Banks’ Commodities Revenue incurring losses
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banking branches in Asia are the only region
expanding in commodities revenue, as demand for raw materials increases.
Revenue advanced 9 % to $380 million in the Asia-Pacific region in the first
six months.
On the other hand, the political crisis in Libya, and economic coldness of Saudi Arabia due to the Syrian crisis, weighed on the leading commodity oil producer is not likely to embellish. While metals recorded some improvement, but numbers are still not convincing.
As usual in such situations, banks shall activate a logical massive storage of certain raw materials and therefore increase the prices, a much criticized method, the Fed plans to take new measures...
Low volatility has dampened trading activity and in turn reduced
fees, while new restrictions on proprietary trading and stringent new capital
requirements will make it much more expensive to trade and invest in riskier
assets such as commodities.
Investment bank
revenue from commodities trading dropped by about a quarter last year due to
lower volatility and dull client business, financial sector consultant according
to Coalition, a London-based research company.
Turnover in commodities was also affected due to strict regulation and more accurate capital
requirements, Coalition said in a report on overall performance by the world's
10 biggest investment banks. The total shrank to $1.6 billion from $1.97
billion due to lack of volatility, losses and “poor client activity,” Coalition
said today. Commodity revenue at their U.S. units declined 42 percent to
$760 million from $1.3 billion at the same time, it said.
“The main issue for the banks in Europe and U.S. is the low
volatility within the energy products, and on top of that very low client
activity and some asset outflows from the commodity investor products,” George
Kuznetsov, head of research and analysis at Coalition, said in a phone interview
from London today. “The metals business from our perspective is doing slightly
better and part of that is precious metals which we see improving.”
On the other hand, the political crisis in Libya, and economic coldness of Saudi Arabia due to the Syrian crisis, weighed on the leading commodity oil producer is not likely to embellish. While metals recorded some improvement, but numbers are still not convincing.
As usual in such situations, banks shall activate a logical massive storage of certain raw materials and therefore increase the prices, a much criticized method, the Fed plans to take new measures...
Obviously the end of 2013 year will be very complicated.
