TIDMDTL
RNS Number : 7738C
Dexion Trading Limited
19 April 2013
Dexion Trading Limited (the "Company")
March Net Asset Value
The net asset value of the Company's Shares as of 28 March 2013
is as follows:-
GBP Shares
NAV MTD Performance YTD Performance
-------------- ---------------- ----------------
138.15 pence +0.52% +2.26%
-------------- ---------------- ----------------
In calculating the Company's Net Asset Value the Company's
Administrator will rely solely upon the valuation of GBP
denominated Permal Macro Holdings Limited ("PMH") Class A shares
provided by PMH. The Investment Adviser and third party service
providers to PMH, rely on estimates of the value of Underlying
Funds in which PMH invests, which are provided, directly or
indirectly, by the managers or administrators of those Underlying
Funds and such valuations may not be considered 'independent' or
may be subject to potential conflicts of interest. Such estimates
may be produced as at valuation dates which do not coincide with
valuation dates for PMH and may be unaudited or may be subject to
little verification or other due diligence and may not comply with
generally accepted accounting practices or other valuation
principles. The Investment Adviser may not have sufficient
information to confirm or review the completeness or accuracy of
information provided by those managers or administrators. In
addition, these entities may not provide estimates of the value of
Underlying Funds in which PMH invests on a regular or timely basis
or at all with the result that the values of such investments may
be estimated by the Investment Adviser. Both weekly estimates and
bi-monthly valuations may be based on valuations provided as of a
significantly earlier date and hence the published valuation may
differ materially from the actual value of PMH's portfolio. Other
risk factors which may be relevant to this valuation are set out in
the Company's prospectus dated 12th March 2008.
Monthly Portfolio Review
Investment Adviser Portfolio Outlook
Positive sentiment dominated markets in March, despite US budget
cuts taking effect and renewed troubles in Europe, resulting in a
resumption of the "risk-on" trade. In the US, positive economic
data, including a drop in the unemployment rate to 7.7%, an upward
revision in fourth quarter GDP and a rise in home prices,
outweighed concerns over the impact of sequestration budget cuts.
Europe, on the other hand, suffered from less optimistic news, as
the latest concerns in the ongoing credit crisis resurfaced when
the Cypriot banking system became at risk of collapse, while Italy
remained at a political stalemate and social unrest continued in
Spain. In Japan, new Bank of Japan governor Kuroda reiterated his
strong desire to halt deflation and target 2% inflation within two
years.
Market Overview
Manager outlook remains very positive with regards to the rich
macro opportunity set unfolding globally. In the US, the economy
continues to demonstrate resilience, especially in the housing
sector, helping to support the US dollar as well as equities. This
economic buoyancy has sparked debate within the Federal Reserve
about the benefit of additional asset purchases. However, the
recent disappointing payroll numbers have dampened market optimism
somewhat. Europe remains in a fragile economic state and continued
accommodative policy appears to remain an essential remedy for the
region. The occasional revival of socio-economic uncertainty - as
recently evidenced in Cyprus and Italy - only aggravates the
existing malaise and concerns. UK economic growth remains
lacklustre and there are concerns that the UK could fall into
another recession. Managers expect that the Bank of England will
implement increasingly dovish policies in order to address weak
growth, resulting in continued bearish implications for sterling.
In Japan, managers believe that the fight against deflation is a
priority, necessitating additional monetary easing in addition to
fiscal expansion.
China is struggling with its own set of macro complications,
including concerns over the lack of clarity on monetary policy and
high property prices. Other emerging markets present a mixed
outlook, with certain countries such as Brazil dealing with
constraints, namely high inflation, and others such as India aiming
to tackle their current account deficit. The strongest performer
within emerging markets is Mexico, which is benefiting from
favourable political reforms and its links to a relatively strong
US economy.
Global equity markets rallied in March, with the MSCI World
(local currency) returning 2.7%, led once again by Japan, while
Chinese equities continued to decline. In the US, encouraging
economic data boosted stock prices, bolstered by the FOMC's
announcement in the latter half of the month which reaffirmed the
Federal Reserve's commitment to maintaining accommodative policy.
European equities likewise rallied in the early part of the month,
but quickly reversed in the second half when the financial
stability of Cyprus was called into question and concerns
circulated that capital controls in the country could set a
precedent for the rest of the eurozone. Chinese equities also
suffered amid a decrease in risk-taking in response to the Cyprus
news, as well as China's renewed tightening measures in property
markets. Managers maintain long positions in US and Japanese
equities, with a higher exposure to the latter as some believe that
the rally in US stocks may be somewhat stretched from a valuation
standpoint.
Global government bond prices climbed in March. At the start of
the month, prices declined as better-than-expected economic data,
particularly in the US, spurred optimism over the prospects for
global growth. However, as the situation in Cyprus threatened to
trigger a run on banks across the region, safe haven buying of
government bonds in the major developed markets resumed. Despite
fears of contagion, bond yields on peripheral European debt
remained relatively stable. In terms of manager positioning, in the
US, the bias continues to be short rates in the 10 year sector. In
Europe, managers are generally maintaining long positioning in
European rates and German bonds due to the eurozone's fragile
growth outlook, prolonged deleveraging, fiscal austerity and
substantial central bank liquidity. Emerging market-focused
managers have short exposure in markets where they believe the bond
rally has overshot.
The euro continued to weaken against the US dollar in March as
eurozone finance ministers warned that private investors may have
to bear greater risks in future bank bailouts in the region. In a
reversal of the recent trend, sterling strengthened against the US
dollar during the month, on the back of comments from the Bank of
England's MPC that the pound had been sufficiently devalued, as
well as some upbeat economic data, including an increase in retail
sales. The yen weakened further against the US dollar, despite safe
haven flows to the yen towards the month-end. Commodity currencies,
including the Australian and Canadian dollars, were driven higher
on the back of better-than-expected economic data. Within the
emerging market space, the most notable currency movement during
the month was that of the South Korean won, which fell more than
2.5% versus the US dollar amid the increased risk of conflict with
North Korea and worsening economic data. Amongst most managers,
especially the developed market-focused managers, long positioning
continues to be dominated by being long the US dollar on the back
of relatively positive economic data in the US. Managers maintain
shorts in the Japanese yen, although for some in reduced size given
the currency's significant depreciation over the past few months.
They generally hold a short bias towards the euro in light of the
precarious economic situation in the region, periodically
aggravated by the political and economic uncertainty. Emerging
market-focused managers continue to be long currencies with strong
supporting fundamentals, such as the Mexican peso.
Commodity performances were mixed during the month. In the
energy space, WTI crude oil rose as stronger US economic data
pushed prices higher, including a revision upwards to the Q4 GDP
figure, rising equity markets and Cyprus's agreement with creditors
on a bailout package. Natural gas also performed well, with prices
climbing to an 18-month high as cold weather in key consuming
regions across the US persisted. In metals, gold prices moved
higher for the first time in five months on the back of the turmoil
in Cyprus and subsequent impact on economic recovery across the
eurozone. Base metals prices were broadly lower in March, falling
as a result of weaker Chinese demand and rising inventories. In the
equities space, energy-related equities, including exploration and
production, oil services and integrated oil stocks, rose in March.
Gold-related equities, particularly small-cap gold miners, also
increased as the sector moved higher after an acute sell-off over
the last five months. Managers' commodities exposure remains very
light with some long exposures to gold as a hedge against
inflation. In addition, some managers believe that investors may
increase their holdings in gold as their confidence erodes in
certain banks, particularly after the Cyprus episode.
Strategy Overview
Discretionary: +0.82%. The developed market-focused managers
generated profits in March from their long positioning in equities,
particularly in Japan (the Nikkei and Topix). On the currency side,
longstanding short positions in the Japanese yen continued to be a
profitable trade, as were shorts in the euro. Long positions in the
Mexican peso also proved accretive. The fixed income sector
detracted somewhat, with losses stemming from shorts in UK gilts
and US treasuries. Emerging market-focused managers experienced
muted and, in some cases, negative returns on the month, losing
from long exposure to emerging market currencies and equities.
Systematic: +1.08%. The overwhelming majority of gains were
driven by long positions in the equity sector, particularly in the
US and Japan, among the portfolio's trend following managers. Fixed
income positions were also profitable, as the longer-term trend of
rising bond prices resumed, benefiting those with long exposure to
government bonds. The allocation to non-trend following managers
detracted from some of the gains during the month, with losses
continuing to result from long positions in the Japanese yen.
Additionally, short Australian and Canadian dollar positions
generated losses.
Natural resources: -1.73%. Losses during the month were mostly
centred on company specific names in the agricultural and energy
sectors.
Relative value arbitrage: +0.34%. Managers produced gains from
liquidity arbitrage and statistical arbitrage strategies, while
fundamental long/short stock-picking was less successful.
Strategy Allocation Number of Performance by
as of 28 March managers as strategy %
% of
28 March
-------------------------- ---------------- ------------- -----------------
March YTD
-------------------------- ---------------- ------------- -------- -------
Discretionary(1) 61 21 +0.82 +3.95
-------------------------- ---------------- ------------- -------- -------
Natural resources 6 8 -1.73 -0.99
-------------------------- ---------------- ------------- -------- -------
Relative value arbitrage 7 3 +0.34 +5.47
-------------------------- ---------------- ------------- -------- -------
Systematic(1) 21 9 +1.08 +1.00
-------------------------- ---------------- ------------- -------- -------
Cash 5 - - -
-------------------------- ---------------- ------------- -------- -------
Total 100 40(1)
-------------------------- ---------------- ------------- -------- -------
(1) Discretionary and systematic have one manager in common.
Strategy returns are in US$, net of underlying manager fees
only, and not inclusive of either Dexion Trading's or PMH's fees
and expenses.
Supplementary Information
Click on, or paste the following link into your web browser, to
view a full review of the Dexion Trading Limited portfolio.
http://www.rns-pdf.londonstockexchange.com/rns/7738C_-2013-4-19.pdf
This information is provided by RNS
The company news service from the London Stock Exchange
END
NAVEAPLNFLXDEEF
Dexion Trading (LSE:DTL)
Historical Stock Chart
From Jun 2024 to Jul 2024
Dexion Trading (LSE:DTL)
Historical Stock Chart
From Jul 2023 to Jul 2024
