Temasek bullish on resources

After I just mentioned it in my earlier post, there was an article in the Business Times on how Temasek may be shifting their portfolio weightage towards resources. In relation to what I mentioned about Chesapeake, here is an extract:

‘Temasek’s move to resources is consistent with its goal of catering to Asia’s emerging middle class,’ said Melvyn Teo, director of the BNP Paribas Hedge Fund Centre at Singapore Management University.

‘Demand for resources will go up because of emerging economies like China but there is only so much supply, so prices will go up over time.’

The fund’s recent investments include convertible preferred stock in US natural gas firm Chesapeake Energy and India’s GMR Energy, and shares in Canadian platinum producer Platmin.

Some potential Energy plays (pun intended)

The energy sector is in the doldrums recently. Natural gas prices are at a multi-year low while BP has generally led the listed oil majors down a slippery slope. Nevertheless, some analysts feel that the energy sector is oversold and there are bargains for the picking.

Exxon Mobil (XOM) and Natural Gas (GAZ) are at trading bands last seen nearly 5 years ago. Also, United States Oil (USO) is trading at near historical lows.

Of the counters named above, you will probably need to pay more attention if you’re thinking of buying GAZ or USO. GAZ comes up as a “restricted trade” if you try to use POEMS to make a purchase (I’m not sure if the same problem crops up with other brokers), so a proxy you can use for GAZ will be the Chesapeake Energy Corporation (CHK) — incidentally a recent addition to the Temasek portfolio. As for USO, the ETF managers do not physically purchase and store crude oil, so they purchase Crude Oil Futures instead. While this works well in theory, USO has been pummelled recently by contango and the correlation between USO prices and crude oil prices have been drifting apart for some time. Just something for you to note.

An Europe ETF to consider

There’s a good article on Euro ETFs in the Business Times today.

If you personally think that Europe will pull out of its current financial problems but you don’t like the fact that it might be a long term play where your funds might be locked for a period of time, you can consider purchasing Euro ETFs from the NYSE instead of SGX.

When I last checked about 2 months back, the Euro ETFs on offer at SGX capitalised income instead of distributing them. If you prefer an ETF that does provides dividends, you can take a look at the SPDR DJ EURO STOXX 50 (FEZ). Unless you want to do dollar-cost averaging, please note that I’m not telling you to buy NOW, but you should keep this in your watchlist to go long when the time is right!

Close shave with a snake

There I was, deep in the jungles of Brunei on Jungle Survival Training with a bunch of other trainees. Our objective for the day was to navigate our way back to base camp from the middle of nowhere, sharing between the 7 of us one set of combat rations that was meant to feed only 1 person.

As our weary legs trudged through the various slopes and terrain that the Brunei jungle could throw at us, the guys behind me came to a sudden halt. When I looked back, I could see that a few of them were terrified and their gaze was affixed on a tree branch.

Coiled around the branch that I had just walked past was a big green snake. Not sure if it was venomous, but if one of us had just got bitten, there would have been no way to do an emergency evacuation since we did not have a way to accurately describe where we were.