http://www.hedgefundsindia.com/blog en-us Sat, 16 Aug 2008 12:05:17 +0530 Main Page Blogware Hedge Funds India http://www.hedgefundsindia.com/blog/_archives/2008/8/16/3840198.html http://www.hedgefundsindia.com/blog/_archives/2008/8/16/3840198.html Sat, 16 Aug 2008 12:33:00 +0530 Lone Pine Capital LLC, run by Stephen Mandel, and Traxis Partners LLC are among 56 overseas funds that registered to buy shares in India in July, the most in six months. Helios Capital Management Pte and Stonewater Capital LLC also won approval from the nation's regulator, nine months after authorities forced hedge funds to register. The Securities and Exchange Board of India reviewed the rules today without making changes, Chairman C.B. Bhave told reporters after a board meeting in Mumbai. The following table is a list of funds registered with the Securities & Exchange Board of India since January. Main Page Hedge Funds India http://www.hedgefundsindia.com/blog/_archives/2008/8/16/3840192.html http://www.hedgefundsindia.com/blog/_archives/2008/8/16/3840192.html Sat, 16 Aug 2008 12:26:00 +0530 A $31 meltdown in value during the overnight hours brought gold to the $775 level far faster than even the most pessimistic expectations we had seen of late. Once the $800 level was breached at 19:40 hours NY time, the metal went into a tailspin the magnitude and viciousness of which was frightening. While gold will make every headline in today's financial press as it undergoes this now nearly vertical slide that puts even its 2006 drop of $200 into the minor leagues, the bigger story unfolded in the silver market where the white metal lost more than 12% of the value it finished at on Thursday afternoon. Words like 'overdone' or 'oversold' began to no longer apply once the metals penetrated the key psychological round figures that lay at $800, $14, $1400 and $300 for gold, silver, platinum, and palladium. "The speculative allure [gold] had presented to index and hedge funds has all but dissipated," said Jon Nadler, a senior analyst at Kitco Bullion Dealers.While the storm in commodities is far from over (they have now fallen 21% since Independence Day), today's focus will be trying to find depth gauges long enough to probe what kind of waters these markets are currently navigating in. Main Page Hedge Funds India http://www.hedgefundsindia.com/blog/_archives/2008/8/16/3840185.html http://www.hedgefundsindia.com/blog/_archives/2008/8/16/3840185.html Sat, 16 Aug 2008 12:22:00 +0530 Two years ago, Wilbur Ross, an investor in distressed securities, set up a $300 million fund focused on India. He convinced India's Housing Development Finance Corp. (HDFC), a local giant, to partner with the fund, bringing its extensive network of local contacts and strong reputation to the venture. He staffed an office in Mumbai, run by managing director Ranjeet Nabha, a Dartmouth MBA who had been a vice-president at JPMorgan Chase and later CEO of a software company. And then Ross proceeded to do very, very little. Now, Ross is at last making a major move. On Aug. 11, the chairman of New York-based WL Ross & Co. announced his India fund would buy an $80 million chunk of convertible bonds issued by Indian discount airline SpiceJet . The once red-hot Indian stock market has cooled down enough to suit Ross, who made his name patching together the remnants of dying U.S. industries like textiles and steel. And several years of cutthroat competition—and more recently, record-high prices for jet fuel—have left India's nascent airline industry in particular need of help(BusinessWeek.com, 7/7/08). Main Page Hedge Funds India http://www.hedgefundsindia.com/blog/_archives/2008/8/8/3829370.html http://www.hedgefundsindia.com/blog/_archives/2008/8/8/3829370.html Fri, 08 Aug 2008 14:07:00 +0530 Asia-focused hedge funds have taken a beating this year and investors are shying away from managers who not too long ago were seeing double-digit returns. Funds investing in India and China produced the worst performance of any specific hedge fund classification after leading all hedge funds for much of 2007, according to HedgeFund.net. The HFN India and China Averages were down 14.97% and 8.87% in June, respectively, leaving them down 36.88% and 18.77% in the first half of 2008. Venus Capital Management’s $100 million Special Situations Fund, an India-focused event-driven arbitrage and special-situation strategy, is down 22.25% in the first half.Monsoon India Inflection Fund (down 41.1% year-to-date, up 102.38% in 2007) and newcomer Vishwas India Fund (down 24.48% YTD, up 29.58% 2007). Main Page Hedge Funds India http://www.hedgefundsindia.com/blog/_archives/2008/8/8/3829367.html http://www.hedgefundsindia.com/blog/_archives/2008/8/8/3829367.html Fri, 08 Aug 2008 14:04:00 +0530 Launch of trading in currency futures has come at such a time when several Indian corporates have burnt their fingers in another version of currency derivative called Over the Counter (OTC) products few months back, and the issue has turned into a legal battle between suffered companies and banks involved. Though currency futures products like currency swap, currency forwards and currency options were already allowed to corporates in India after Reserve Bank of India's (RBI) circular as on April 2007, but they were not traded on any recognised exchanges in India and were available like OTC products only. As per an official gazette of Government of India (GOI), which is available on RBI's site, a person who is resident of India can now hedge his currency risk by using advanced and complex derivatives like currency forwards, currency swaps and currency options not only through OTC products but also through exchange traded currency futures products. Main Page Hedge Funds India http://www.hedgefundsindia.com/blog/_archives/2008/8/6/3826782.html http://www.hedgefundsindia.com/blog/_archives/2008/8/6/3826782.html Wed, 06 Aug 2008 17:54:00 +0530 The second quarter of 2008 saw Asia-focused hedge funds around the world gain capital inflows of $530 million from investors, says Chicago-based Hedge Fund Research. But the industry’s total assets under management grew by a mere 0.25% (about $200 million to $100.48 billion) because managers have lost $320 million in volatile markets. And while the industry did enjoy net inflows from investors in the second quarter, the gain is nearly half the $1 billion gain from the first quarter, suggesting that investor interest is flagging. As absolute-return vehicles, hedge funds are failing the test this year. Those Asia ex-Japan-focused strategies tracked by HFR have in aggregate lost -15.86% year-to-date, while Japan-only strategies have lost -7.14%, and Asia including Japan strategies are down -8.29%. Main Page Hedge Funds India http://www.hedgefundsindia.com/blog/_archives/2008/8/6/3826778.html http://www.hedgefundsindia.com/blog/_archives/2008/8/6/3826778.html Wed, 06 Aug 2008 17:50:00 +0530 Baer Capital has announced the launch of their new fund that invests in Indian equities, distressed debt and derivatives, further propelling Dubai’s prominence in the hedge fund industry. The Beacon India Alpha Equity Fund is the latest fund aimed at capitalizing on India’s emerging markets. ‘We are extremely excited about the launch of the Beacon India Alpha Equity Fund which is a long short equity fund focused on listed Indian equities and managed by Baer Capital Partners International Ltd,” said Brij Singh, Founder and Chief Executive Officer of Baer Capital Partners. “The Beacon India Alpha Equity Fund is an integral part of our mission to create a ‘Best in Class’ alternative asset management platform focused on India.” Main Page Hedge Funds India http://www.hedgefundsindia.com/blog/_archives/2008/8/5/3825132.html http://www.hedgefundsindia.com/blog/_archives/2008/8/5/3825132.html Tue, 05 Aug 2008 16:43:00 +0530 The restrictions imposed on investments in Indian equities through participatory notes (PNs) last year have seen those foreign investors, who prefer to stay away from the regulatory glare, tapping other routes for investment in the local market. In the past few months, these investors, including global hedge funds, have been increasingly using the equity swap — an unregulated over-the-counter (OTC) derivative contract — to take exposure to the Indian market. An equity swap is an arrangement where a series of future cash flows are made by two counterparties to each other. The pre-determined set of payments, which is based on a notional principal amount, may be determined by returns on stocks or indices or a fixed or floating rate. In the Indian context, a simple equity swap could work this way. Say, a US-based hedge fund, which does not want to be registered with SEBI or with poor credentials, wants to bet on India. It is bearish on India and wants to get the benefits of going short in the markets here. Main Page Hedge Funds India http://www.hedgefundsindia.com/blog/_archives/2008/8/5/3825131.html http://www.hedgefundsindia.com/blog/_archives/2008/8/5/3825131.html Tue, 05 Aug 2008 16:39:00 +0530 Volatile stock markets have become the norm. Real estate requires huge chunks of investment and bank deposit rates are hardly able to keep up with rising inflation rate. Given this scenario, art seems to have become a safe option for investment. Art experts feel that, apart from gold, it is the only commodity which gives steady returns. Art can make its own money over a period of time. The flip side is equally relevant. With surging salaries for technology and finance professionals and a growing middle-class ready to splurge, art in India has many takers. It has also led to art prices increasing substantially over the past decade. Banks have set up art advisories, where high networth individuals (HNIs) are offered advice to select and purchase or sell art works. Several banks have tied-up with auction houses and art galleries for the purpose. A number of financial institutions like Edelweiss Capital and Dawnay Day have also come out with art funds or schemes, trying to cash in on this growing new market. Main Page Hedge Funds India http://www.hedgefundsindia.com/blog/_archives/2008/7/29/3814813.html http://www.hedgefundsindia.com/blog/_archives/2008/7/29/3814813.html Tue, 29 Jul 2008 17:55:00 +0530 With crude oil hogging the headlines, one tends to forget that metals have been especially pathetic performers in the last three months. Lead is 37% cheaper now than on January 1. Nickel has fallen 30% this year, the worst among all LME-traded metals. Even gold has remained flat on average after shooting up 10% in the beginning of 2008 while silver has barely budged. Platinum fell 5% in July. Palladium fell for a 10th session on Friday. Natural gas has fallen more than twice the distance that oil has. The plunge from $13.50 to $9 marks a 33% reversal. Wheat is 7% cheaper than 2007, after shedding 8% since March. With coffee, sugar, cotton, palladium, aluminum, platinum and copper all clocking single-digit price increases over the first quarter of 2008, the big question is has the commodity bubble deflated? And most important, who do you blame for your pain? The answer lies mired in a confusing slush of demand-supply fundamentals, market sentiment and threats from regulators. Main Page Hedge Funds India http://www.hedgefundsindia.com/blog/_archives/2008/7/23/3806424.html http://www.hedgefundsindia.com/blog/_archives/2008/7/23/3806424.html Wed, 23 Jul 2008 18:56:00 +0530 The Commodity Futures Trading Commission said on Tuesday that a government interagency task force has found that the huge jump in oil prices is due to "supply and demand factors" and that speculators are not to blame for high fuel costs. In its interim report, the task force said "preliminary analysis to date does not support the proposition that speculative activity has systematically driven changes in oil prices." The world economy has expanded at its fastest pace in decades, especially in developing countries like China and India, which has led to substantial increases in oil demand, according to the task force.The task force's findings counter many Democratic lawmakers and some energy experts, who argue that the billions of dollars invested in energy markets by hedge funds, pension funds and other speculators have pushed up oil prices. Main Page Hedge Funds India http://www.hedgefundsindia.com/blog/_archives/2008/7/23/3806421.html http://www.hedgefundsindia.com/blog/_archives/2008/7/23/3806421.html Wed, 23 Jul 2008 18:51:00 +0530 A downdraft in the Indian stock market is hammering returns for a hedge fund operated by Boston-based Venus Capital Management, reflecting the challenges of investing in volatile emerging markets. The Venus Special Situations Fund, a $100 million long-short hedge fund focused only on India, is down 22.25 percent in the first half, according to a July 15 investor note obtained by Reuters. The performance of the fund comes amid a sharp fall this year in Indian stocks, with the S&P CNX Nifty index of 50 stocks down nearly 40 percent in dollar terms through June. Vic Mehrotra, CEO and founder of Venus Capital, said he is positioning the portfolio for more market declines this year in India, where investors are worried about higher oil prices, inflation and political turmoil. Main Page Hedge Funds India http://www.hedgefundsindia.com/blog/_archives/2008/7/20/3801526.html http://www.hedgefundsindia.com/blog/_archives/2008/7/20/3801526.html Sun, 20 Jul 2008 18:39:00 +0530 There is little evidence to support suspicions that speculators are the culprits behind rising world food prices, a new report argues. Rather, the fundamental causes are increasing demand in developing countries for protein-based diets, stagnating agricultural productivity, demand from bio-fuels producers and government controls that limit output and trading, the Conference Board of Canada report concludes. For example, it noted that some governments have reacted to food shortages by putting limits on exports to build up their inventories, or in other words by hoarding food, citing as examples India, Russia and Argentina.Instead, it urges governments and the global agricultural industry to look at ways to restructure markets to address those causes.However, the spread of securitization of food commodities can be seen as an effect, rather than a cause, of the rise in world food prices, she said, adding that it's only when prices for underlying commodities are volatile does it become worthwhile for speculators and investors to seek profit in betting on price changes.Producers are protected from falling prices by purchasing futures, it said. Main Page Hedge Funds India http://www.hedgefundsindia.com/blog/_archives/2008/7/15/3793913.html http://www.hedgefundsindia.com/blog/_archives/2008/7/15/3793913.html Tue, 15 Jul 2008 18:23:00 +0530 The futures markets were restarted in India less than five years ago with much fanfare and as a much-needed price discovery mechanism, especially for agricultural commodities. It was also envisaged to be a platform for hedging, i.e. price risk management for producers (read farmers), consumers, processors and traders. In many ways, it was a godsend for farmers in particular because agri-commodities see wide price fluctuations exposing the farmer to unnecessary price risks. The logical response of any government would be to ensure that farmers have a fair and transparent pricing mechanism available for their products. Even the Abhijeet Sen committee report, in its second point of reference, was clearly asked to find ways to increase the participation of farmer in futures trading. Instead, the government has gone ahead and banned futures trading in eight of the most economically important agricommodities and even as it is itself hedging wheat on the Chicago Board of Trade. At the very least, the dichotomy between banning wheat futures here and then going and hedging in the US market it intriguing. What’s sauce for the goose must be sauce for the gander. Main Page Hedge Funds India http://www.hedgefundsindia.com/blog/_archives/2008/7/14/3791867.html http://www.hedgefundsindia.com/blog/_archives/2008/7/14/3791867.html Mon, 14 Jul 2008 17:02:00 +0530 Billionaire global investor George Soros has turned contrarian on the Indian stock market, which has seen stocks being beaten down over the past few weeks. His hedge fund Quantum, which was reported to have posted earnings of over 30% last year, went on a buying-spree at a time, when most funds were dumping stocks in a sliding market. On July 4, Quantum Fund bought a 3.8% equity in Jain Irrigation Systems, and close to 1% of the holding of Jai Corp for a value consideration of Rs 167 crore. Since February, the fund has made investments valued at close to Rs 600 crore, or $ 140 million, in various companies, including Indiabulls Financial Services, Indiabulls Real Estate and Kalindee Rail Nirman. “Hedge funds normally are active, when there is some momentum in the market. Quantum may be trying to do some value-buying, but one has to see how long the fund stays invested, given the prevailing uncertain market conditions,” said a stock broker. Since hedge funds mostly operate as sub-accounts of foreign institutional investors (FIIs), their activity is also reflected in the flows of foreign portfolio investors on Indian bourses. These investors have pulled out funds aggregating Rs 30,000 crore, or $7 billion, of Indian equities while the Sensex crashed 7400 points, or 35%, from its peak of 20873 on January 8. Main Page Hedge Funds India http://www.hedgefundsindia.com/blog/_archives/2008/7/12/3789077.html http://www.hedgefundsindia.com/blog/_archives/2008/7/12/3789077.html Sat, 12 Jul 2008 13:25:00 +0530 Indian stock markets have been witnessing a bloodbath of late, and India-focused hedge funds, which earlier were pushing up the market to unprecedented heights, are now looking to benefit from the slide by going short on India, reports say. Many are doing so by borrowing shares from foreign institutional investors and then dumping those shares in the market. So far in 2008, foreign investors have sold a net USD6.5bn worth of shares, and a sizeable portion of those sales are believed to have been made by hedge funds, according to the Economic Times. But experts are unsure whether the recent spate of sales by hedge funds stems from redemption pressure or market strategy. With credit concerns governing investment decisions, many hedge funds now have a lower risk tolerance that is driving sentiment across the globe. Main Page Hedge Funds India http://www.hedgefundsindia.com/blog/_archives/2008/7/8/3782065.html http://www.hedgefundsindia.com/blog/_archives/2008/7/8/3782065.html Tue, 08 Jul 2008 16:39:00 +0530 A storm of speculation is driving global coffee prices to sky high. The green bean, that suffered a severe market set-back couple of years ago, is now on a bull run. Fuelled by unrealistic speculations of aggressive hedge funds and mutual funds on futures terminals in London (robusta) and New York (arabica), the prices of commodity have risen sharply from 100 cents pound barely six months ago to 150 cents now."This has exposed commodity to lot of criticism as price hike was not triggered by legitimate price discovery mechanism called demand and supply. There's plenty of stock in the market, also a bumper crop from Brazil is hitting the market anytime this month," said a market observer. Speculatory positions worth $12 trillion are currently held by big five wall street investors on New York Mercantile Exchange (Nymex), in the petroleum sector. A similar scenario is happening in the agriculture commodities markets as well. The bulk stocks are held by limited number of players and they are dictating the market. Main Page Hedge Funds India http://www.hedgefundsindia.com/blog/_archives/2008/7/6/3777987.html http://www.hedgefundsindia.com/blog/_archives/2008/7/6/3777987.html Sun, 06 Jul 2008 12:23:00 +0530 With stock prices in a free fall, India-obsessed hedge funds that were pushing up the market to dizzying levels are now looking to benefit from the slide by going short on India. Many of them are said to be doing so by borrowing shares from foreign institutional investors (FIIs) allowed to issue participatory notes, and then dumping those shares in the market. So far in 2008, FIIs have net sold $6.5 billion worth of shares, and a sizeable portion of those sales are believed to have been punched in by hedge funds. Market observers are not sure if the recent bout of sales by hedge funds is a result of redemption pressure or arising from a certain market strategy. “The five to 10-year picture still looks good. It is the next 6-12 months which is a question mark,” said Parth Gandhi, MD of Vision Global Investments, a hedge fund. He is of the view that for a long-only fund, the equities market at these levels provide attractive bargains. “The trick is to identify one’s risk profile and thereafter look at individual stock positions one has,” he added. Main Page Hedge Funds India http://www.hedgefundsindia.com/blog/_archives/2008/7/6/3777976.html http://www.hedgefundsindia.com/blog/_archives/2008/7/6/3777976.html Sun, 06 Jul 2008 12:03:00 +0530 China is depressing the carbon credit business by only proposing projects under the clean development mechanism (CDM) and not implementing them in a hurry, and trading the credits in the futures market. As a result, India, despite having the world’s highest number of projects registered under the CDM, is getting less for its carbon credits. While India has 333 of the world’s total of 1108 CDM projects, China has 234. Sudipta Das, partner for Risk Advisory Services at Ernst & Young, said many Chinese companies are indulging in carbon futures and selling CER at a much lower price without even registering a project with the designated authority. This is happening because of a loophole in the norms for transacting carbon credits. While the spot market prices for a CER or certified emission reduction is at above euro 20, the future prices are quoted at around euro 10-12. Future trading in carbon at present is more sensible as it is being considered as an asset class, observers said. Observers feel that with the emergence of carbon as an asset class for hedge funds, clean-tech venture capital and private equity investors, segmenting carbon bonds into primary and secondary CERs has become important, as it would give rise to a broker class. According to European market projections, by 2012, CER prices are expected to go up to euro 22.96 from around euro 20.88 at present. Main Page Hedge Funds India http://www.hedgefundsindia.com/blog/_archives/2008/6/21/3755677.html http://www.hedgefundsindia.com/blog/_archives/2008/6/21/3755677.html Sat, 21 Jun 2008 17:14:00 +0530 Water is similar to what oil is or once was -- undervalued and taken for granted, and consumers could soon pay a real price for it. Analysts say increased demand for clean water has been driving up the cost, bad news for a world already concerned about rising food prices. Agriculture is the world's top water user, accounting for an estimated 70% of total global consumption. The world's scarcity of clean water is widely known, yet it's still one of the cheapest commodities in the world. Municipal water rates have climbed by an average of 58% in Canada, 50% in South Africa, and 27% in the U.S., according to an Earth Policy Institute report issued last year. In a survey of 14 countries, average municipal water prices ranged from 66 cents per cubic meter in the U.S. up to $2.25 in Demark and Germany, it said. Demand for corn to create ethanol has helped lift corn prices to their highest levels ever. "Demand for corn at ethanol plants is huge, but demand for water for ethanol plants is even bigger," said Kerr, who is also president of Kerr Trading International. Ethanol is very water intensive, said Mayer.So droughts can reduce the global harvest and the water crisis can "naturally feed inflation," said MoneyandMarket.com's Brodrick. "As water prices rise, there is a mighty river of profits, just waiting to be tapped," said Brodrick. As water is becoming a critical resource throughout the world, it is also turning into a commodity that can be traded. A sure sign of it is the slow emergence of water hedge funds. Buying stock in companies that make bottled water is a good option. And there are water exchange-traded funds, such as PowerShares Water Resources Portfolio , which hold a basket of stocks of companies involved in the production, treatment and distribution of water, said Brodrick. Main Page Hedge Funds India http://www.hedgefundsindia.com/blog/_archives/2008/6/15/3745643.html http://www.hedgefundsindia.com/blog/_archives/2008/6/15/3745643.html Sun, 15 Jun 2008 18:59:00 +0530 In light of the recent rise in crude oil and other commodity prices and the influx of new investors into commodity futures markets, the Commodity Futures Trading Commission (CFTC) is announcing the formation of an interagency task force to evaluate developments in commodity markets. The CFTC is looking at changing commodity rules to force big funds to disgorge multi thousand contracts positions. We could be looking at a forced liquidation – similar to the silver liquidation that happened in the big metal run up and silver corner by the Hunt brothers. That episode resulted in huge losses for the Hunts – who were forced out at huge losses after they tried to corner the silver market.The entire world is up in arms about the energy and food shortages. It does not matter that the shortages are the real culprits. The fact is, pretty much all the nations are getting ready to force speculators out of these markets.The fact is that, in a world food crisis, this is going to force poor people to pay – tribute – to big investors to eat. The world governments are not going to allow that to happen if they can stop it. Main Page Hedge Funds India http://www.hedgefundsindia.com/blog/_archives/2008/6/15/3745637.html http://www.hedgefundsindia.com/blog/_archives/2008/6/15/3745637.html Sun, 15 Jun 2008 18:49:00 +0530 Gartmore head of global emerging markets Chris Palmer is net short Indian stocks and is concerned about government interference in private enterprise and a lack of financing for growing firms, he told Reuters. Palmer, who manages a range of portfolios including the $1 billion (513 million pounds) Gartmore Sicav Emerging Markets fund, said his long-only funds have been cutting back exposure to India, while his hedge funds are net short. Shorting means betting on a lower price for a security in the future. "Public policy in India has deteriorated substantially in the last two years," he told the Reuters Investment Outlook Summit in London. "Policy towards pricing, how private enterprise can price their services and goods, the level of government interference in the general price levels is accelerating," he said. Main Page Hedge Funds India http://www.hedgefundsindia.com/blog/_archives/2008/6/11/3739492.html http://www.hedgefundsindia.com/blog/_archives/2008/6/11/3739492.html Wed, 11 Jun 2008 21:51:00 +0530 Is it likely for hedge fund fees to come down? Scott Frush grapples with these and more questions in ‘Hedge Funds Demystified’ (www.tatamcgrawhill.com). He is of the view that the issue is not ‘if’ but ‘when’ hedge fund fees will decline overall. Asset-based fees are most likely to remain largely intact and untouched, but performance-incentive fees will see pressure owing to two primary factors, Frush foresees. The first factor is that with so many new hedge funds being established, managers will reduce their rates from the typical 20 per cent of profits. Second, with many institutional investors increasing their allocations to hedge funds, pressure to reduce rates will increase, he adds. “These institutions will swap capital invested for a reduced rate – a quantity discount of sorts.” Another prediction of the author is that soon hedge fund investors will be able to hold index-based derivatives, now in their infancy. “In addition, hedge fund indices themselves will improve because there is a concerted effort by data providers and hedge fund managers to provide the best data possible to construct acceptable indices.” Main Page Hedge Funds India http://www.hedgefundsindia.com/blog/_archives/2008/6/7/3732528.html http://www.hedgefundsindia.com/blog/_archives/2008/6/7/3732528.html Sat, 07 Jun 2008 12:54:00 +0530 Raw cotton prices are witnessing a surge owing to a fall in global production by up to 5-7% this year and greater demand. Till May 2008, more than 95 lakh bales of raw cotton were exported to countries like China, Pakistan, Bangladesh and Taiwan," said Anandbhai Popat, secretary of Saurashtra Ginners Association. According to experts, the main reason for the fall in production is a shift by major cotton producers like the US to more lucrative crops like corn. Besides India and the US, China and South Africa are the other major producers of cotton."US hedge funds are looking at cotton as a lucrative investment. Moreover, rising demand for cotton has led to the price escalation. The price of US cotton for December 2008 future contract has witnessed a steep hike - from 70 cents per lbs to 98 cents per lbs in the last two months, coming down to 82 cents per lbs at present," said Mr Popat. Main Page Hedge Funds India http://www.hedgefundsindia.com/blog/_archives/2008/6/1/3723499.html http://www.hedgefundsindia.com/blog/_archives/2008/6/1/3723499.html Sun, 01 Jun 2008 19:11:00 +0530 There is a tremendous hype all over the world about the wonders of investing in timber, rhodium, carbon emissions credits, private equity funds and various ETFs (Exchange Traded Funds) that seek to double the return of wheat, corn, soybeans and the like. Each week, over the last four months, between $5 billion and $10 billion of fresh money has poured into the Goldman Sachs Commodity Index, the Dow Jones-AIG Commodity Index and other Index Funds, which now total over $200 billion. Hedge funds, banks and pension funds have poured capital into oil trading in recent years, betting that demand will outstrip supply. Such bets have become self-fulfilling prophecies, helping to push prices higher. Trading volume in commodity futures and options contracts has soared across the globe, with the number of agricultural contracts gaining 32 per cent from a year earlier, followed by industrial metals and energy products, which increased by 29.7 per cent and 28.6 per cent respectively, according to the Futures Industry Association.With a global slump in economies, speculators have moved from stocks to commodities. Main Page Hedge Funds India http://www.hedgefundsindia.com/blog/_archives/2008/5/29/3718472.html http://www.hedgefundsindia.com/blog/_archives/2008/5/29/3718472.html Thu, 29 May 2008 13:46:00 +0530 The saga of Indian securities laws regulating offshore derivative instruments (popularly called "participatory notes" or "P-Notes") has just had a new chapter. The Securities Appellate Tribunal ("SAT") has ruled that the Securities and Exchange Board of India ("Sebi") was wrong in insisting that foreign institutional investors ("FIIs") should furnish an undertaking that they have not issued P-Notes to certain select types of persons. While issuance of P-Notes against underlying holding in exchange-traded options and futures was banned by Sebi last year, there can obviously be no legitimate ban on a foreign person issuing P-Notes against holdings in Nifty futures ((Nifty is the National Stock Exchange's flagship index) that are traded on the Singapore Exchange. It would be foolhardy to believe that movements in the Nifty futures in Singapore would be insulated from impacting price movements in Indian securities. Therefore, the ban on derivatives-based P-Notes can become quite meaningless. It is time to take an intense and hard look at the regulatory framework for P-Notes and ask some existential questions. Main Page Hedge Funds India http://www.hedgefundsindia.com/blog/_archives/2008/5/29/3718468.html http://www.hedgefundsindia.com/blog/_archives/2008/5/29/3718468.html Thu, 29 May 2008 13:39:00 +0530 A Bear Stearns managing director is readying an India-focused multi-strategy fund of hedge funds for launch in July with between $10 million and $20 million in initial assets. Ridaa Murad, who has built India-focused synthetic swaps, corporate finance and equities products for Bear Stearns since 2003, has set up New York-based Veda Asset Management with Bradford Matthews, who owns a broker/dealer in India. The Veda Multi-Strategy India Fund will initially include seven managers, eventually increasing its stable to about a dozen. Most of the managers are based in India, Singapore or Hong Kong, with a few based in the U.S. “Our strategy is to try and be as cycle- and asset class-agnostic as possible, so we’re not just equities and not just single directional,” said Murad. “We have direct lending, debt lending, convertible arbitrage and distressed-debt managers. We also have managers in the futures and options arbitrage space, private equity and real estate, as well as long/short and long-biased managers. Given the market in India, we think the opportunities are not just in one part of the market cycle and the trick to investing in India is buying the sell-off.” Main Page Hedge Funds India http://www.hedgefundsindia.com/blog/_archives/2008/5/29/3718466.html http://www.hedgefundsindia.com/blog/_archives/2008/5/29/3718466.html Thu, 29 May 2008 13:38:00 +0530 The Blackstone Group announced that Aaron Nieman will be launching Blackstone Altius Advisors, a new event-driven strategy focusing on opportunities in the Asia Pacific region. A global, highly experienced investment team will be headquartered in Hong Kong, with additional professionals based in Tokyo, Mumbai, and New York. Nieman joined Blackstone from S.A.C. Capital Management, where he was a Managing Director in the Canvas Capital Management division. "As Blackstone continues to aggressively seek opportunities within Asia, Aaron and his team will provide additional investment capability that will bolster our presence in the region." said Antony Leung, Chairman of Blackstone Greater China. Main Page Hedge Funds India http://www.hedgefundsindia.com/blog/_archives/2008/5/24/3708932.html http://www.hedgefundsindia.com/blog/_archives/2008/5/24/3708932.html Sat, 24 May 2008 14:47:00 +0530 With oil prices fast approaching USD130 a barrel and a global food crisis looming, the US Senate Committee on Homeland Security and Governmental Affairs is scrutinising the role of financial speculators in the commodities markets. This week senators have been listening to testimony on how speculative investment by hedge fund managers and others may be contributing to food and energy price inflation. Hedge fund manager Michael Masters, of Atlanta-based Masters Capital Management, argues that commodities prices are being driven up by institutional investors, including pension funds, sovereign wealth funds and university endowments, which are investing in commodity futures based on indices as a hedge against inflation. Once again, hedge funds have been dragged in as an explanation for why certain prices are behaving abnormally. The fact is that speculators have always existed in the commodities trade, and investment from hedge funds - speculative or otherwise - is nothing new. Main Page Hedge Funds India http://www.hedgefundsindia.com/blog/_archives/2008/5/21/3702895.html http://www.hedgefundsindia.com/blog/_archives/2008/5/21/3702895.html Wed, 21 May 2008 11:19:00 +0530 Blackstone Group, a global private equity player, is set to increase its focus on India. After setting the ball rolling on its corporate private equity and recently starting off its real estate opportunity focus, the company during the past week has set up Blackstone Altius Advisors, an event-driven strategy focusing on opportunities in the Asia Pacific region. According to a statement from Blackstone, a global, highly-experienced investment team will be headquartered in Hong Kong, with additional professionals based in Tokyo, Mumbai and New York for the foray. Estimates indicate that close to $1 billion has already been committed by this player to the Indian market. The statement from Blackstone further added that its Asia business includes its fund of hedge funds and two close-end mutual funds – The India Fund and The Asia Tigers Fund. Main Page