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If A Tree Falls In The Forest, Can You Make A Little Money?
By John Wasik CHICAGO | Mon Jun 3, 2013 4:42pm EDT (Reuters) – If a tree falls in the forest, can you make a little money? As the U.S. housing rebound continues, you can watch the value of your real estate rise. In addition you can reap gains from resource companies that own and process timber. Since most U.S. homes are still framed with wood, timber becomes a more valuable commodity as new construction booms. Home prices gained the most in seven years in March, according to a recent S&P Case-Shiller housing index report. Housing starts in April rose 16 percent over the previous month with new building permits up 14 percent, according to the U.S. Census Bureau. North American sawmills are running at the fastest pace in six years, up nearly 7 percent over last year, according to CIBC World Markets , a Canada-based investment bank. Growth in China is also contributing to the rebound. More than 60 percent of log exports from the Pacific Northwest head to the People’s Republic. Timber is also becoming more scarce as forests shrink. As a commodity, it provides an inflation hedge, too; the S&P Global Timber & Forestry index has produced an annualized return of nearly 7 percent over the past three years through April 30. The current Consumer Price Index is running at an average 1 percent. Why invest in timber and related resource companies instead of the obvious play in homebuilder stocks ? Those companies have been rallying for more than a year and are pricey. The SPDR S&P Homebuilders ETF, for example, a fund that holds most of the major home-construction companies, is up more than 50 percent over the past year through Friday, almost double the price of a consumer cyclical index. That portfolio’s price- earnings ratio – what investors are willing to pay for a dollar of expected earnings – is 20, compared to 14.4, for the SP 500. The underlying S&P index for the timber sector has climbed more than 31 percent over the past year through May 31 compared to a nearly 50-percent gain for the S&P Homebuilders Index. The iShares Global Timber and Forestry Index ETF (WOOD), has p/e of 18; that’s not a bargain price either, but timber stocks are a better value now relative to homebuilding stocks and may have more upside. REGIONAL VIEW Most timber companies specialize in specific regions where they own or lease properties. But to obtain global diversification, it’s best to consider one of two exchange-traded funds on the market that hold timber, packaging and real estate investment trusts (REITs) that own lumber resources. The Guggenheim Timber ETF, holds major producers like Weyerhaeuser Co and International Paper Co. It tracks the Beacon Global Timber Index, which holds companies that own or lease forested land or produce wood-based products. More than 40 percent of the companies are based in greater Europe or Asia. It’s up 8 percent year to date through May 31 and gained 25 percent last year. As an alternative, the iShares timber ETF mentioned above has more than 60 percent of its holdings in the Americas, including Plum Creek Timber Company Inc and Potlatch Corp . The iShares fund is a better deal on expenses than the Guggenheim product, charging 0.48 percent annually for management, compared to 0.70 percent for the Guggenheim fund. It’s gained 4 percent year to date and 23 percent last year. Of the two ETFs, the iShares fund offers more total international exposure, including 13 percent stakes in Brazilian companies and 11 percent in Japan , says Eric Dutram, ETF analyst at Zacks Investment Research in Chicago. Either way, the two funds are reasonably priced, he said. Many timber companies give you a bonus if they’re vertically integrated. They could mean they are producing value-added products like rayon, packaging or paper, which also would benefit from a broad economic recovery. These companies may also own or lease land that may result in other mineral plays such as petroleum or natural gas . Keep in mind that timber trends can cut the other way. As funds specializing in a handful of commodities that rise and fall directly with economic demand, these ETFs are not for nervous investors. Guggenenheim Timber lost nearly half its value in 2008 and has a 32-percent five-year standard deviation, a volatility gauge. That compares to 20 percent for a world natural resources stock index. If the housing market goes south again, then these ETFs will suffer. Consider them only as small parts of a larger portfolio and not large holdings. (The author is a Reuters columnist and the opinions expressed are his own. For more from John Wasik see link.reuters.com/syk97s ) (Follow us @ReutersMoney or here Editing by Linda Stern and Andrew Hay) Continue reading
G8 Under Pressure To Rethink Biofuel Mandates
Published 08 May 2013 EXCLUSIVE / Leaders of the EU and their partners in the G8 nations are under mounting pressure to reconsider their support for biofuel targets amid concern that plant oil production competes with food output in poor countries. Britain, which chairs the G8 this year, is holding a global meeting on nutrition and food on 8 June, a week before the regular G8 summit in Northern Ireland. Prime Minister David Cameron has pledged to make trade, tax enforcement and transparency priorities for the summit. These points are expected to be noted on Wednesday (8 May) in the Queen’s Speech, which outlines the government’s parliamentary agenda for the year. But concerns are already emerging about whether the G8 – which includes two major biofuel champions, the United States and the EU – should agree to reconsider fuel policies as part of their commitments to fight world hunger. Among those questioning the policies are a British parliamentary select committee and the Enough Food for Everyone, or IF campaign, which includes some 200 British and international groups lobbying to reduce world hunger. Barry Johnston, the UK political advisor for Christian Aid, which is part of the IF campaign, said he was hopeful the G8 would acknowledge biofuel production “as a significant issue” and agree to shed more light on large land transactions in developing countries that are increasingly the leading source of plant oils. “One of the structural issues that underlies the fact that one in eight people go to be bed hungry every night is that land is being bought up, whole strips of it, in ways that aren’t very transparent, deals that don’t show a benefit for local populations and in some cases, they are directly taking food out of the mouths of people and putting into cars in the EU,” he said in a telephone interview on Tuesday (7 May). “So there’s a moral imperative to act there. Consumption that happens in the West in richer countries has a direct impact on the ability of individuals to feed themselves in poorer countries, and that can’t continue at current rates.” IF campaigners are also urging G8 leaders to build on recent momentum in Europe and the United States to combat tax evasion, which the campaigners estimate costs developing nations some €122 billion per year – more than total development aid. Besides Britain, the G8 members are Canada, France, Germany, Italy, Japan, Russia and the United States. The EU is represented at the summits by the presidents of the EU Council and Commission, Herman Van Rompuy and José Manuel Barroso. Only Japan and Russia have not set biofuel targets for transport. Concerns about food security A British Parliament select committee is preparing to wrap up its enquiry into world hunger and food security ahead the summit. At recent hearings, Westminster lawmakers questioned the impact of EU-driven policies on biofuel, especially on developing nations. Malcolm Bruce, chairman of the House of Commons’ International Development Committee, grilled the undersecretary of state of transport, Norman Baker, about the EU policies. “What we have heard in the evidence so far is a pretty overwhelming view that the existing [biofuel] mandate should be scrapped,” Bruce said at hearing on 18 April. “The people who have given evidence to us say it is distorting, dysfunctional and it should be scrapped,” Bruce said, according to a Commons transcript. “That seems to be all the evidence. Everybody we have had has said it should be scrapped, so why is it not being scrapped, or at least radically changed?” Baker and other government representatives were asked whether Cameron would be addressing the potential impact of biofuel demand on food output, and foreign purchases of land in sub-Saharan Africa for agri-oil production. The undersecretary for international development, Lynne Featherstone, said the British government supported development of biofuel that did not compete with food crops or production. In testimony before the committee, she also said the government would seek greater transparency in land deals in developing nations. “Our aim is to secure agreement from major G8 investors to commit to publish data on land acquisitions, and make that accessible to local communities, whether it is biofuels, commercial investments or China buying some land with an eye to in future feeding the Chinese rather than the Africans, which is always the fear that has arisen,” Featherstone said. Defending biofuel mandates Farm groups and the biofuel industry have hit back at their critics, saying plant-based fuels give farmers new markets while helping to reduce carbon emissions. They also deny any direct links to food price volatility, noting that the two main transport fuels produced from plant oil – ethanol and biodiesel – did not exist during the wild food price fluctuations of the 1970s. The industry is pressured the EU not to back away from its longtime support for alternative fuels after the European Commission last year called for halving its target of 10% biofuel use in transport by 2020 in response to a spike in food costs and concern about the environmental impact of plant-oil cultivation in developing nations. One of Europe’s leading biofuel industry groups, ePure, points out that ethanol uses post-food residues for fuel production. The industry also says it is moving ahead with development of advanced biofuels that do not compete with food crops. European farm groups, including the influential Copa-Cogeca, have denounced moves to reverse the EU’s biofuel commitments, saying they hurt farmers and jeopardise investments in oil production. But acknowledging potential impacts on developing nations, Copa-Cogeca has urged the EU to “encourage the introduction of effective environmental legislation in third countries in order to prevent the phenomenon of land use change.” POSITIONS: The United Nations’ special rapporteur on food rights, Olivier De Schutter, wants the EU to scrap its binding targets for fuel, saying the policies drive up food prices and push production to developing nations because of insufficient land within the EU. “The impacts on these countries are overwhelmingly negative and are alleged to infringe on the realisation of the human right to adequate food,” the Belgian lawyer said in a statement on 23 April. He has also linked biofuel demand to food price spikes and urged the EU to rethink its Common Agricultural Policy, saying its subsidies and support for European growers undermine farmers in less-developed regions. Citing the estimated €122 billion believed to be lost every year through tax avoidance and tax evasion in developing nations, Barry Johnston, the UK political advisor for Christian Aid, a charity group, said: “That is more than the global flow of aid into the developing world. Just through tax dodging alone, we see poor countries are net contributors to the rich world. The G8 has taken action on this before, it’s looked at the issue and made recommendations but this year we want to see concrete outcomes. So we’re pushing for measures there that will benefit developing countries and what that does it releases significant amounts of resources for investment in agriculture and nutrition.” NEXT STEPS: 28 May: World Hunger Day 8 June: British government hosting meeting on growth and nutrition ahead of the G8 summit 17-18 June: G8 Summit at Fermanagh, Northern Ireland Continue reading
Carbon Forum Asia
Event Name : Carbon Forum Asia Event Date : 24 – 25 September 2013 Location : Bangkok, Thailand Website : www.carbonforumasia.com Email : carbonforumasia@koelnmesse.com.sg / sl.khoo@koelnmesse.com.sg Organizers : Koelnmesse and International Emissions Trading Association (IETA) Content: Recognized as Asia-Pacific and the Pacific Rim’s leading platform for the carbon, energy and financial markets, Carbon Forum Asia serves as the leading platform in Asia-Pacific to learn, discuss and stay updated on the most current issues and trends around carbon. Carbon Forum Asia also receives strong support from key regional and local government agencies and institutions. Carbon Forum Asia enjoys unique support from the Thailand Greenhouse Gas Management Organization (Public Organization), Energy Policy and Planning Office and Department of Alternative Energy Development and Efficiency Thailand. Further, the strong partnership with the Asian Development Bank helps facilitate and attract key opinion leaders and government decision makers from Asia to Carbon Forum Asia. For the first time this year, Carbon Forum Asia will be co-located with Clean Energy Expo Asia and Energy Efficiency Asia. This new collaboration will bring together the most comprehensive gathering of professionals from the carbon, clean energy and energy efficiency markets from over 50 countries. Offering the opportunity to network and gather under one roof, like-minded professionals will be able to address and discuss key issues and solutions towards securing Asia’s energy future, offering unprecedented cross-beneficial access. Carbon Forum Asia 2012 was attended by close to 700 attendees from 40 countries. It also hosted 81 exhibiting companies from 28 countries. The top exhibiting countries are Thailand, Australia, China, Singapore, Japan, Malaysia, Vietnam, and Switzerland. Carbon Forum Asia 2012 also featured 87 industry leaders and experts, materialising 22 interactive dialogues, bringing together carbon market players, policymakers and industry analysts. Show Details at a glance: Date: 24 – 25 September Venue: Centara Grand & Bangkok Convention Centre at CentralWorld, Thailand Admission: Conference Tickets includes access to the 2 day conference sessions, trade fair, side events and lunch. They are priced between THB 4500 – THB 4100 (Prices are subject to 7% VAT). Trade visitor tickets are complimentary and include access to the 2 day trade fair and side events. Registrations to Carbon Forum Asia include access to the Clean Energy Expo Asia Trade Fair. Delegates registering to both the Carbon Forum Asia and Clean Energy Expo Asia Conference will enjoy a 20% discount. Download the 2013 Delegate Registration Rates Here Major Exhibition Categories: Afforestation & Reforestation Agriculture Bioenergy Chemical Industries Cogeneration Construction Energy Demand Energy Distribution Energy Efficiency Fossil Fuels Fuel Cells Geothermal Hydropower Landfill & Methane Gas Capture Manufacturing Marine Energy Metal Production Mining & Mineral Production Nuclear Energy Retrofitting Solar Energy Transport Wind Energy Waste Management Waste to Energy For more information please contact: Koelnmesse Pte Ltd Miss Su Ling, Khoo Regional Manager Tel: +65 6500 6718 sl.khoo@koelnmesse.com.sg Miss Corrine, Zhang Senior Sales Executive Tel: +65 6500 6742 c.zhang@koelnmesse.com.sg Continue reading