Remember commodities were rather hot during the bull run in 2007? Many banks and fund management companies began to introduce new commodities fund to feed the desperate demands in Singapore. Many people who bought commodities at that time would have suffered a great loss as the commodities dived with the stock prices during the crash.
But how about now? Jim Rogers is still pretty bullish on commodities. He said that if the economy does improve, likewise the stock market, commodities will be back in demand and prices will increase. Otherwise, if the market does not recover, he believes the only thing that can make you money will be commodities and not company shares, because people will still require commodities in their daily lives. In fact, because there will not be enough capital to fund development and production of commodities, supply may drop. You may want to watch the following video which captured the interview with Jim Rogers:
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Indeed commodities prices have been rising steadily in the year of 2009. At the time of writing, gold price has shot above US$1000/ounce from the low of US$680+ in late 2008. I have heard prediction of gold going to US$2000/ounce and crude oil to US$200 per barrel. Do you believe commodities will rise again? Here are some of the ways you can capitalize:
Commodities ETF
Lyxor ETF Commodities CRB
Managed by Lyxor International Asset Management which is a subsidiary of French bank, Societe Generale. The ETF uses Reuters/Jefferies CRB Index as the benchmark. They will try to maintain the portoflio of commodities exposure as closely as possible to that of the Index.
Lyxor ETF Commodities CRB Non Energy
Similar to the above mentioned but the difference would be the Index that it is trying to achieve will not have energy commodities in it, like crude oil. Crude oil takes a rather large percentage in the CRB index and by leaving it out, exposure to other commodities like agriculture and heavy metals will be more substantial.
SPDR Gold Shares
A gold ETF cross listed in SGX from NYSE. More details can be found in a previous post, “You want to buy Gold?“
Commodities related companies
Golden Agri-Resources
Component of STI = one of top 30 companies in Singapore by capitalization. Owns 401,000 hectares located in Indonesia, and operates 33 palm oil processing mills, three refineries and five kernel crushing plants. The Company’s primary activities include cultivating and harvesting of oil palm trees; processing of fresh fruit bunch into crude palm oil (“CPO”) and palm kernel oil; and refining CPO into value-added products such as cooking oil, margarine and shortening.
First Resources
The primary business activities are cultivation and harvesting of oil palms, and the processing of fresh fruit bunches into crude palm oil for local and export sales. It manages more than 97,000 hectares of planted oil palm plantations and operate 8 palm oil mills in Indonesia.
Indofood Agri Resources
A subsidiary of IndoFood. Plantations and operations mainly in Indonesia. Activities include oil palm seed breeding, oil palm cultivation and milling, in addition to refining, branding and marketing of cooking oil, margarine, shortening and the other palm oil derivative products.
Kencana Agri
An Indonesian company listed in SGX. Owns palm oil plantations in Sumatra and Kalimantan.
Noble Group
Component of STI = one of top 30 companies in Singapore by capitalization. Manages the global supply chain of agricultural, industrial and energy products.
Olam International
Component of STI = one of top 30 companies in Singapore by capitalization. 3 main businesses dealing with commodities. First being trading commodities. Second is their involvement in processing commodity products like grading of coffee, pressing of cocoa beans, shelling and blanching of cashews and other edible nuts, ginning of seed cotton to cotton lint, to sawing of timber logs to sawn timber and milling and polishing of rice. Third, they specialize in supply chain management, transporting and distributing commodities.
Straits Asia Resources
A subsidiary of Straits Resources (Australian company) and core business in coal mining. It owns Sebuku mine on Sebuku Island in South East Kalimantan, and Jembayan mine near Samarinda in East Kalimantan.
Wilmar
Component of STI = one of top 30 companies in Singapore by capitalization. Business in oil palm cultivation, edible oils refining, oilseeds crushing, consumer pack edible oils processing and merchandising, specialty fats, oleochemicals and biodiesel manufacturing, and grains processing and merchandising.
Hi Alvin, I’ve happened to chance across your blog and I think it’s really great. Many thanks for sharing your experiences and knowledge. Do you know where can I download historical data for S’pore-listed ETFs? I’m interested in doing some price analysis but I can’t seem to find the data. Many thanks!
You can try SGX, if not, the alternative that I can think of is Shareinvestor, but you will have to pay for the data.
Hi Alvin
Do you know if there is crude ETF listed in SGX?
There isn’t. I think the closest is Lyxor Commodities ETF