October182011
* Scheduled refinery maintenance curbs supplyBy Jessica JaganathanSINGAPORE, Oct 17 (Reuters) - Rising domestic fuel
consumption will leave less heating oil and diesel for Japan to
export from November, industry sources said on Tuesday.The onset of winter and work to rebuild parts of the country
devastated by the March earthquake and tsunami are boosting
demand for fuels in the middle distillate group, which includes
diesel and heating oil.Tighter exports from Japan could drive up regional prices
for middle distillates and make it more expensive for European
buyers to import Asian products. Asia produces more middle
distillates than it needs and typically exports the surplus.Japanese retailers have begun stockpiling kerosene ahead of
peak winter demand. Latest data from the Petroleum Association
of Japan (PAJ) shows kerosene stocks at an almost three-year
peak. Sales of oil heating equipment have increased as consumers
buy portable heaters amid concern that unexpected power cuts
could cripple home heating systems.The continued backlash against nuclear power in the country
has cut generation from reactors, leaving thin power capacity
margins and an increased threat of power outages.”Domestic sales have been very good,” said a source with a
Japanese refiner, referring to kerosene, used widely in Japan as
a home heating fuel in both portable and installed heaters.”Sales have gone up about 130 percent from the same period
last year,” he added.Prices for near-term delivery of kerosene in Japan are lower
than those in December, providing an incentive for end-users to
store the product, he said.At least four refineries are under maintenance in the
country, curbing supplies at a time when domestic demand is
starting to increase, traders said.Idemitsu Kosan Co’s on Sunday started scheduled
work on its sole 160,000 barrels per day No.1 crude distillation
unit (CDU) at its Aichi refinery, in central Japan.JX Nippon Oil & Energy Co is undertaking planned
maintenance on its 150,000 barrels per day No.3 CDU at the
Mizushima-A refinery in western Japan. It is also working on its
120,000 bpd day No. 1 CDU at the Negishi refinery, near Tokyo.Cosmo Oil has started planned maintenance at its 85,000 bpd
No.6 CDU at the firm’s Yokkaichi refinery.”There are not that many spot cargoes available for both
diesel and jet because of the maintenance and good domestic
sales,” said another refinery source.RECOVERY IN DIESEL DEMANDJapan is also seeing a recovery in diesel demand to fuel
reconstruction efforts and for use as a blend stock in low
sulfur fuel oil for power generation. Japanese utilities are
burning more fuel oil at power plants as they look to compensate
for shut nuclear capacity.Japanese exports of diesel dropped by over 75 percent to
85,000 bpd for the week ended Oct. 8, official data showed.”Low sulfur fuel oil is supported right now as it’s used for
electricity and power generation in Japan, and gas oil is used
to be dumped into it to blend,” said a Japanese trader.Diesel demand is now seeing a recovery to pre-earthquake
levels, and is expected to intensify over the last quarter of
the year and early next year due to a pickup in reconstruction
work.”For a while, after the earthquake in Japan, it was a wait
and watch situation where Japan’s trade activity was expected to
go up significantly,” said FACTS Global Energy’s Praveen Kumar.”We were expecting gas oil activity to bounce back and I
think that’s what you are probably seeing now since we are well
into the fourth quarter.”While Cosmo Oil and JX Nippon Oil might enter the spot
market to import cargoes to fulfil domestic demand while it
completes the refinery maintenance, Japan will remain a net
exporter, traders said.
October172011
By Merieme Boutayeb. Research Analyst at Lipper. The views expressed are her own.
The European fund industry is getting a second chance this week to improve the way it communicates with investors when selling its products. While the first effort became mired in legalese and complexity, the Key Investor Information Document, or KIID, should offer a golden opportunity to recoup some more of the trust lost during and after the financial crisis. Firms would do well to look past their misgivings and not waste it.
The new requirements are part of the broader changes that come as part of UCITS IV regulations designed to further develop a single market in investment products. The KIID will replace the much-criticised Simplified Prospectus as the means to facilitate the understanding of neophyte investors.
Published by ESMA (the European Securities and Markets Authority, the final KIID layout will be divided into five principal sections: objectives and investment policy; risk and reward profile; charges; past performance; practical information.
A KIID will have to be prepared for each share class in a standardized two-page format. It is probable that the task will be arduous for those funds using deeply complex investment strategies which they are required to distil into simple terminology. But they will have to respect the rule (and might be afforded a bit of extra room) as regulators seek to ensure transparency and comparability between different funds.
The KIID will also have to be available in all the languages of the countries where the share class is registered for sale, a requirement which goes beyond the demands of the Simplified Prospectus and which will result in additional costs. Â Â Â According to Lipper data, there are about 50,000 UCITS share classes registered for sale in Europe. Taking into account the fact that every share class must have a KIID in each language of country of registration for sale, the number of documents to be produced would be more than 160,000 KIIDs by July 1, 2012. Share classes already in existence before July 1, 2011 have a deadline of one year to develop their KIID.
Professionals from the sector estimate that the cost of a KIID would vary between 50 and 125 euros, assuming the release of a single version in the year. That means the overall production of KIIDs would cost between 8 million and 20 million euros, without taking into consideration changes that may involve the production of an updated KIID.
In March, during a conference held by the Association of the Luxembourg Fund Industry, Schrodersâ <SDR.L> managing director in Luxembourg, Noel Fessey, estimated that the KIID would cost twice as much as the simplified prospectus. According to industry publication FundWeb, he said that Schroders is planning to spend 1 million euros to produce a KIID for all its UCITS share classes, compared with 0.5 million euros spent on creating the simplified prospectus in 2005.
RISK AND REWARD
No fund manager likes to shell out cash, but the sums involved donât appear that onerous in comparison to the costs spent annually by fund management companies to run their investment funds. However there are other factors around the KIID which will have an impact on the fund industry in Europe.
The new section on a fundâs ârisk and reward profileâ provided in the KIID has been the most controversial requirement. This will strive to give an estimate of the risk incurred by an investor via the calculation of a standardised indicator, the SRRI (Synthetic Risk and Reward Profile). This indicator could well turn out to be decisive in individualsâ investment choice by allowing an easier comparison based on their risk appetite.
Itâs difficult to guess at the changes in purchasing behaviour that this might create, but fund management companies may well be led to develop their fund range through an appropriate breakdown of the different risk levels, in order to satisfy a wide range of investor profiles. The SRRI is also likely to make it easier to monitor the offerings of rival fund firms.
The introduction of the KIID may also contribute to the trend towards consolidation and streamlining of fund ranges, which would serve to reduce the costs associated the production of KIIDs. They are likely to act as a further disincentive to the creation of multiple mutual funds because of the cost of producing several KIIDs, while fund companies will have an additional incentive to use mergers and transfers of assets where they manage several funds with similar risk profiles and strategies.
At this weekâs Fund Forum International in Monaco the organisers reported that one panel of experts believed fund management had overtaken banking as the most hated industry. A touch of paranoia there perhaps, but it is clear that despite much gnashing of teeth there remains a trust gap between fund companies and their clients. The KIID will clearly have a palpable impact for many groups in relation to cost, and uncertainties persist over how they manage complexity and what the eventual consequences might be. However, if done right, the KIID at least has the potential to help bridge that divide and firms should make sure it does just that.
October142011
The pension fund said it aims to “rejuvenate” the News Corp
board with new independent directors.Calpers owns approximately 1.45 million News Corp shares.Also on Friday, Hermes Equity Ownership Services, the
shareholder advisory service affiliated with Britain’s largest
pension fund, urged investors to vote against the reelection of
all Murdoch family members, Siskind and Knight.The annual general meeting of the media group, under fire
for a phone hacking scandal, is scheduled for on Oct. 21.
3AM
By Jungyoun ParkSEOUL, Oct 14 (Reuters) - Seoul shares reversed earlier
falls to end up on Friday, extending their gaining streak to a
seventh straight session, buoyed by firm gains in
telecommunications issues like SK Telecom .Foreign investors were buyers of a net 37.4 billion won
($32.4 million) worth of stocks, and pension funds purchased a
net 186.4 billion won, picking up stocks for a seventh straight
session.The Korea Composite Stock Price Index (KOSPI)
finished up 0.67 percent at 1,835.40 points.”The market is on a recovery trend right now though the
upside momentum has weakened after a recent streak of gains,”
said Chung Seung-jae, a market analyst at Mirae Asset
Securities.Defensive issues which lagged in the recent rally drew
investor interest again.Shares in SK Telecom, South Korea’s top mobile phone
operator, climbed 2.9 percent and KT&G , a tobacco
and ginseng producer, surged 3 percent.But companies sensitive to exchange rates, such as refiners
and transporters, declined on weakness in the won .A weaker won renders the cost of importing crude oil more
costly and also dampens demand for overseas tourism.GS Holdings , the holding company of South
Korea’s No.2 refiner GS Caltex, lost 1.7 percent.Korean Air Line fell 0.8 percent and Asiana
Airlines dipped 0.8 percent.Samsung Fire Insurance rose 3.5 percent and
Hyundai Marine & Fire advanced 4.8 percent.Brokerages rose as the market’s continued gains lifted
appetite towards the sector.Shares in Samsung Securities climbed 1.2 percent
and Mirae Asset Securities rose 2 percent.The KOSPI 200 spot index gained 0.66 percent to
239.67 points and the junior Kosdaq market rose 0.07
percent to 473.89 points.Move on day +0.67 percent12-month high 2,231.47 27 April 201112-month low 1,644.11 26 September 2011Change on yr -10.5 percentAll-time high 2,231.47 27 April 2011All-time low 93.10 6 January 1981
($1 = 1155.900 Korean Won)
