Dexion Trading Ltd DTL October Net Asset Value

  Dexion Trading Ltd (DTL) - October Net Asset Value

RNS Number : 3189R
Dexion Trading Limited
16 November 2012

Dexion Trading Limited (the 'Company')

    October Net Asset Value

The net  asset value  of the  Company's Shares  as of  31 October  2012 is  as 

GBP Shares

    NAV      MTD Performance YTD Performance
132.51 pence     -1.22%          -1.02%

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

With the outcome  of the  US presidential election  now decided,  some of  the 
uncertainty has been lifted, although the Investment Adviser believes that the
shadow of the fiscal cliff now hangs over the markets. Risk levels amongst the
discretionary managers were fairly low in the run up to the elections but  now 
that some of the ambiguity has been resolved, clearer market trends will start
to re-emerge and  managers will  gradually and cautiously  increase risk  once 
more. While markets may initially trade  downwards at the outset of  President 
Obama's re-election, they are likely to eventually rally as participants  take 
into account the fact that a  continued low interest rate environment  remains 
supportive of risk assets. The economic environment in Europe continues to  be 
very fragile, with the periphery weighed  down by austerity measures and  core 
European countries showing weakness.

Market Overview

Renewed concerns over global growth weighed on markets during the month,  with 
the IMF cutting global growth forecasts. Economic data in the US was generally
positive, including better-than-expected employment, manufacturing and housing
reports. However, these  reports were overshadowed  by disappointing US  third 
quarter earnings  and uncertainty  ahead  of the  US elections.  The  European 
crisis continued to weigh on markets with  little progress made in the way  of 
reforms. Concerns  focused  on  the  ability of  Greece  to  secure  its  next 
installment of rescue funds, while Spain continued to insist that the  country 
would not  ask for  a  bailout. In  addition,  Europe's economic  data  proved 
disappointing with worse-than-expected PMI  and Ifo data.  On a more  positive 
note, economic reports in China generally met or exceeded market expectations,
but uncertainty  remained  over the  November  leadership transition  and  the 
longer-term direction of the Chinese economy.

Equity markets experienced  mixed results. The  developed markets ended  lower 
(as measured by  the MSCI World  Index), with US  equities falling around  2%, 
while European and  Japanese stocks rallied  slightly. Disappointing  earnings 
reports were the primary driver of  underperformance in US equities, while  in 
Europe stocks benefited from diminished stresses in the eurozone and  Japanese 
equities rose ahead of the Bank of Japan's decision to expand monetary easing.
Emerging  markets  declined  overall  during  the  month.  Managers  generally 
continue to favour long equity positioning in  the US and Europe based on  the 
extremely low level of rates  brought about by accommodative monetary  policy. 
Managers are also establishing some long exposure in the Nikkei, which  stands 
to benefit from further monetary easing and a weaker Japanese yen.

Developed market government  bond yields  rose modestly  in October,  although 
prices lacked any clear direction. In the US, yields rose early on,  following 
speculation that  positive economic  data would  lead the  Federal Reserve  to 
curtail its latest  round of monetary  easing. Later in  the month,  developed 
market yields in general increased as economic data out of China showed  signs 
of stabilising and  as positive  European developments  emerged, with  Germany 
increasingly softening its opposition to Spanish aid requirements and  Moody's 
retaining Spain's investment grade rating.  Peripheral yields ended the  month 
lower on the back of these  developments. In the developed world, exposure  is 
focused on long positions at the short end of the European yield curve,  given 
ongoing economic  concerns.  Managers  continue  to  find  profitable  trading 
opportunities  in  European  peripheral  bond  markets,  with  tactical   long 
exposures to bonds in  these regions. In the  US the bias is  to be short  the 
long end of the curve in anticipation of inflationary pressures increasing. In
the emerging world, managers continue  to be selectively long emerging  market 
sovereign bonds as these countries also need accommodative monetary policies.

Foreign exchange price movements were driven primarily by central bank action.
The Japanese yen was one of the more notable movers during the month,  falling 
2.3% against the  US dollar in  response to  the Bank of  Japan's decision  to 
expand its asset-purchase  programme for the  second time in  two months.  The 
Canadian dollar also fell sharply against the US dollar, declining by 1.6%  as 
the Bank  of Canada  delivered  conflicting messages  over its  next  monetary 
policy steps. The euro rallied marginally against the US dollar as  peripheral 
country debt continued  to stabilise. Emerging  market currencies saw  inflows 
into Asia, with the  Korean won, Chinese yuan  and Singapore dollar  rallying; 
while the South  African rand and  Indian rupee fell  sharply as South  Africa 
continued to be affected by  political instability, and India further  reduced 
its cash reserve ratio. Managers are  generally short the Japanese yen  versus 
the US dollar, with some increasing their  exposure to this trade as the  Bank 
of Japan  seems  increasingly likely  to  implement further  monetary  easing. 
Short-term managers  maintain a  bearish bias  towards the  US dollar  against 
various other currencies, but in the long term the bias for the currency is to
rise, especially against  the euro, based  on the US  economic strength.  Long 
positions are dominated by emerging market currencies that should benefit from
reflationary measures  to boost  certain assets,  as well  as the  search  for 
yield. These include  Asian currencies and  certain Latin American  currencies 
such as the Mexican peso.

Commodity prices declined in October.  The Dow Jones-UBS Commodity Index  fell 
3.9% and the S&P North American  Natural Resources Sector Index fell by  2.0%. 
Crude oil prices sold off for a second consecutive month as US output  climbed 
to the highest level in more than  15 years, US jobless claims increased  more 
than expected and commodity prices declined in conjunction with equity markets
as a number  of companies  missed quarterly  earnings expectations.  Likewise, 
gasoline prices fell as US refineries completed seasonal repairs.  Conversely, 
natural gas prices were  up for the second  consecutive month, advancing to  a 
ten-month high as colder weather set in across the US. Industrial metals  were 
negatively impacted after  the World  Bank cut  its forecast  for East  Asia's 
economy and  the IMF  cut  its forecasts  for  world economic  growth.  Weaker 
economic data out of  China also pushed industrial  metals prices lower.  Gold 
prices fell  as a  stronger US  dollar curbed  demand. Grain  prices  declined 
sharply as growing conditions in the  US and South America improved.  Exposure 
in the sector is dominated primarily by long exposure to gold and to a  lesser 
extent oil.

Strategy Overview

Discretionary: -0.45%. Performance  was relatively  balanced between  positive 
and negative contributors. On the negative side, losses were derived primarily
from a  continuation  of  the  same  themes  that  had  proved  profitable  in 
September, namely how  the extra liquidity,  from monetary easing  programmes, 
would be supportive of risk assets. As such, long positions in commodities, US
equities and emerging market credit were among the most costly trades. On  the 
positive side,  bullish positioning  proved lucrative  in Europe,  where  long 
positions in European peripheral bonds (e.g.  Spain) and, to a lesser  extent, 
European equities contributed  positively to  returns. Short  exposure to  the 
Japanese yen was also beneficial.

Systematic: -2.90%. Losses were widespread, with declines across most sectors.
During the month, managers generally had outsized positions as a result of the
low implied  volatility levels,  leading  to sharper  losses as  many  sectors 
suffered reversals. Among the trend  following managers, long positions in  US 
equities and commodities, particularly  gold and oil,  short positions in  the 
euro and  long  positions in  US  and  German bonds,  proved  equally  costly. 
Non-trend following managers suffered losses in currencies, with long Japanese
yen  and  Canadian   dollar  positions  proving   especially  detrimental   to 

Natural resources: -1.09%. Long positions in oil proved detrimental, despite a
notable lack  of fundamental  reasons  for the  decline  in oil  prices.  Long 
positions in gold and gold equities offset some of the previous month's  gains 
on the back of  a better-than-expected US  employment report, diminishing  its 
safe haven appeal.

Relative value  arbitrage:  +0.14%.  While  statistical  arbitrage  strategies 
suffered during the month, fundamental equity market neutral strategies offset
losses due to strong gains from short positions.

                          Allocation         Number of
                                           managers as    Performance by
    Strategy               as of 31                of          strategy
                                            31 October                 %
                                                         October        YTD
Discretionary¹                        54            22        -0.45      +2.84
Natural resources                      8            10        -1.09      +1.32
Relative value                         6             3        +0.14      +1.35
Systematic¹                           23            10        -2.90      -3.21
Cash                                   9             -            -          -
Total                                100           44¹                      

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.

                     This information is provided by RNS
           The company news service from the London Stock Exchange


MSCUNARRUVAAAAA -0- Nov/16/2012 10:18 GMT
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