Иена росла, тогда как британский фунт падал вместе с фьючерсами на американские индексы; инвесторы перешли в режим неприятия рисков после атаки в Британии, а также на фоне последних новостей об администрации Трампа. Японская валюта росла против всех основных, фьючерсы на S&P 500 падали после сообщений о том, что Трамп попросил руководство разведки лично опровергнуть его связи с Россией во время предвыборной кампании. Фунт снижался после того, как стало известно, что террористический акт в Манчестере унес жизни, как минимум, 22 человек. Мексиканский песо снижался после того, как в S&P заявили, что могут понизить суверенный рейтинг Бразилии. Акции Noble Group Ltd. снижались на опасениях вокруг дефолта. Нефть упала ниже $51. Политическая нестабильность в Вашингтоне снова вышла на первый план, сместив в сторону проблемы с глобальным экономическим ростом. Президент США в марте попросил руководителя нацразвездки Даниэля Котса, а также директора Управления по нацбезопасности Майкла Роджерса публично опровергнуть связь предвыборной кампании с российским правительством, написали в Washington Post, ссылаясь на неназванных текущих и бывших сотрудников агентств. Теракт в Манчестере станет крупнейшей атакой на Британию с 2005 года. Британская полиция заявила о том, что террористический акт был осуществлен смертником. Фьючерсы на S&P 500 снизились на 0.1% по состоянию на 8:15 в Лондоне. Индекс вырос на 0.5% в понедельник. Stoxx Europe 600 демонстрировал незначительные изменения в динамике. Японский Topix снизился на 0.2% после колебаний между ростом и снижением. Южнокорейский Kospi вырос на 0.3%. Гонконгский Hang Seng снизился на 0.1%, Shanghai Composite потерял 0.5%. Manchester Blast, Trump Concern Spur Risk-Off Tone, Bloomberg, May 23Источник: FxTeam
For commodity traders operating in the Information Age, Bloomberg reports that just good old trading doesn’t cut it anymore... "Everything is transparent, everybody knows everything and has access to information." Unlike the stock market in which transactions are typically based on information that’s public, firms that buy and sell raw materials thrived for decades in an opaque world where their metier relied on knowledge privy only to a few. Now, technological development, expanding sources of data, more sophisticated producers and consumers as well as transparency surrounding deals are eroding their advantage. Just ask Noble Group... At a panel discussing ‘What’s Next for Commodity Trading: Drivers, Disruptors and Opportunities’, Bloomberg reports that Sunny Verghese, the chief executive officer of food trader Olam International Ltd., lamented declining margins. “The consumers and producers are trying to eat our lunch. So we got to be smart about differentiating ourselves,” he said. As market participants’ access to information increases, the traders highlighted the need to more than simply buy and sell commodities as profits from arbitrage -- or gains made from a differential in prices -- shrinks. That means getting involved in the supply chain by potentially buying into infrastructure that’s key to the production and distribution of raw materials, and also providing financing for the development of such assets. “The most valuable commodity out there is information, and the most useful information is the proprietary, critical information that you obtain from your own supply chain,” said John Driscoll, the chief strategist at JTD Energy Services Pte, who has spent more than 30 years in the petroleum trading industry in Singapore. “You have to have skin in the game. You have to have access to assets, whether it’s infrastructure, terminals, vessels or refineries.” It’s critical for commodity traders to evolve as margins have declined because of more transparency and “price arbitrage has disappeared,” said Olam’s Verghese. For example, the number of price quotes published by agencies such as S&P Global Platts and Argus, which assess the value of commodities globally, have increased about 15 times since 1990, according to Verghese. While “arbitrage is dead,” traders will “continue to have substantial opportunity and disruption but the way of capturing that opportunity becomes more sophisticated,” Mercuria’s Jaeggi said.
Once Asia's largest commodity trader, Noble Group has been halted after crashing almost 30% this morning following S&P lowering its corporate credit rist rating to CCC+, citing continuing weak cash flows and profitability... "We downgraded Noble because we believe the company's capital structure is not sustainable," "The negative outlook on Noble reflects the potential that the company will face distress and a non-payment of its debt obligations over the next 12 months," This is the lowest prices for the Singapore-based firm since 2001... This has been coming for a while, as we warned a year ago... Noble's "Margin Call" Part II - The Enron Moment By Simon Jacques "Our balance sheet - the strongest in recent history - represents a significant advantage as we continue to identify high value growth opportunities across the products and geographies we operate in. Maintaining our investment grade rating with the international rating agencies is a vital part of this strategy." - Noble Group 2014 Annual Report, p. 27 * * * * * "Moody's Investors Service has downgraded Noble Group Limited's senior unsecured bond ratings to Ba1 from Baa3 and the provisional rating on its senior unsecured MTN program to (P)Ba1 from (P)Baa3." - Moody's, December 29, 2015 * * * * * "Noble Group Downgraded To 'BB+' On Weakened Liquidity; Notes Lowered To 'BB'; Ratings Still On CreditWatch Negative" - Standard & Poors, January 7, 2016 The story of Noble is worth writing a book, mostly of how not to run your business. If they are in this mess, it is in large part because the management was comprised predominantly of traders who were predisposed to defend their books. Noble has been desperately trying to revive their image by hiring former Goldman, JP. Morgan, Trafigura executives etc. By doing so they were looking for a form of credibility collateral. It didn’t work well for the new employees as they rapidly found out that they inherited from the liabilities of one decade of Noble’s poor decision making of the hard-core asset guys like William J. Randall and ex-Goldman Sach banker Yusuf Alireza. In the part II of this analysis we will review the gap between the liquidity headroom and the debt maturity profile of the trader and explain how Noble Group will have its Enron moment. The fatal mistake that Noble Group did was apparently to mislead the market about their financial performance "presumably" by using accounting devices. During last November, Noble Group's chief financial officer Robert van der Zalm has stepped down from his position after taking a leave of absence for “health reasons”. Two months later, Moody’s downgraded Noble Group. In a very awaited decision, Standard & Poor’s has finally lowered Noble Group’s to junk, placing Asia’s largest commodity trader on watch for further possible as the rating agency remains skeptical about the liquidity headroom of the trader. According to Noble Group, on September 30th 2015, the company had $15.5bn banking facilities and $1.669B in RMI (ready marketable inventories). $11.1bn of these $15.5bn banking facilities is uncommitted and are contingent on ability of maintaining investment-grade rating in the future. Noble claims to have $900M of cash and 1.669B$ in RMI (ready and marketable inventories). Their 1.669B$ in RMI have claims on related- party notes that are under collateralized by their commodity merchant activity and therefore should be excluded from their liquidity headroom. Noble Group currently uses $3.4B of borrowing facilities that are uncommitted. Noble Group is left with only 1B$ of unutilized committed borrowing facilities and $900M of cash ready available to meet $2.966B of debt scheduled in the next 12 months. Source: Noble Group MD&A Q-3 2015 Moreover, Noble Group counts on the completion of the Noble Agri stake divesture to reap $750M, a transaction which may not be completed by February 2016. Adding the 1B$ of unused uncommitted borrowing facilities plus the $750M of Noble Agri and the $900M of cash that Noble claims to have, Noble is still short by $316M. With the S&P downgrade, the total collateral margin call on Noble Group could be as much as $3.4B, banking facilities that are uncommitted and contingent on the ability of maintaining their investment-grade rating. Noble will have its Enron Moment. Enron's bankruptcy occurred on November 2001 and was triggered by S&P's downgrade of its debt below investment grade, activating a call provision in some loan indentures with principal amounts totaling $4 billion, cash and liquidity that suddenly Enron didn’t have. After the quick sale of Noble Agri, Noble’s core business remains its coal & energy – two very depressed commodities for the foreseeable future, and with no cash-flows to pay its debt and a sudden tightening of the credit, the trader is a cancer patient on the forward curve.
The so-called 'smart-money' has been piling into short silver positions in the last few weeks (creating the biggest hedge fund silver short in two years as of last week)... as silver rebounds from a record losing streak. The last two times hedgies were this short, silver managed notable gains... It appears that after a record-breaking streak of losing days - amid what may have been forced liquidations from Noble Group... $16 has brought back the buyers (and perhaps Noble has ceased its commodity liquidations).
S&P credit rating downgrade adds to pressure on Asian commodities trader
Investors reacted badly to the commodities trader’s latest weak results