Demand for commodities this year has been the highest since the financial crisis, according to Barclays.
Total capital inflows in commodities totaled $ 50.8 billion.
This trend, along with rising prices, have pushed commodity assets under management to the mark of $ 235 billion, compared with $ 161 billion at the end of 2015. Gold rose by 29%, while oil – by 12%, and silver – by 47% since the beginning of the year.
However, the best time for capital inflows into commodity assets is likely to be over, as the July figure was the highest, say the analysts led by Michael Cohen. The total inflow in June and July amounted to $ 8 billion.
They warn that outflows could resume this year.
One of the reasons is that the inflows of investment capital had the character of the “refuge” against the backdrop of uncertainty associated with Brexit and presidential elections in the United States. Most of such inflows were allotted to gold.
And finally, commodity Bloomberg index shows that profits remained unchanged in the first quarter, and in the second – rose up by 14%, while since the beginning of the third quarter they fell by 8.4%.
Secondly, tactical demand also plays a decisive role. Indices were less popular than individual commodities.
“Commodity prices tend to show impressive growth in the first half of the year, and to demonstrate the recession in the second”, – says Cohen.
In the second half of the year, analysts expect a decline of commodity indices, and while the oil recovers in the last quarter of the year, it will not exceed the yearly highs, at around $ 50.
In addition, Barclays notes the decline of enthusiasm for commodities in the ranks of asset managers.
“Net long positions have already begun to decline”, – concludes Barclays.
Retail investors fear the domination of LSE-Deutsche Boerse
The Association of European retail investors opposes the union of Deutsche Boerse and London Stock Exchange, since it will have negative impact on competition in Europe.
United exchange operators will occupy the dominant position, claims the association in its letter to the European Commissioner Margrethe Vestager.
The union of exchange operators would nullify all the efforts of competition promotion by limiting the freedom of choice, and would have a negative impact on small markets regulated by Euronext, says the head of the association Paul Koster.
Investors of Deutsche Boerse and LSE came to the merger agreement, but it must be approved by the European Commission and the national regulators.
“Uniting London, Milan and Frankfurt by the liquidity bridge, this merger will stimulate economic growth and job creation, maintaining the unity of capital markets”, – said a spokesman of Deutsche Boerse.