TIDMDTL
RNS Number : 6545E
Dexion Trading Limited
14 May 2013
Dexion Trading Limited (the "Company")
April Net Asset Value
The net asset value of the Company's Shares as of 30 April 2013
is as follows:-
GBP Shares
NAV MTD Performance YTD Performance
-------------- ---------------- ----------------
139.73 pence +1.14% +3.43%
-------------- ---------------- ----------------
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
Due to abundant liquidity, financial markets extended their
rally heading into April despite signs of a slowdown in global
growth. In the US, economic data pointed to signs of weakness,
although corporate data remained strong. In Europe, the ECB adopted
a more dovish stance, while the ongoing political stalemate in
Italy was finally resolved. In China, economic data caused concern
with disappointing readings for factory orders and GDP growth.
Market Overview
Managers maintain their constructive views on global markets,
although there are concerns that recent market buoyancy is masking
some disconcerting trends. Examples are the underperformance of
emerging market equities against their developed market
counterparts, the weakness in commodity prices, and the lack of
growth in the eurozone. In addition, worries about a second quarter
soft patch, especially in the US, may make for a more volatile
market environment. Nevertheless, with global liquidity still
abundant and investors aggressively seeking yield, the bias among
managers remains to be long risk assets. The dispersion of economic
performance amongst major global regions may also richen the macro
opportunity set for both developed and emerging market focused
managers.
The outlook for the US remains positive and is supported by
strong data from the labour and housing sectors. Japanese policy
developments have exceeded some of the most optimistic expectations
and the reflation theme in Japan remains intact. Europe continues
to be a source of concern, with economic weakness being experienced
not only in peripheral countries, but also within the core, namely
in France. News out of China has been disconcerting, marred by
slowing growth and unclear monetary policy.
Global equity markets were mixed in April; developed market
stocks ended higher, with the S&P 500 hitting an all-time
closing high on the final day of the month, while emerging market
stocks generally declined. The US and European equity markets
started the month on shaky ground following the release of the
latest FOMC meeting minutes, which showed that fewer voting members
were in favour of further QE. Although prices recovered sharply on
the back of encouraging US housing data, they declined through
mid-month as China's economic growth and US high-frequency economic
data proved disappointing. Losses were recouped into month-end on
favourable corporate earnings and positive employment data in the
US. Japanese equities continued to trend higher throughout the
month, returning nearly 12% on the back of the BoJ's announcement
that it would double the nation's money supply through the purchase
of government bonds. Emerging market equities suffered during the
month as Chinese data continued to disappoint. Managers are
maintaining their long positioning in US and Japanese equities.
Global government bond prices ended higher in April driven by
continued accommodative central bank policies and a tepid outlook
for global growth. European peripheral bond prices also increased
during the month, benefiting from expectations that Japanese
investors would seek higher yielding foreign assets. The major
exception to this picture was Japanese government bonds, which
experienced sharp sell offs and volatility following the aggressive
measures by the BoJ. In Europe, managers are generally maintaining
long positioning along the euro curve due to the eurozone's anaemic
growth prospects. Emerging market focused managers have long
exposure to global government bonds that stand to benefit from
investors' (for example, in Japan) thirst for yield. As such, they
are long Mexico, South Africa and Russia. Certain managers are also
long European peripheral bonds given the support of the ECB through
its OMT operations.
The foreign exchange sector was notably characterized by US
dollar weakness, a departure from the trend of recent months. The
euro ended the month higher as uncertainty eased following the
appointment of a new Prime Minister in Italy, while the Japanese
yen continued to decline as the BoJ took a bold step towards policy
easing in Kuroda's first meeting as governor. Emerging market
currencies benefited from excessive global liquidity and the
continued search for yield. However, those economies with a high
beta to commodities, such as the Australian dollar, suffered during
the month amid weak data from China and subsequent declines in
commodity prices. Among most managers, especially the developed
focused managers, long positioning continues to be dominated by the
US dollar. Managers maintain shorts in the Japanese yen, although
much more tactically than they did earlier this year as the
currency has depreciated so rapidly. They are generally short the
euro in light of continued economic malaise in the region. Emerging
market focused managers continue to be long currencies with strong
supporting fundamentals, such as the Mexican peso.
Commodities finished the month lower in April with the Dow
Jones-UBS Commodity Index falling 2.8% and the S&P North
American Natural Resources Sector Index declining 3.3%. Within the
energy complex, crude oil declined as US inventories reached an
82-year high, US and Chinese economic data was weaker than
expected, and IEA trimmed forecasts for global demand. Gasoline
prices also fell markedly after US inventories, imports and
refinery processing all climbed during the month. In metals, gold
prices fell precipitously, entering a bear market and falling over
9% in a single day (the largest one-day percentage decline since
February 1983). This was a result of ebbing physical demand, the
stronger US dollar trimming demand for the precious metal as an
alternative currency, and concerns over investors seeking higher
returns in other assets as the global economy recovers. Base metals
prices were broadly lower on signs of slowing industrial growth as
a result of weaker than estimated economic growth in China. Wheat
and soybean prices rose on signs of higher US export demand and as
lower temperatures across the US threatened crops. However, corn
prices moved lower on speculation that US farmers increased sales
of grain harvested in 2012. Commodities exposure remains very
light.
Strategy Overview
Discretionary: +2.02%. In a strong month for discretionary
macro, managers continued to capitalise on the Japan trade, that
is, long Japanese equities and short the Japanese yen. Profits were
also derived from long exposure to US equities. A number of
managers benefited from longs along the euro curve as well as
certain European peripheral bonds (for example, in Greece), while
the emerging market focused managers registered gains from long
government bonds in Mexico and South Africa. Gains were only
marginally offset from shorting the euro and sterling.
Systematic: +2.00%. Among the trend followers, gains resulted
from long positions in global rates and bonds, as well as short
positions in precious and industrial metals. Performance in the
currency sector was mixed, with some gains from short Japanese yen
positions offset by losses from short euro positions. Non-trend
managers benefited from the flattening of the German yield curve,
although those gains were offset by losses from long yen
positions.
Natural resources: -3.58%. Losses this month stemmed from long
positions in gold equities.
Relative value arbitrage: +0.63%. Managers produced gains from
fundamental stock picking as US equities hit an all-time high.
Strategy Allocation Number of Performance by
as of 30 April managers as strategy %
% of
30 April
-------------------------- ---------------- ------------- -----------------
April YTD
-------------------------- ---------------- ------------- -------- -------
Discretionary(1) 58 20 +2.02 +6.04
-------------------------- ---------------- ------------- -------- -------
Natural resources 5 8 -3.58 -4.53
-------------------------- ---------------- ------------- -------- -------
Relative value arbitrage 7 3 +0.63 +6.13
-------------------------- ---------------- ------------- -------- -------
Systematic(1) 20 9 +2.00 +3.01
-------------------------- ---------------- ------------- -------- -------
Cash 10 - - -
-------------------------- ---------------- ------------- -------- -------
Total 100 39(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/6545E_-2013-5-14.pdf
This information is provided by RNS
The company news service from the London Stock Exchange
END
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