Trading Commodities Workshop: Applying Theories to the Real World

Transcription

1 Trading Commodities Workshop: Applying Theories to the Real World Venue: M Hotel Singapore 81 Anson Road, Singapore Date: July 2010 Time: By: 9.00am to 5.00pm Emma Jenkins Director EJJ International Limited This 3-days intensive workshop lays out the main features of commodity markets and focuses on the techniques available in the paper markets for managing commodity price risks. Some discussion on physical markets is included to provide the context for certain characteristics of the financial markets. The programme balances lectures with real life case studies, plus attendees participate in hands-on workshops sessions to tease out the subtler aspects of working in the commodity space. Course participants will gain a practical toolkit for dealing with the rapidly evolving world of commodity products. As a participant in the CFA Institute Approved-Provider Program, CFA Singapore has determined that this event qualifies for 21 credit hours. If you are a CFA Institute member, CE credit for your attendance at this event will be automatically recorded in your CE diary. Funding The Monetary Authority of Singapore (MAS) administers grants to financial sector organisations that sponsor eligible participants to training programmes that meet qualifying criteria. For enquiries, please contact the MAS at or via at fsdf@mas.gov.sg. Please refer to next page for Course Information

2 Course Information Who Should Attend? CEOs Pension fund trustees and managers CIOs Marketing managers Portfolio managers Risk managers Client and relationship managers Investment bankers Auditors Procurement Managers Finance directors and treasurers Commodities Traders Credit Controllers Quantitative Analysts Please refer to next page for Course Description

3 Course Description Why commodities are different to other financial assets? - Define what commodities are - Identification of price drivers and their impact on commodity price processes - Examining the cyclical nature of commodity prices - When is a spot price not a spot price? - Why certain shapes of forward curves arise contango, backwardation and convenience yield Commodities are real and physical. Discussion of the constraints of the physical markets and consequences for the paper markets. - Examine the components of the physical markets - The importance of defined physical formats; how to address deviations - A word on freight, delivery conventions and storage - Consignments an inventory management tool - Comparison of physical and paper contracts - How paper contracts can be used to manage a physical price risk - Exploring strategies for consumers - Real options in commodities What paper instruments are available for managing commodity price risk? - Spot and forwards - Features of commodity futures; the main futures exchanges - Listed options - When to turn to OTC markets - Swaps, swaptions, spreads and baskets - Centrally cleared OTC products - Putting Asian commodity markets into context Factors to clarify prior to using commodity products - Difference between embedded and discretionary exposures - Measure of performance: P&L versus realised price - The trade-off between protection and commitments - Choosing appropriate instruments - Accounting implications - Working with structured products Gold and the other precious metals. Currency or industrial commodity? - Underpinnings of precious metals markets - Allocated and unallocated metal - The fixing process - Lease rates and metal borrowing costs - The use of forwards, gold loans and prepaid forwards - Managing lease rate risk then and now - Considerations for silver and PGMs Base metals - the building blocks of economic activity. Please refer to next page for Course Description

4 Course Description Base metals - the building blocks of economic activity. - The role of the London Metal Exchange (LME) - Contract dates on the LME - Carry trades - How warrants work - Linkage between OTC and physical markets - Hedging OTC trades via the LME - Exploring option strategies The vast world of energy. Dealing with disparity of underlying, regional variations, and managing differences. - Why the large product range? - Classifications of crude oil and distillates - Price benchmarks in the energy space - Exchange for physical - Working with cracks and diffs - OTC conventions - Why oil-indexed contracts arise and what do they look like - What is swing? Case Study: Living with a commodity hedge through the commodity cycle - Examination of commodity hedge strategy devised during the commodity bull run - Analysis of performance through the price pull-back post credit crunch - Lessons learned Investors Who are they, what are they doing and why do they need specific products? The commodity investment proposition Traditional vehicles and their investment short-comings Investor related product evolution Commodity indices price exposure combined with rollover risk Exchange traded commodities popular, but has it gone too far? Commodity linked notes determining the optimal issuance environment Assessing Commodity Risks Decomposing market risks Managing basis risk Different aspects of rollover risk Model risk commodity markets are not perfect Stress testing portfolios Challenges arising from physical inventory Please refer to next page for Course Description & Course Pre-requisites

5 Course Description So much for the theory; how do we make it happen? Life cycle of a commodity trade Documentation Common amendments Cash and physical settlement Audit considerations Marking to market Please refer to next page for Speaker s Biography Course Pre-requisites A good understanding of the time value of money, forward prices, futures, swaps and options. A calculator is useful for the workshop sessions. Please refer to next page for Speaker s Biography

6 Speaker s Biography Emma Jenkins, BA (Hons) Emma Jenkins has been managing director of her own commodity consulting and training company, EJJ International Limited, for over three years. Prior to setting up her own business, Emma worked in financial markets for almost 15 years covering commodity markets, derivative pricing and structuring, and loan origination. From early beginnings in the areas of mathematical pricing and quantitative analysis, she progressed through several sales roles with Goldman Sachs, Westpac Banking Corporation, Credit Suisse and Macquarie Bank. She combines knowledge of FX and interest rate markets, with her extensive experience across a broad spectrum of commodities. Her clients range from global multi-nationals, central banks and pension funds to small single asset mining companies. She is a regular presenter at conferences, has served on industry body committees and is writing a book on commodities due for publication later in the year. Please refer to next page for registration form

7 Commodities Workshop Registration Form Advanced reservation is required due to limited capacity For participation, please complete the fields below and fax back to CFA Singapore Please indicate membership ID to enjoy members' rate Alternatively, Reservation can be made via Refund and Cancellation Policy: *Refunds and cancelation received on the following: *4 weeks before the workshop date: 10% Cancellation Fee *2 weeks before the workshop date: 50% Cancellation Fee *1 week before the workshop date: No Refund *Members/Guests without registration will NOT be admitted *Admission/Seats are subject to availability Name:Mr./Mrs./Ms./Dr./ CFA Singapore/ Affiliated Professional Body Membership No.: Tel: Fax: Company: Designation: Address: Postal Code: Food Preferences: None Halal Vegetarian Others (please specify): Payment Details Please mark a tick in the relevant box: Membership type Standard Fees Remarks CFAS Members $2,700 Affiliated Professional Bodies Members Non Members $3,600 $3,200 ICPAS, IMAS, SVCA, CPA Australia & SID (Bank, *Cheque No.): Amt Due: S$ *All cheques to be made payable to CFA Singapore' c/o 10 Shenton Way #13-02 MAS Building, Singapore Please charge to my credit card I, hereby authorize CFA Singapore to charge my credit card account for the amount $ SGD Credit Card (VISA/AMEX/MC): (Expiry: /20 ) Signature/ Date CFA Singapore (a member society of CFA Institute) 10 Shenton Way, MAS Building, #13-02, Singapore Phone: Fax: programs@cfasingapore.org