Ospraie said to back new metals firm run by ex-Noble traders

Ospraie Management will back a new commodity merchant founded by Noble Group Ltd's former global head of metals Mark Hansen, according to people familiar with the matter. 

PHOTO: REUTERS

OCT 13, 20157:08 AM

[LONDON] Ospraie Management will back a new commodity merchant founded by Noble Group Ltd's former global head of metals Mark Hansen, according to people familiar with the matter.

The new firm, called Concord Resources Ltd, will focus on non-ferrous metals, such as copper, zinc, aluminum, nickel and lead, and minerals with offices in London, New York and Hong Kong, according to the people, who asked to not be identified because the information hasn't been made public.

MKS PAMP Group BV is also a founding shareholder of Concord, said Frederic Panizzutti, global head of sales at the Swiss precious metals firm.

Dwight Anderson, who founded New York-based hedge fund Ospraie, will be the chairman, they said.

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Former Noble traders Scott Evans and David Freeland will oversee operations for the Americas and Europe, Middle East and Africa, respectively.

Noble Group, the commodity company battling criticism of its accounting, recently overhauled its metals trading unit.

At least six traders including Hansen and Evans left in the past month, according to people familiar with the matter. The firm is cutting back on copper and zinc trading to focus on aluminum and alumina.

Ospraie, once the world's biggest commodities hedge fund, is based in New York and managed about US$800 million as of May.

Mr Anderson, 48, started his hedge-fund career working for billionaire Julian Robertson at Tiger Management.

The moves come as the industry faces rising competition from new entrants. Tristan Busch, the former head of metals and concentrates at Mercuria Energy Group Ltd, founded his own trading firm, a regulatory filing last month showed.

In March, Castleton Commodities International LLC said it hired Peter Sellars, former head of JPMorgan Chase & Co's metals unit. Hartree Partners LP, the commodity firm founded by former Goldman Sachs Group Inc energy traders, is expanding into the business.

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Dollar slips as Fed officials stay bearish; yuan higher

The US dollar edged lower against the euro and other currencies Monday as two top Federal Reserve officials took cautious stances in comments on interest rate plans. 

PHOTO: BLOOMBERG

OCT 13, 20156:27 AM

[NEW YORK] The US dollar edged lower against the euro and other currencies Monday as two top Federal Reserve officials took cautious stances in comments on interest rate plans.

The dollar slipped to US$1.1363 against the euro and fell to 120.02 yen, while the euro also fell against the Japanese currency, to 136.38 yen.

In a speech on Sunday Fed Vice Chair Stanley Fischer avoided predictions on when the Fed would begin to raise interest rates, leaving it possible that the first move would come next year.

He expressed confidence in the US economy but noted a "disappointing" downturn in the jobs market and, pointing to the weak global economy, said, "Considerable uncertainties also surround the outlook for economic activity." On Monday Fed board member Lael Brainard echoed that view, saying they "should not take the continued strength of domestic demand growth for granted." "Risk-management considerations counsel a stance of waiting to see," she told a meeting of economists in Washington.

Also moving up against the dollar on Monday was the tightly-managed Chinese yuan, which pushed up 0.36 per cent to 6.3238 yuan per dollar.

The Chinese currency has nearly recovered half the amount it lost to the greenback in a shock devaluation move August 11.

AFP

   
 

RBA warns against Australia's undue economic pessimism

Australia risks falling into "chronic pessimism" if it allows uncertainty about the future to obscure the strong fundamentals of the country's economy, a top central banker said on Tuesday. 

PHOTO: AFP

OCT 13, 20157:11 AM

[SYDNEY] Australia risks falling into "chronic pessimism" if it allows uncertainty about the future to obscure the strong fundamentals of the country's economy, a top central banker said on Tuesday.

Reserve Bank of Australia (RBA) Deputy Governor Philip Lowe also noted that monetary policy alone could not boost living standards, underlining the bank's reluctance to cut interest rates from already record lows.

Pressure for further easing has mounted since data last month showed Australia's economy slowed to a crawl in the second quarter of the year, prompting much angst about what would replace the country's fading resources boom. "We do need to be careful that the uncertainty that we feel about the future ... does not mutate into chronic pessimism," Mr Lowe told an investment conference.

"If that were to happen, many of the opportunities that we do have are likely to go begging."

Mr Lowe listed a range of reasons for optimism including Australia's strong regulatory system, a well educated populace, an abundance of natural resources and access to the growing markets of Asia.

The economy had also been well served by a floating exchange rate with the local currency's decline over the last two years helping offset weakness in commodity prices and mining investment.

REUTERS

    
 

Australia business confidence rebounds, job outlook brighter-survey

Australian business confidence rebounded in September as sales and profits held firm, a survey showed on Tuesday, while a measure on employment intentions jumped to its highest since mid-2011. 

PHOTO: REUTERS

OCT 13, 20158:46 AM

[SYDNEY] Australian business confidence rebounded in September as sales and profits held firm, a survey showed on Tuesday, while a measure on employment intentions jumped to its highest since mid-2011.

National Australia Bank's monthly survey of more than 400 firms showed its index of business conditions held at an above-average +9 in September while confidence climbed 4 points to +5. "Overall, the business survey suggest a good degree of resilience in what appears to be a building non-mining sector recovery," said NAB's chief economist Alan Oster. "This is particularly apparent in industries thought to be highly responsive to currency changes in the near-term, including personal and business services." The survey's index of sales eased four points in September but at +15 remained well above its long-run average. Profitability dipped two points but was again firm at +8. A majority of industries reported improved conditions with only mining and manufacturing in the red.

There was a notable pick up in the outlook for hiring with NAB's measure of employment rising five points to +4, the highest in four years. "Consistently above-average outcomes since March suggest that the improved momentum in the non-mining economy is not merely an aberration, but has become much more ingrained," said Oster.

There were also brighter signs for business investment with the survey's index of capital expenditure edging up to +7 in September, thanks mainly to the services sector.

Capacity utilisation likewise ticked up to 81.3 per cent, matching its highest since early 2012. "The trend continues to show improvement, which provides some optimism on the outlook for non-mining business investment and the labour market," said Oster.

The Reserve Bank of Australia has long been hoping for a revival in spending by firms outside of the mining sector which is suffering from weaker commodity prices.

REUTERS

    
 

China September exports fall 1.1%

China's exports fell 1.1 percent from a year earlier in September in yuan-denominated terms, while imports tumbled 17.7 per cent. 

PHOTO: REUTERS

OCT 13, 201510:13 AM

[BEIJING] China's exports fell 1.1 percent from a year earlier in September in yuan-denominated terms, while imports tumbled 17.7 per cent.

That left a trade surplus of 376.2 billion yuan (US$59.45 billion) for the month, the General Administration of Customs (GAC) said on Tuesday, compared with analysts' forecasts of US$46.8 billion.

Dollar-denominated figures have not yet been published. Economists had expected an export decline of 6.3 per cent in dollar terms and an import decline of 15.0 per cent.

China is widely expected to post its slowest economic growth in a quarter of a century this year as activity is weighed down by weakening demand at home and abroad, factory overcapacity, high debt levels and cooling investment.

REUTERS

    
 

Singapore central bank seen easing again after Jan shock

Singapore's central bank is poised to ease monetary policy for the second time in 2015 in an effort to revive dwindling growth, economists predict.

PHOTO: SPH

OCT 13, 20159:05 AM

[SINGAPORE] Singapore's central bank is poised to ease monetary policy for the second time in 2015 in an effort to revive dwindling growth, economists predict.  The Monetary Authority of Singapore, which manages the economy through guiding the currency rather than setting interest rates, will boost stimulus when it meets on Wednesday, according to 16 of 25 economists surveyed by Bloomberg. The remainder predict no move.

The MAS eased policy at an unscheduled meeting in January, saying it would seek to slow the pace of the local dollar's gains versus its trading partners. At the first of this year's two scheduled meetings in April, it refrained from further action.

Singapore's economic performance has worsened since the April gathering. Analysts forecast the nation entered a technical recession in the third quarter, while consumer prices dropped for a 10th month in August, the longest streak of declines since the Asian financial crisis. Analysts predict the currency is on course for its worst year since 1997.

"The MAS has to acknowledge the fact that things have panned out worse than they expected, both in terms of growth, led by external factors, and inflation domestically," said Nizam Idris, head of currencies and fixed-income strategy at Macquarie Bank Ltd. in Singapore. "The current policy setting does not allow for further depreciation of the Singapore dollar."

The Monetary Authority guides the local currency against an undisclosed basket and adjusts the pace of appreciation or depreciation by changing the slope, width and center of a band. It refrains from disclosing details of the basket, the band, and the pace of appreciation or depreciation.

Nine economists predict the central bank will lower the center of the band, allowing the Singapore dollar to weaken in the near term. Ten forecast it would reduce the slope, slowing the pace of the currency's appreciation against the basket over time. Four expect the monetary authority will widen the band, tolerating increased volatility.

"With inflation below the long-term average and growth slowing, this suggests that MAS should be in a position to ease policy," said Khoon Goh, a senior currency strategist at Australia & New Zealand Banking Group Ltd. "The easing that was done in January was a fairly modest one." The central bank will probably recenter its policy band to the prevailing rate, allowing the currency to weaken, he said.

Singapore's dollar will decline to S$1.44 to the US currency by year-end, according to the median estimate of a separate Bloomberg survey. That would translate into a loss of about 8 per cent for the year, the worst annual performance since the currency tumbled 17 per cent during the Asian crisis in 1997.

The local dollar was at S$1.4021 at 8.31 am local time on Tuesday after depreciating to S$1.4366 on Oct 2, the weakest level since September 2009.

Singapore's export-dependent economy has been hurt by slowing growth in China, while uneven recoveries in the US and Europe have damped demand for Asian goods.

Gross domestic product shrank 4 per cent in the second quarter from the previous three months, the trade ministry said Aug. 11. GDP contracted 0.1 per cent in the third quarter, according to a Bloomberg survey before the advance figures are released Wednesday. Consumer prices dropped 0.8 percent in August, the statistics department said Sept. 23.

It will take more than a technical recession to convince the central bank to ease policy again, according to Oversea- Chinese Banking Corp.

The central bank is more concerned about "an outright recession, rather than a technical recession," said Selena Ling, an analyst at OCBC in Singapore. The economy will still expand about 2 percent this year, she said.

"We still have about a more-than 50 per cent chance of no move, mainly because I think the growth and the inflation story is not disastrous by any account," she said. "It's a little bit underwhelming, but it's not disastrous yet."

BLOOMBERG