Retail investors, high net worth individuals and wealth managers coupled with Chinese investors have caused a surge in commodities trading over the past couple of months.

This development is sending shock waves through global commodity markets as investors pile into futures, says George Lucas, managing director Instreet Investment.

“Adding fuel to the fire was the decision by Chinese regulators to clampdown on equity markets. In response, Chinese investors have diverted their money into commodity futures – not property assets as many may have expected.

“All this has significant consequences for Australia as our currency, economy and stock market are influenced by the price of iron ore. And having the price of iron linked to Chinese retail investors is not ideal (to say the least).

“This madness has surprised western investors and rattled global commodity markets, causing a sharp run-up in the price of steel and iron ore futures.

“Indeed, at the peak day of last month’s commodities fever, the number of steel reinforcement bar contracts traded in Shanghai exceeded volumes produced by China annually.

“In an attempt to cool the market and reduce the high volumes, the Chinese regulator increased transactions fees and margin requirements on Chinese commodity futures. This led to the large fall in iron ore prices we experienced last week,” said Mr Lucas.

About Instreet

Instreet is an independent investment house that works closely with the financial adviser community to conceive and distribute retail investment products. After identifying adviser needs and market trends, Instreet builds customised investments sourcing quality wholesale providers. By doing so, Instreet makes institutional assets available to individual investors. The end result is a range of investment solutions designed to better achieve the goals of clients and advisers.

For more information: www.instreet.com.au

Or contact:

George Lucas at Instreet:

M: 0418 202 228

E:  glucas@instreet.com.au

Simrita Virk at Shed Media:

M: 043 4531 172

E: svirk@shedmedia.com.au

May 10, 2016

Surge in commodities cause for concern says Instreet

Retail investors, high net worth individuals and wealth managers coupled with Chinese investors have caused a surge in commodities trading over the past couple of months. […]
May 10, 2016

Emerald Wrap announces partnership with Impact 20/80 to promote socially responsible impact investments

Instreet Investment announced today it has entered a strategic partnership with Impact 20/80 to develop and promote the Emerald Club and its flagship product, The Emerald […]
May 4, 2016

Budget deals ‘body blow’ for SMSF trustees aiming to be self-sufficient

3 May 2016 The Federal Government’s decision to take an axe to superannuation concessions will severely dent the aspirations of Middle Australia who view their retirement […]
May 2, 2016

Charter Hall’s Direct Office Fund extends BCL lease at 200 Queen Street

3 May 2016 Charter Hall and Barristers Chambers Limited (BCL) have today announced an extension to BCL’s lease at 200 Queen Street in Melbourne’s legal precinct […]
May 2, 2016

New research shows tax an important source of alpha – so can it be the new recruit to the alpha team?

02 May 2016 Seeking ‘Tax Alpha’ is a viable strategy for superannuation funds, especially when traditional investment sources of alpha are difficult to generate, says new […]