Big Player Buys into Commodities
More from AMP:
- AMP Capital Investors, which manages close to $100 billion, is plowing cash into commodities on expectation demand will strengthen with a China-led recovery in the global economy.
- The company yesterday switched from an “underweight” allocation in commodities future contracts to “overweight,” said Nader Naeimi, an AMP investment strategist in Sydney. Oil and metals were AMP’s top priorities.
- AMP boosted its investment in a basket of commodities and assigned an “overweight” allocation to primary metals and energy and “underweight” to precious metals and soft commodities, such as wheat and soybeans.
- “Rather than making money out of financial engineering, people are going to be making money out of making things,” said Naeimi. “So there’ll be a lot more upside pressure on commodity demand, while there is still limited supply.”
- Mining companies have delayed about $200 billion of projects, according to an estimate by iron-ore producer Cia. Vale do Rio Doce, as the recession has sapped demand for raw materials. Global oil supplies will be “severely constrained” by lower prices and investment, the International Energy Agency said in a report last month.