MERCHANDISER
TWOINTERNATIONALTRADE associations have joined full meeting of the Conference of Parties to the UN
forces to form a new group called the Carbon Markets Framework Convention on Climate Change in Poznan,
and Investors Association (CMIA) with the aim of Poland in December 2008.
keeping the role of the market at the centre of next Abyd Karmali, Managing Director and global head of
year’s global climate change talks in Copenhagen. carbon markets at investment bank Merrill Lynch, has
The merger between the Carbon Markets Association become President of CMIA. He warns that the transition
and International Carbon Investors and Services brings to any post-2012 global carbon market would be
together 60 investment banks and service providers that “extremely challenging” given the current regulatory,
handled around three quarters of the estimated US$64 political and economic challenges.
billion carbon market in 2007. “During this period, almost certainly taking place
against a backdrop of rising energy prices and
NewCarbonAssociationFormed
a softer economic footing, the underlying basis
and principles behind the carbon market will
likely be questioned by a variety of
Companies in the new association aim to provide their stakeholders,” says Karmali.
market insights in the run up to the UN-brokered “The road to Copenhagen in December 2009 started in
international talks in Copenhagen in 2009 which are seen Bali and will have to go through both Washington DC and
as a deadline to agree a new deal post 2012 to follow the Beijing. Negotiations are likely to be bruising, resulting in
Kyoto Protocol. additional volatility in the market.”
A series of international climate change talks will take
www.carbonmarketsassociation.net
place before the December 2009 gathering, including a
Written by veteran commodity bro- enedconsiderablyinrecentyears,and ThePlayers
kerandcommentatorWilliamHubard, with it the range of instruments and Commodities have attracted record
The Financialisation of Commodities strategiesemployed. amounts of funds from institutional
looks at how the commodities market The intention is “... to provide com- investors, but it has been the hedge
works and examines the drivers modity investors with an in-depth funds in particular that have led the
behind the phenomenal growth in examination of the development and way with large scale movements of
commodity-relatedinvestments. drivers of the commodity complex – moneyintothecomplex.
The Financialisation of Commodities how it works, how to invest in it and The Financialisation of Commodities
is a definitive examination of market why, and how it is likely to look in the looksatthedifferenttypesofinvestor,
developmentoverrecentyears.Itoffers future,”saysHubard. assessing their respective motivations
expert insight into the workings of the for increasing exposure to commodi-
commodities sector before exploring InvestmentProducts ties, and offering guidance on which
the factors that have driven the latest The upturn in commodity prices in investment opportunities best suit
investor boom. For investment banks the last few years has been accompa- theirneeds.
and brokers it looks at the varying nied by greater variety in the types of The report also assesses how the
investmentopportunitiesbeingusedto investment products and strategies, changesinscaleandcharacteroffinan-
attract buy-side capital. It also offers driven by the requirements of tradi- cial investor involvement may have
expert advice to investors looking to tional institutional investors and affected the price dynamics in com-
moditymarkets,lookingatwhat
TheFinancialisationofCommodities
this might imply for the future
shape of the market. On the sell
side,thereportoutlinesthemain
maximise their exposure to a range of newer players such as hedge funds. commodities players’ strategies to
commodityrelatedopportunities. The report explains how these prod- increasecommodityrelatedrevenues.
Investment in commodities is an ucts are structured, discussing their
idea that has been around since the application and relative benefits and Outlook
1970s, but only in recent years has it risks for a range of different investor Thebull-runincommoditiesconceals
become popular with institutional groups. Products examined include considerable variation in the perform-
investors. The presence of financial Index Funds, Commodity Derivatives ance between, and even within, the
investors in commodity markets has and Futures, Commodity-linked main commodity groups, each of
increased almost threefold in the past Structured Notes, Collateralised which is influenced by an array of
four years and with it the range of Commodity Obligations, Exchange political, economic and climatic fac-
instruments and strategies employed Traded Funds and Exchange Traded tors.Moreover,thehugeinflowofnew
in commodity trading has broadened Commodities. money in recent years is itself influ-
substantially. The report also looks in detail at a encing commodity markets in com-
Thelackofcorrelationbetweencom- range of the most commonly used plexandoftenarcaneways.
modities and other financial markets commodity indices, describing the
Toordergoto:
is a major reason why the commodity number,typeandweightofcommodi-
www.ifrmarketintelligence.com
market’s investment base has broad- tiesincorporated.
Price:£995/US$2,021
16 SEPTEMBER2008 COMMODITIES NOW
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96 |
Page 97 |
Page 98 |
Page 99 |
Page 100 |
Page 101 |
Page 102