like many of my neighbours in Oxford, you believe that new building exacerbates flooding, how would you feel if models that predicted bad news were discredited?
It depends. If the original models were biased, your best guess of the height of future floods is now lower. But if the models merely underestimated the uncertainty, the range of plausible outcomes is now greater, so flood defences would need to be higher for us to feel safe.
Likewise, if our understanding of climate systems is flawed, our best guess about the dangers we face may be less pessimistic, but extreme outcomes are more likely.
Mr Klaus is probably right that there are fewer certainties than many claim. Even commentators who support the conclusions of the Intergovernmental Panel on Climate Change point to methodological weaknesses in its economics. A UK High Court judge recently required that a list of “scientific errors” be sent to schools that show Mr Gore’s remarkable polemic, An Inconvenient Truth – confirming the impression that the film goes some way beyond established facts (Mr Gore is also a politician).
But we hardly need Mr Klaus to teach us that experts’ models can be incomplete and a strong consensus can be badly flawed. Financial Times readers do not need reminding that, only last summer, hedge fund managers found their stock market models’ predictions were, in their own words, “25 standard deviations” from the outcomes; that, less than two years ago, a new drug nearly killed six human volunteers in tests in London, even though the dose was 1-500th of the amount administered to animals; or that it was a complete “out of model” surprise to biologists that feeding bonemeal to cattle would cause an epidemic of mad cow disease.
How confident can we be about the way a system as complex as earth will respond to conditions it has never encountered before? Although greater uncertainty means climate change might be less bad than we fear – for example, an “iris” effect means increases in cloud cover may slow global warming – it also means it might be much worse. While the central predictions of climate change models are arguably not so much worse than many other difficult problems the world faces, the worst possibilities are far, far nastier.
Consider the “clathrate gun hypothesis” that warming seas could lead to clathrates (the frozen chunks of methane at the bottom of the sea) exploding into the air, which is what might have caused mass extinction at the end of the Permian era. Or the concern that the carbon dioxide could cause hydrogen sulphide gas to build up first in the oceans then in the atmosphere, exterminating most of life (and potentially also attacking the ozone layer, permitting the sun’s ultraviolet radiation to kill remaining life) – this, too, has been blamed for previous mass extinctions.
I am not losing any sleep about these specific scenarios. In part that is because they seem so improbable (in spite of Mr Klaus’s eloquent expositions of how little we really know). But it is also because the fact that we have already thought of these risks means that, if it becomes necessary, we probably have time to organise a last-ditch geoengineering solution (seeding the ocean with an antidote, for example) that would at least mitigate the very worst consequences.
But what of completely unanticipated possibilities? Even Donald Rumsfeld, former US defence secretary, understood that it is the “unknown unknowns” that should really worry us. Serious scientists worry that feedback effects such as release of methane from the Siberian permafrost (or those underwater clathrates), or reductions in the earth’s reflectivity due to polar ice loss, could cause runaway greenhouse warming, with unforeseeable outcomes that would look like bad science fiction from today’s perspective.
The continuing scientific uncertainty about the pace of climate change should make us more concerned, not less. And it is those who doubt the climatologists’ models who should be the most frightened.
The writer is Oxford university’s Edgeworth professor of economics
Published: February 28 2008 18:38 | Last updated: February 28 2008 18:38
Al Gore says the science on global warming is clear and there is a major problem. Vaclav Klaus, Czech president, contends that climate change forecasts are speculative and unreliable. Whose claims are scarier?
Of course, Mr Klaus exaggerates (he is a politician) but if he is partly right, we should be more concerned, not less. Consider an analogy. If, like many of my neighbours in Oxford, you believe that new building exacerbates flooding, how would you feel if models that predicted bad news were discredited?
It depends. If the original models were biased, your best guess of the height of future floods is now lower. But if the models merely underestimated the uncertainty, the range of plausible outcomes is now greater, so flood defences would need to be higher for us to feel safe.
Likewise, if our understanding of climate systems is flawed, our best guess about the dangers we face may be less pessimistic, but extreme outcomes are more likely.
Mr Klaus is probably right that there are fewer certainties than many claim. Even commentators who support the conclusions of the Intergovernmental Panel on Climate Change point to methodological weaknesses in its economics. A UK High Court judge recently required that a list of “scientific errors” be sent to schools that show Mr Gore’s remarkable polemic, An Inconvenient Truth – confirming the impression that the film goes some way beyond established facts (Mr Gore is also a politician).
But we hardly need Mr Klaus to teach us that experts’ models can be incomplete and a strong consensus can be badly flawed. Financial Times readers do not need reminding that, only last summer, hedge fund managers found their stock market models’ predictions were, in their own words, “25 standard deviations” from the outcomes; that, less than two years ago, a new drug nearly killed six human volunteers in tests in London, even though the dose was 1-500th of the amount administered to animals; or that it was a complete “out of model” surprise to biologists that feeding bonemeal to cattle would cause an epidemic of mad cow disease.
How confident can we be about the way a system as complex as earth will respond to conditions it has never encountered before? Although greater uncertainty means climate change might be less bad than we fear – for example, an “iris” effect means increases in cloud cover may slow global warming – it also means it might be much worse. While the central predictions of climate change models are arguably not so much worse than many other difficult problems the world faces, the worst possibilities are far, far nastier.
Consider the “clathrate gun hypothesis” that warming seas could lead to clathrates (the frozen chunks of methane at the bottom of the sea) exploding into the air, which is what might have caused mass extinction at the end of the Permian era. Or the concern that the carbon dioxide could cause hydrogen sulphide gas to build up first in the oceans then in the atmosphere, exterminating most of life (and potentially also attacking the ozone layer, permitting the sun’s ultraviolet radiation to kill remaining life) – this, too, has been blamed for previous mass extinctions.
I am not losing any sleep about these specific scenarios. In part that is because they seem so improbable (in spite of Mr Klaus’s eloquent expositions of how little we really know). But it is also because the fact that we have already thought of these risks means that, if it becomes necessary, we probably have time to organise a last-ditch geoengineering solution (seeding the ocean with an antidote, for example) that would at least mitigate the very worst consequences.
But what of completely unanticipated possibilities? Even Donald Rumsfeld, former US defence secretary, understood that it is the “unknown unknowns” that should really worry us. Serious scientists worry that feedback effects such as release of methane from the Siberian permafrost (or those underwater clathrates), or reductions in the earth’s reflectivity due to polar ice loss, could cause runaway greenhouse warming, with unforeseeable outcomes that would look like bad science fiction from today’s perspective.
The continuing scientific uncertainty about the pace of climate change should make us more concerned, not less. And it is those who doubt the climatologists’ models who should be the most frightened.
The writer is Oxford university’s Edgeworth professor of economics
Why Energy Companies are Not Investing in The Future
By Peter Fusaro
Daily IssueAlert
2/28/2008
Free
The underinvestment in clean energy and clean technology is mind boggling, considering the market opportunity. Capital outlays on research and development seem not to be focused on the approaching carbon constrained world and the myriad opportunities presented.
The outlays for R&D last year were $4 billion for U.S. energy companies—that includes oil, gas and power companies. We see little movement this year, as well. The Federal government's outlay was $7.5 billion in many politically wired projects. The energy industry is the most capital-intensive industry on the planet and requires vast reservoirs of capital. The funny thing is that the industry is awash in capital but seems content on stock repurchasing and dividend boosting. It's not a very enlightened approach to the future.
In fact, it can be argued that the major oil companies are now in a liquidation phase of their existence. Their reserves-to-production ratio is declining, and they are now beginning to peak as they now produce and monetize their depletable assets. Investment in a new energy future is not being pursued by many energy companies yet. I see the energy companies, therefore, as the buyers of the new clean energy technology, not the innovators producing them.
Large Pools of Capital Are Not Being Deployed
So, the energy companies don't seem to have the vision to create a better future in alternative energy, cleantech, gasification and energy efficiency. Why aren't large institutional investors filling this capital vacuum? The answer is that they don't like government regulated and mandated markets, as well as tax leveraged investments. To test this thesis, I recently spoke at a Dow Jones private equity conference in New York City. I didn't realize that there are hundreds of private equity funds with names that most people were unfamiliar with besides the KKR, Carlyle Group and Blackstone. These funds are tracking the sector, but not deploying capital. We are talking about many funds in the $5 to $10 billion range and up. They are focused on subprime workouts, leverage buy outs, and replatforming companies in roll ups. My take-away from the conference was that the investment consensus was that this was a great time to play in the distressed asset space. Despite the three high profile funds in the alternative energy space, most private equity shops are not investing in the energy sector outside traditional oil, gas, and coal production plays. There is some interest in uranium as well.
Part of the reason for this phenomenon is that Wall Street is always focused on fees. Investment banking fees, legal fees, engineering fees, and other deal fees. The research on this new emerging clean energy sector is scarce and large investment houses in New York don't focus on areas that don't feed the fee machine. That is why the preponderance of deals has been focused on ethanol, wind and PV solar. To say the sector is under researched is an understatement. Smaller boutique houses such as Jefferies, Ardour Capital Management and Piper Jaffray are carrying the bulk of research on public companies, and Cleantech Venture Network and Clean Edge are providing much of the intellectual capital for the private companies.
Carbon is the Green Equalizer
Many folks holler about the need for a level playing field for renewable and clean technology. Well, one is coming, and it's called carbon constraints. They are going to be economy wide, and that has not happened before. And many companies outside the energy sector don't have much if any experience in reducing their emissions footprint. You can look at greenhouse gas reductions as a business cost center or an opportunity. The opportunity is to invest in the future and make more money in streamlining business practices. But the learning curve will be steep. What's really needed is price discovery for the price of carbon on all economic inputs and outputs. That will move the needle, and that day will arrive in two years with Federal mandatory greenhouse standards.
Market Opportunity Immense, Capital Currently Deployed Miniscule
Last year's investment in Cleantech in the United States and Europe was $5.18 billion, according to the Cleantech Group (www.cleantech.com). This was up from $3.6 billion in 2006, and $3.95 billion of that investment was in North America. That investment was concentrated in energy generation, energy storage, transportation, energy efficiency, recycling and waste reduction. While investment was up for the sixth consecutive year and will most probably grow again this year. This level of investment is far short of what is needed to move not only the US economy, but the global economy, onto a cleaner and greener economic path."
I am convinced more than ever that two things are now going to occur to accelerate this transition and economic transformation. One is the U.S. movement into the greenhouse gas reduction scheme on a national and international basis. So, carbon will be an accelerator in this economic equation and a facilitator for cleantech investment. The second factor is the scale of capital needed, and ironically the capital is there as the graph shows below. The private equity sector is going to have to get over its apprehensions of government mandates and see the economic opportunities. That means investment returns. If it looks likes project finance, which many of the technologies do, it is not going to excite Wall Street to invest full tilt. But if the investment returns can show 5, 10 and 20 times capital invested, then not only excitement but a shift to defining or game changing technologies then investment starts in earnest . It's the scale that's needed.
On the street today, Goldman Sachs has invested in 11 later stage defining technologies for their own portfolio. The other banks have not moved that far, as yet. But they will. The hundreds of private equity funds are nibbling around the edges and the studying the sector. Deployment of capital is now needed in the hundreds of billions range. It's infrastructure, transport, energy efficiency and most importantly it's carbon reductions will ignite this new investment acceleration. The entrepreneurs and the dreamers are out there in the hinterlands creating the next economic cycle, and it is not a bubble. Higher sustained energy prices, more rapid technology shift and a price for carbon will materialize investment in tangible projects for today and next generation technologies for tomorrow. This is the holy grail of sustainability - building a sustainable future backed by sustainable returns.
Peter C. Fusaro has been active in the energy and environmental arena for 33 years during countless market cycles. He holds the annual Wall Street Green Trading Summit VII (www.wsgts.com) on April 2nd and 3rd and a pre-conference carbon markets seminar on April 1st in New York.
Gold and oil rise to hit record highs
By Chris Flood
Published: February 29 2008 02:00 | Last updated: February 29 2008 02:00
Gold and oil both achieved records levels for a second consecutive session yesterday while wheat markets saw further volatility after news of a commodities trader at MF Global who substantially exceeded his authorised trading limits.
The dollar's weakness has been widely cited as a key driver of the present rally. But analysts at Barclays Capital disagree. "Commodity prices are going up in all currencies. Supply losses, strong demand and low inventory levels are the key drivers, not exchange rates," said Barclays.
Gold hit a record $967.30 a troy ounce, supported by dollar weakness, concerns about inflation and the deteriorating outlook for the US economy. Bullion rose 0.8 per cent to $965.60 by the end of European trading.
In the oil market, Nymex April West Texas Intermediate surged $3.00 to a record $102.64 a barrel, surpassing the $102.08 peak reached in the previous session. ICE April Brent also pushed past the $100 level, jumping $2.43 to $100.70 a barrel.
Speculative buying and news of a small pipeline leak in Nigeria provided support. However, the main focus for traders' attention remains next week's Opec meeting in Vienna amid mounting confidence that the cartel is unlikely to cut supplies with oil prices trading at about $100 a barrel.
Harry Tchilinguirian, senior oil market analyst at BNP Paribas, said there was "no credibility" in Opec arguing for a cut in supplies on expectation that demand will soften in the second quarter.
Mr Tchilinguirian said: "Crude demand will be rising in the second quarter as Atlantic Basin refiners emerge from maintenance and increase production ahead of peak summer demand."
Saudi Arabia could even push for a supply increase of 0.5m barrels a day, according to Mr Tchilinguirian, who said this would be a public gesture to address consumers concern without sparking a significant price correction.
In base metals, copper added 0.9 per cent at $8,510 a tonne, supported by a fall of 1,750 tonnes in LME stocks and talk of strong demand from China. Market speculation that copper will exceed its $8,800 peak is gathering steam, while aluminium, up 1.6 per cent to $3,140 a tonne, is also thought likely to breach its previous record of $3,300 if production problems in China persist.
Nickel jumped 5.8 per cent to $30,899.8 a tonne as hedge funds closed out short positions on concerns over a strike at BHP Billiton's Cerro Matoso ferronickel mine in Colombia, which accounts for about 4 per cent of global nickel supply.
Tin hit a record $18,900 a tonne before easing back to $18,700, up 4.2 per cent on the day, on concerns over supplies from Indonesia and the Democratic Republic of Congo. Zinc rose 3.5 per cent to $2,780 a tonne, extending its gains after a jump of 7.6 per cent on Wednesday, helped by short-covering and buying by short-term momentum players.
Wheat prices remained volatile after seeing wild gyrations in Wednesday's session due to the unwinding of the MF Global trader's positions. CBOT March wheat fell 98½ cents to $11.80½ a bushel.
Exporters will be able to resume shipments from Kazakhstan, one of the world's largest grain suppliers, after depositing quantities of wheat into government warehouses. Reports suggested Kazakhstan would follow Russia in imposing export restrictions.
Copyright The Financial Times Limited 2008
Published: February 29 2008 02:00 | Last updated: February 29 2008 02:00
Gold and oil both achieved records levels for a second consecutive session yesterday while wheat markets saw further volatility after news of a commodities trader at MF Global who substantially exceeded his authorised trading limits.
The dollar's weakness has been widely cited as a key driver of the present rally. But analysts at Barclays Capital disagree. "Commodity prices are going up in all currencies. Supply losses, strong demand and low inventory levels are the key drivers, not exchange rates," said Barclays.
Gold hit a record $967.30 a troy ounce, supported by dollar weakness, concerns about inflation and the deteriorating outlook for the US economy. Bullion rose 0.8 per cent to $965.60 by the end of European trading.
In the oil market, Nymex April West Texas Intermediate surged $3.00 to a record $102.64 a barrel, surpassing the $102.08 peak reached in the previous session. ICE April Brent also pushed past the $100 level, jumping $2.43 to $100.70 a barrel.
Speculative buying and news of a small pipeline leak in Nigeria provided support. However, the main focus for traders' attention remains next week's Opec meeting in Vienna amid mounting confidence that the cartel is unlikely to cut supplies with oil prices trading at about $100 a barrel.
Harry Tchilinguirian, senior oil market analyst at BNP Paribas, said there was "no credibility" in Opec arguing for a cut in supplies on expectation that demand will soften in the second quarter.
Mr Tchilinguirian said: "Crude demand will be rising in the second quarter as Atlantic Basin refiners emerge from maintenance and increase production ahead of peak summer demand."
Saudi Arabia could even push for a supply increase of 0.5m barrels a day, according to Mr Tchilinguirian, who said this would be a public gesture to address consumers concern without sparking a significant price correction.
In base metals, copper added 0.9 per cent at $8,510 a tonne, supported by a fall of 1,750 tonnes in LME stocks and talk of strong demand from China. Market speculation that copper will exceed its $8,800 peak is gathering steam, while aluminium, up 1.6 per cent to $3,140 a tonne, is also thought likely to breach its previous record of $3,300 if production problems in China persist.
Nickel jumped 5.8 per cent to $30,899.8 a tonne as hedge funds closed out short positions on concerns over a strike at BHP Billiton's Cerro Matoso ferronickel mine in Colombia, which accounts for about 4 per cent of global nickel supply.
Tin hit a record $18,900 a tonne before easing back to $18,700, up 4.2 per cent on the day, on concerns over supplies from Indonesia and the Democratic Republic of Congo. Zinc rose 3.5 per cent to $2,780 a tonne, extending its gains after a jump of 7.6 per cent on Wednesday, helped by short-covering and buying by short-term momentum players.
Wheat prices remained volatile after seeing wild gyrations in Wednesday's session due to the unwinding of the MF Global trader's positions. CBOT March wheat fell 98½ cents to $11.80½ a bushel.
Exporters will be able to resume shipments from Kazakhstan, one of the world's largest grain suppliers, after depositing quantities of wheat into government warehouses. Reports suggested Kazakhstan would follow Russia in imposing export restrictions.
Copyright The Financial Times Limited 2008
MF Global Announces $141.5 Million Bad Debt Provision
Company Remains Well-Capitalized with No Impact to Client Funds
NEW YORK--(BUSINESS WIRE)--Feb. 28, 2008--MF Global (NYSE: MF), a leading broker of exchange-traded futures and options, announced that during the early hours of Wednesday morning, February 27, a registered representative in one of its U.S. branch offices, trading in the wheat futures market in his personal account, substantially exceeded his authorized trading limit. The registered representative concerned has been terminated effective immediately.
A failure in one of the company's retail order entry systems permitted the representative to establish significant positions in his own account which were liquidated later that morning. The unauthorized activity resulted in him incurring a loss of $141.5 million, which the company, as a clearing member, is responsible to settle at the clearinghouse. As a result, the company recorded a bad debt provision for the full amount.
The company believes it has made the appropriate adjustments to its order entry systems to prevent a recurrence of unauthorized trading of this type in the future. In addition, MF Global has engaged a third-party risk technology consultant to review its relevant order entry systems.
Client funds are not at all impacted by this event.
The company's capital and liquidity position remain strong. The loss represents approximately six percent of the company's equity, in addition to which it has close to $1.5 billion in undrawn committed credit facilities.
In the company's fourth fiscal quarter to date, net revenues are exceeding all comparable prior periods of this fiscal year. MF Global remains confident in its business prospects and long-term financial performance.
The company will hold a conference call at 11:00 a.m. EST today to discuss the matter.
Dial-in information: U.S. (800) 659-2056
International (617) 614-2714
Participant Passcode: 47046771
A live audio webcast of the presentation will be available on the investor relations section of the MF Global Web site and will be available for replay shortly after the event.
ABOUT MF GLOBAL
MF Global Ltd. (NYSE: MF), formerly Man Financial, is the leading broker of exchange-listed futures and options in the world. It provides execution and clearing services for exchange- traded and over-the counter derivative products as well as for non-derivative foreign exchange products and securities in the cash market. MF Global is uniquely diversified across products, trading markets, customers and regions. Its worldwide client base of more than 130,000 active accounts ranges from financial institutions, industrial groups, hedge funds and other asset managers to professional traders and private/retail clients. MF Global operates in 12 countries on more than 70 exchanges, providing access to the largest and fastest growing financial markets in the world. It is the leader by volume on many of these markets and on a single day averages six million lots, more than most of the world's largest derivatives exchanges. For more information, please visit mfglobal.com.
FORWARD-LOOKING STATEMENT
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995: Forward-looking statements in this press release, including statements relating to the Company's future revenues and earnings, plans, strategies, objectives, expectations and intentions, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy, and some of which might not be anticipated. We caution you not to place undue reliance on these forward-looking statements. We refer you to the Company's filings with the Securities and Exchange Commission (SEC) for a description of the risks and uncertainties the Company faces.
CONTACT: MF Global Ltd.
Media:
Diana DeSocio, 212-589-6282
ddesocio@mfglobal.com
or
Investors:
Lisa Kampf, 212-589-6592
lkampf@mfglobal.com
or
Media or Investors:
Jeremy Skule, 212-319-1253
jskule@mfglobal.com
SOURCE: MF Global Ltd.
NEW YORK--(BUSINESS WIRE)--Feb. 28, 2008--MF Global (NYSE: MF), a leading broker of exchange-traded futures and options, announced that during the early hours of Wednesday morning, February 27, a registered representative in one of its U.S. branch offices, trading in the wheat futures market in his personal account, substantially exceeded his authorized trading limit. The registered representative concerned has been terminated effective immediately.
A failure in one of the company's retail order entry systems permitted the representative to establish significant positions in his own account which were liquidated later that morning. The unauthorized activity resulted in him incurring a loss of $141.5 million, which the company, as a clearing member, is responsible to settle at the clearinghouse. As a result, the company recorded a bad debt provision for the full amount.
The company believes it has made the appropriate adjustments to its order entry systems to prevent a recurrence of unauthorized trading of this type in the future. In addition, MF Global has engaged a third-party risk technology consultant to review its relevant order entry systems.
Client funds are not at all impacted by this event.
The company's capital and liquidity position remain strong. The loss represents approximately six percent of the company's equity, in addition to which it has close to $1.5 billion in undrawn committed credit facilities.
In the company's fourth fiscal quarter to date, net revenues are exceeding all comparable prior periods of this fiscal year. MF Global remains confident in its business prospects and long-term financial performance.
The company will hold a conference call at 11:00 a.m. EST today to discuss the matter.
Dial-in information: U.S. (800) 659-2056
International (617) 614-2714
Participant Passcode: 47046771
A live audio webcast of the presentation will be available on the investor relations section of the MF Global Web site and will be available for replay shortly after the event.
ABOUT MF GLOBAL
MF Global Ltd. (NYSE: MF), formerly Man Financial, is the leading broker of exchange-listed futures and options in the world. It provides execution and clearing services for exchange- traded and over-the counter derivative products as well as for non-derivative foreign exchange products and securities in the cash market. MF Global is uniquely diversified across products, trading markets, customers and regions. Its worldwide client base of more than 130,000 active accounts ranges from financial institutions, industrial groups, hedge funds and other asset managers to professional traders and private/retail clients. MF Global operates in 12 countries on more than 70 exchanges, providing access to the largest and fastest growing financial markets in the world. It is the leader by volume on many of these markets and on a single day averages six million lots, more than most of the world's largest derivatives exchanges. For more information, please visit mfglobal.com.
FORWARD-LOOKING STATEMENT
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995: Forward-looking statements in this press release, including statements relating to the Company's future revenues and earnings, plans, strategies, objectives, expectations and intentions, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy, and some of which might not be anticipated. We caution you not to place undue reliance on these forward-looking statements. We refer you to the Company's filings with the Securities and Exchange Commission (SEC) for a description of the risks and uncertainties the Company faces.
CONTACT: MF Global Ltd.
Media:
Diana DeSocio, 212-589-6282
ddesocio@mfglobal.com
or
Investors:
Lisa Kampf, 212-589-6592
lkampf@mfglobal.com
or
Media or Investors:
Jeremy Skule, 212-319-1253
jskule@mfglobal.com
SOURCE: MF Global Ltd.
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