Announcement Fall 2013

ANNOUNCEMENT: Mid-term Exam Details

posted 30 Oct 2013, 18:49 by Diep Ho

The mid-term exam covers Lectures 1-5 (up to and including options basic strategies).  60 multiple choice questions in 90 mins.  You will need a pencil, a rubber and a calculator. The exam will use computerised marking so on the answer sheet, for example, if my student ID is BAFNIU 16479 then I would fill in ID as below. You should color in the whole box.  Use a rubber if you need to make changes.

ANNOUNCEMENT: Added New HCMIU Finance Hangout/Forum

posted 26 Oct 2013, 07:42 by Diep Ho

Dear ALL

Many thanks for all those that have joined the forum.  I am hoping the forum will also server as another area where student can go to find help NOT only from me but the whole HCMIU finance Staffs/Student/TA/Alumni from past, present and future.  You can also access it on the menu "Finance Hangout/Forum" to the left.  Both English and Vietnamese can be used.

Much appreciated
TS. Ho Diep
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NEWS: Coffee Prices Soar All Of A Sudden, Vietnamese Stay Immovable

posted 14 Oct 2013, 00:21 by Diep Ho   [ updated 14 Oct 2013, 00:22 ]

Sun, Oct 13th, 2013

The robusta price has increased so sharply since the new 2013-2014 crop began. However, Vietnamese exporters cannot take full advantage of the opportunity to boost exports and make money.

Prices escalate suddenly

After losing nearly $150 dollar per ton in September, or the last month of the 2012-2013 crop, the robusta price in London unexpected rose sharply on the first days of October, the first days of the new 2013-2014 crop.

The price once soared by $50 per ton to the highest peak of $1,756 last Saturday, Hanoi time, before decreasing later of the day. As such, the price has increased by $98 over the last week to $1,611 per ton.

This has helped push the domestic coffee bean price to VND36,500 per kilo, which meant the VND1,500 per kilo just within seven days.

However, despite the price increases, there have not been many buyers and sellers. “The current coffee price is still lower than the sellers’ expectations,” said Tran Trung Duc, a merchant in Dakmil district of Dak Nong province.

A coffee exporter in Dong Nai province said that it’d be better to sell coffee in a small quantity as a measure to “test” the market. However, he said this proves to be impossible in the current conditions, when it’s very difficult to borrow bank loans for coffee trade. Meanwhile, coffee exporters still meet difficulties with the VAT refund procedures.

In Vietnam, the recent typhoon which caused heavy rains for many days has affected the coffee harvesting.

A farmer in Krong No district of Dak Lak province said if the rains continue, farmers would only have coffee to sell in November 2013 instead of October as initially expected.

Meanwhile, in the US, Europe and Japan, the main export markets for Vietnam, the winter has come. The coffee roasters in the markets now need materials to make products for the winter and the holidays to come at the end of the year and early the next year.

The net robusta inventories of Liffe NYSE has reportedly decreased sharply because Vietnam, the main exporter, though having entered the new 2013-2014 crop, has not got ready yet.

The US executive bodies have halted their operation, while the FED’s demand stimulus policies remain unpredictable. However, this, plus other factors, has prompted speculation funds to buy robusta and wait for their opportunities.

What will the prices be like?

The latest report showed that the net robusta inventories at Liffe NYSE have decreased to 60,380 tons, equal to 46 percent of that one year ago, the deepest low since 2000. Analysts said this is the sharpest decrease over the last few years, though some sources said the robusta output would increase in the new crop.

The net inventories are believed to decrease further, with the exports from Vietnam and Indonesia on the decrease, because the offer prices are higher than the trading prices on the trading floor.

The Japan Coffee Association’s report showed that the country’s inventories increased by 6,637 tons in August.

As for Vietnamese robusta, Japan only buys very clean and high quality coffee, accepting to pay high prices for the products (Vietnamese exporters sold at $500 per ton and more last crop).

However, since the Arabica output in Brazil and Columbia has increased sharply, Japanese roasters tend to buy Arabica. This would be a great challenge for Vietnamese high quality robusta producers.

Source Vietnamnet.

NEWS: Coffee Bears Double Bets on Lower Robusta Price on Vietnam Crop

posted 23 Sept 2013, 06:15 by Diep Ho

By Isis Almeida - Sep 23, 2013

Money managers more than doubled bearish bets on robusta coffee traded in London as Vietnam, the world’s leading producer of the variety used in instant drinks and espresso, is set for a record crop, NYSE Liffe data showed.

Investors held a net-short position, or a bet on falling prices, of 6,216 futures and options in the week ended Sept. 17, the Commitments of Traders report on the bourse’s website today showed. That compares with 2,619 contracts a week earlier and is the biggest bet on lower prices since July 9, according to exchange data compiled by Bloomberg. Robusta coffee futures fell 2.8 percent in the seven days to Sept. 17.

Vietnam’s robusta crop probably will rise 17 percent to a record 1.7 million metric tons in the 2013-14 season starting Oct. 1, the median of nine estimates from local traders and shippers compiled by Bloomberg last month showed. That implies a harvest of 28.3 million bags, each weighing 60 kilograms (132 pounds). Volcafe, a unit of commodities trader ED&F Man Holdings Ltd., on Aug. 30 predicted a 30 million-bag crop.

“Robusta remains weak with the proximity of the big Vietnamese harvest as well as rising production in Africa,” Rodrigo Costa, a trading director at Caturra Coffee Corp. a dealer in Elmsford, New York, wrote in a report e-mailed today for Sao Paulo-based Archer Consulting, where he is a contributor. Robusta, trading at $1,676 a ton, is technically targeting support at $1,600 a ton, he said.

Buyers of coffee from the new crop in Vietnam want to get a discount to futures prices, Volcafe said in a Sept. 20 report. There is “constant demand” for beans for shipment in November and December, the trader said. While the first red cherries in Vietnam have already been picked by farmers, the majority of the new crop “will only come from December,” Amsterdam-based trader Nedcoffee BV said in a Sept. 17 report.


In cocoa, money managers cut bullish bets from a record in the period, the data showed. Investors held a net-long position, or a bet on higher prices, of 60,460 futures and options from a high of 61,644 contracts a week earlier. NYSE Liffe started publishing trader holdings in 2011. The beans for December delivery rose 1 percent in the period.

In white, or refined, sugar, money managers more than doubled their net-long position. Investors were betting on higher prices by 9,422 futures and options as of Sept. 17, up from 4,566 contracts a week earlier, exchange data showed. The sweetener slid 2.2 percent in the period.

In feed wheat, money managers decreased their net-short position to 485 contracts from 580 lots a week earlier. The grain retreated 2.1 percent in the period.

Welcome to the Derivatives and Risk Management Course Resource Web-Page Fall 2013!!

posted 26 Aug 2013, 20:33 by Diep Ho   [ updated 26 Aug 2013, 20:33 ]

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