Posted by WARREN MOSLER on October 7th, 2009
Turning into a stampede?
People want it.
They are scared of the fed ‘printing money’ even in the face of obvious excess capacity?
Watch for storage costs to go up/contangos where there is not a monopolist setting price?
Good market for producers who sell forward, getting paid by investors paying up for forwards/storage?
Investors Plan to Go Overweight Commodities, Credit Suisse Says
By Chanyaporn Chanjaroen
Oct. 7 (Bloomberg) — More than half of investors surveyed
by Credit Suisse Group AG said they plan to hold an overweight
position in commodities in the next 12 months, double the
proportion with such a weighting now.
Of the 180 investors surveyed last month, 51 percent said
they expected to hold an overweight position in the next year,
34 percent a neutral weighting and 13 percent underweight. That
compares with 25 percent overweight now, 38 percent neutral and
30 percent underweight.
The most popular route for commodity investment will likely
be active indexes or funds, followed by exchange-traded funds,
according to the survey, e-mailed by the bank yesterday. Of
those surveyed, 44 percent were from hedge funds and 22 percent
from institutional funds.
The Reuters/Jefferies CRB Index of 19 commodities posted a
record 36 percent decline last year and rebounded 13 percent
this year. Assets under management at commodity hedge funds
increased 6 percent this year to $60.61 billion as of the end of
August, according to Hedgefund.net.
Expectations that inflation will accelerate and the dollar
weaken contributed to investor demand for commodities this year,
Kamal Naqvi, head of global commodity investor sales at Credit
Suisse in London, said by phone today.
Thirty-nine percent said natural gas would be the best
performer among energy products over the following 12 months,
with 32 percent picking crude oil.
Among industrial metals, 59 percent expected aluminum to be
the worst performer over the period, while 51 percent thought
copper would advance the most.