Connect with us

Investment

Silver investment demand jumped 12% in 2019

Published

 on

Credit: Flickr Hive Mind

Despite the challenges presented by the covid-19 pandemic in forecasting silver market conditions over the rest of the year, extended physical demand could drive the metal’s price higher in 2020, the Silver Institute suggested in their annual World Silver Survey.

Last year, global silver demand edged 0.4% higher despite an ongoing global trade war affecting many industries, while silver mine supply declined for the fourth consecutive year, falling by 1.3%.

Money-managers’ net positions in Comex futures went from being short over much of 2018 to consistently positive in the second half of 2019

Favorable structural changes such as vehicle electrification and a rebound in the key field of photovoltaics fueled solid industrial demand, the Institute wrote.

Silver investment demand jumped 12% — the highest annual growth since 2015 — as retail and institutional investors focused their attention on the long-term investment appeal of the metal. Exchange-traded product (ETP) holdings stood at 728.9 Moz at year-end, up by 13%, achieving the largest annual rise since 2010.

Money-managers’ net positions in Comex futures went from being short over much of 2018 to consistently positive in the second half of 2019. Coins and medals saw a 13% increase in demand over 2018, rising to 97.9 Moz, while bar demand remained solid at 88.2 Moz, the report showed.

The Institute said these were key drivers for the 15% intra-year rise in silver price to a three-year high of $19.65 last September. The 2019 yearly average silver price was $16.21, about 3% higher than the 2018 average price.

Although many key areas of silver demand — including industrial fabrication and jewelry and silverware offtake — are anticipated to fall solely as a result of the global pandemic, the Institute still expects silver physical investment to extend its gains this year, with a projected 16% rise to a five-year high as investors rotate out of equities in search of safe haven vehicles.

Mine supply is also expected to continue its decline, given the temporary shutdown of mining operations in several significant silver mining countries in early 2020.

As a result, silver price will likely rise this year and test the $19/oz threshold again before year-end, said Metals Focus, the research firm behind the Silver Institute report.

The firm also expects silver to benefit from bargain hunting and outperform gold later this year on the back of its historically low relative value.

Source: – MINING.com

Source link

Continue Reading

Investment

Why it is wise to add bitcoin to an investment portfolio – The Economist

Published

 on


“DIVERSIFICATION IS BOTH observed and sensible; a rule of behaviour which does not imply the superiority of diversification must be rejected both as a hypothesis and as a maxim,” wrote Harry Markowitz, a prodigiously talented young economist, in the Journal of Finance in 1952. The paper, which helped him win the Nobel prize in 1990, laid the foundations for “modern portfolio theory”, a mathematical framework for choosing an optimal spread of assets.

The theory posits that a rational investor should maximise his or her returns relative to the risk (the volatility in returns) they are taking. It follows, naturally, that assets with high and dependable returns should feature heavily in a sensible portfolio. But Mr Markowitz’s genius was in showing that diversification can reduce volatility without sacrificing returns. Diversification is the financial version of the idiom “the whole is greater than the sum of its parts.”

An investor seeking high returns without volatility might not gravitate towards cryptocurrencies, like bitcoin, given that they often plunge and soar in value. (Indeed, while Buttonwood was penning this column, that is exactly what bitcoin did, falling 15% then bouncing back.) But the insight Mr Markowitz revealed was that it was not necessarily an asset’s own riskiness that is important to an investor, so much as the contribution it makes to the volatility of the overall portfolio—and that is primarily a question of the correlation between all of the assets within it. An investor holding two assets that are weakly correlated or uncorrelated can rest easier knowing that if one plunges in value the other might hold its ground.

Consider the mix of assets a sensible investor might hold: geographically diverse stock indexes; bonds; a listed real-estate fund; and perhaps a precious metal, like gold. The assets that yield the juiciest returns—stocks and real estate—also tend to move in the same direction at the same time. The correlation between stocks and bonds is weak (around 0.2-0.3 over the past ten years), yielding the potential to diversify, but bonds have also tended to lag behind when it comes to returns. Investors can reduce volatility by adding bonds but they tend to lead to lower returns as well.

This is where bitcoin has an edge. The cryptocurrency might be highly volatile, but during its short life it also has had high average returns. Importantly, it also tends to move independently of other assets: since 2018 the correlation between bitcoin and stocks of all geographies has been between 0.2-0.3. Over longer time horizons it is even weaker. Its correlation with real estate and bonds is similarly weak. This makes it an excellent potential source of diversification.

This might explain its appeal to some big investors. Paul Tudor Jones, a hedge-fund manager, has said he aims to hold about 5% of his portfolio in bitcoin. This allocation looks sensible as part of a highly diversified portfolio. Across the four time periods during the past decade that Buttonwood randomly selected to test, an optimal portfolio contained a bitcoin allocation of 1-5%. This is not just because cryptocurrencies rocketed: even if one cherry-picks a particularly volatile couple of years for bitcoin, say January 2018 to December 2019 (when it fell steeply), a portfolio with a 1% allocation to bitcoin still displayed better risk-reward characteristics than one without it.

Of course, not all calculations about which assets to choose are straightforward. Many investors seek not only to do well with their investments, but also to do good: bitcoin is not environmentally friendly. Moreover, to select a portfolio, an investor needs to amass relevant information about how the securities might behave. Expected returns and future volatility are usually gauged by observing how an asset has performed in the past. But this method has some obvious flaws. Past performance does not always indicate future returns. And the history of cryptocurrencies is short.

Though Mr Markowitz laid out how investors should optimise asset choices, he wrote that “we have not considered the first stage: the formation of the relevant beliefs.” The return from investing in equities is a share of firms’ profits; from bonds the risk-free rate plus credit risk. It is not clear what drives bitcoin’s returns other than speculation. It would be reasonable to believe it might yield no returns in future. And many investors hold fierce philosophical beliefs about bitcoin—that it is either salvation or damnation. Neither side is likely to hold 1% of their assets in it.

This article appeared in the Finance & economics section of the print edition under the headline “Just add crypto”

Adblock test (Why?)



Source link

Continue Reading

Investment

An Atlantic Investment Bubble Will Help Companies Grow And Create Jobs – Huddle – Huddle Today

Published

 on


Blair Hyslop is the President of the Order of the Wallace McCain Institute. He is co-CEO, along with his wife, Rosalyn Hyslop, of Mrs. Dunster’s and Kredl’s Corner Market, New Brunswick-based companies that employ more than 200 people and have operations throughout Atlantic Canada.

As the Covid-19 pandemic raged around the world, the four Atlantic Canadian provinces came together in an unprecedented spirit of cooperation and collaboration to tackle the challenges it presented. The result was one the safest places in the world, with untold lives saved. That showed what we can do as a region when we work together.

Recently, a group of entrepreneurs from all four provinces came together to discuss ways to grow our economy and erase that gap that still exists with the rest of Canada.

It’s about controlling our own destiny and creating a region with more opportunities for our people.

The Atlantic Investment Bubble

The first item this group is proposing is the creation of an “Atlantic Investment Bubble” – a common equity tax credit to encourage investment across the region. Too often, businesses in Atlantic Canada struggle to find the investment needed to fuel growth compared to the rest of Canada. In fact, there is only $3 of Angel investment per capita in Atlantic Canada for every $28 invested nationally, according to the most recent figures.

That’s a huge gap, one that penalizes businesses in our region.

The challenge of finding investment affects all kinds of businesses – food producers like our company, Mrs. Dunster’s, as well as technology companies, manufacturers, tourism operators and more. We all face the same challenge – finding the capital needed to help our business grow.

Each province has its own equity tax credit aimed at encouraging local investment in local businesses. These work pretty well, as far as they go. They have different amounts of credit available and some outline support for only specific sectors. Yet the fundamental problem with this well-intentioned approach is that it ignores the regional nature of our business community.

As a region, we are simply just too small to operate only within our home provinces – we need to go to other provinces to find customers, vendors, employees, mentors and investors.

The provincial equity tax credits support investors who invest in a company in their home province. But if I wanted to encourage an investor in Nova Scotia, PEI or Newfoundland and Labrador to invest in Mrs. Dunster’s, they wouldn’t receive a tax credit. That becomes a disincentive to invest. A regional equity tax credit will address this problem and create a more robust investment environment within Atlantic Canada by promoting more interprovincial investment. That will help us close the gap with the national investment average.

How It Works

We propose a regional equity tax credit of 35 percent overlayed on the existing provincial programs and focused on sectors that will yield the most benefit to our region, including manufacturing, renewable energy, tourism, food and beverage, IT, aerospace, and cultural industries.

This approach will minimize the amount of legislative and regulatory changes required to implement the program. That’s important because speed matters here – one of the outcomes of the pandemic is there are billions of dollars on the sidelines looking for opportunities to be invested, including large amounts here in Atlantic Canada. By implementing a regional equity tax credit, we can repatriate our own money that too often gets invested in the public markets in Toronto or New York.

It means we can invest in our own potential.

We recognize, of course, that every dollar counts for provincial governments, and that they can’t spend scarce dollars on new programs without consequences. However, we believe that the Atlantic Investment Bubble will be self-sustaining, creating more new tax revenues than it costs.

We propose a four-year pilot program that is backstopped by the federal government, meaning it will have zero cost to the provincial governments. Based on our projections, this incentive would support nearly 50 companies in the first year. By year four after the first year of investment, this equity tax credit will have created over $50-million in labour income and added nearly $80-million to the region’s GDP.

Beyond the numbers, it will make our region more competitive and entrepreneurial. It will give Atlantic Canadian businesses the resources they need to grow, creating new jobs and new tax revenues.

Why You Should Care

Admittedly, a regional equity tax credit can seem like a niche idea. Why should you care about it?

I believe that Atlantic Canadians should be angry that our economy continues to lag behind the national average. It means our unemployment levels remain higher and our average incomes are lower.

It doesn’t have to be this way. We have the talent needed to grow our economy – we just need the fuel in the form of access to more capital.

The Atlantic Investment Bubble will make our business community stronger, creating access to more private sector investment that will help small- and medium-sized businesses grow and create more jobs for Atlantic Canadians, people just like you. It will make our region stronger, keeping your kids at home by providing them with meaningful opportunities.

The Government of Canada spends hundreds of billions each year providing services to Canadians. The modest expenditure to support the Atlantic Investment Bubble is a smart investment in the potential of Atlantic Canada. It is a short-term, not a long-term, expense that will deliver a strong Return On Investment by driving more private sector investment throughout Atlantic Canada.

The provincial governments in Atlantic Canada proved that they could work together in common cause during the height of the pandemic. They did a great job managing the crisis and have positioned the region strongly for the post-pandemic reality. We can build on that momentum with the Atlantic Investment Bubble.

There is already considerable support for the Atlantic Investment Bubble, including the Atlantic Canada Chamber of Commerce, Conseil économique du Nouveau-Brunswick, New Brunswick Business Council, the Order of the Wallace McCain Institute and TechImpact. They understand that this change will open investment in our region and help us achieve our true potential.

If you would like to learn more about this initiative, or to show your support, visit our website: www.atlanticinvestmentbubble.ca. If you are already sold on the benefits, speak to your MLA and MP and ask them to support this smart, cost-effective policy change.

Huddle publishes commentaries from groups and individuals on important business issues facing the Maritimes. These commentaries do not necessarily reflect the opinion of Huddle. To submit a commentary for consideration, contact editor Mark Leger: [email protected]

Adblock test (Why?)



Source link

Continue Reading

Investment

Sudbury med-tech firm lands $8M in investment funds – Northern Ontario Business

Published

 on


Rna Diagnostics has received investment capital that will enable it to complete a clinical trial on its cancer diagnostic tool, the RNA Disruption Assay.

The Sudbury-based med-tech startup announced on Sept. 9 that it’s received $8 million from a group of investors, led by iGan Partners, a Toronto-based venture capital firm, and the Crown corporation BDC Capital.

That money will enable Rna Diagnostics to complete its trial, called the breast cancer response evaluation for individualized therapy (BREVITY), which began in 2018.

“The continued support of iGan Partners and our current investors, combined with the support of BDC Capital as a new investment partner, is exciting,” said John Connolly, president and CEO of Rna Diagnostics, in a news release.

“The closing of this series A financing will allow us to complete the pivotal validation trial (BREVITY) of the RNA Disruption Assay™ (RDA)™. BREVITY is currently recruiting patients at over 40 breast cancer centres in Europe and North America.”

IGan led the way during an earlier round of funding, in 2018, worth $5 million. Rna Diagnostics has additionally received funding through the Northern Ontario Heritage Fund, FedNor, the Northern Cancer Foundation, and the angel investment firm Northern Ontario Angels.

The RNA Disruption Assay determines whether a patient’s tumour is responding to cancer therapy five weeks into treatment.

If the patient’s tumour isn’t responding, the oncologist can change course, cutting down on lost treatment time and considering other treatment methods that may be more effective.

Rna Diagnostics believes this approach could reduce harmful side effects for patients and improve their chances of survival. It could also reduce costs for cancer treatment centres.

“This is an enormous, expensive problem for cancer centres,” Connolly added. “Typically, in solid tumour cancers, only 30 to 40 per cent of patients receive a survival benefit from a given drug regimen.”

The RNA Disruption Assay was discovered by Dr. Amadeo Parissenti, a researcher and professor at Laurentian University, in 2007.

In moving the test towards commercialization, Parissenti later founded Rna Diagnostics, which operates out of Sudbury’s Health Sciences North Research Institute, the research arm of the local hospital, Health Sciences North.

Adblock test (Why?)



Source link

Continue Reading

Trending