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Commodities

Commodities

RMB Global Markets is committed to supporting the resource industries by providing the focus, industry expertise, and international network to ensure that you receive products and services that are relevant, original and cost effective. We are active in all major commodity markets.

South Africa's wealth of natural resources makes it the world's foremost producer of gold and platinum-group metals (PGM), and a significant producer of many base metals. Significant coal reserves support an evolving electricity infrastructure and the country has pioneered several alternative fuel technologies.

Trading

Global Markets Commodities Trading covers the entire commodities complex offering structures with both physical underlying and paper, but specialises in precious metals and grains (local and foreign).

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Quanto futures

The Johannesburg Stock Exchange (JSE) and RMB, as the initial market maker, have brought quanto futures to the South African market.

A quanto future is a rand-denominated commodity investment product which delivers the same payoff as a pure dollar-denominated commodity investment while protecting investors from USD/ZAR exchange rate fluctuations.

South African investors don’t always derive the full benefit of commodity price movements due to a combination of the exchange rate and the country’s exchange control regulations, which govern the provision of investments in foreign assets and require commodity investments to be listed and settled in rand.

As an example of how the product works, if the price of brent crude increases by 20% in US dollar terms, the value of the investor’s rand product (via quanto futures) will also increase by 20%. The exchange rate movement plays no part in determining return.

Initially, Brent crude, gold and copper will be referenced as part of the JSE’s existing agreement with the CME Group.

Contact RMB Commodity Desk on +27 11 269 9140
View The Quanto Futures factsheet


Krugerrands

Gold has long been considered a safe-haven asset and a store of wealth and it’s generally thought that gold should be part of any well-diversified investment portfolio. To help you achieve this, RMB has partnered with FNB to provide an easy and safe way of investing in Krugerrands.

Through the FNB Share Builder or Share Investor accounts, you can quickly and conveniently invest in Krugerrands. Your coins are kept in the safe custody of Rand Refinery Ltd until you decide to sell them or take personal possession. We also offer a guaranteed buy-back of your coins if you choose to store them at Rand refinery Ltd.

Visit www.fnb.co.za/share-investing/krugerrands.html for more information on investing in Krugerrands


JSE commodity futures

SAFEX now lists WTI, Gold and Platinum futures, allowing individual and institutional investors access to the energy and precious metals complex. Finally, you can hedge your risks, add enhanced financial engineering to your commodity stock portfolios, combine various equity and commodity positions, and participate in the price appreciation of South Africa's flagship commodities.

Important for the investor, settlement in rands means that the currency risk is removed and that the contracts will perform according to local conditions e.g. the WTI crude contract is a good proxy for the South African Basic Fuel Price. Risk is further decreased by removing the physical settlement requirement of the overseas contracts while still benefitting from the same underlying commodity exposure. The SAFEX contracts are also smaller than their overseas counterparts allowing smaller consumers to access the market. Larger consumers can trade in bigger volumes or go direct to market makers such as RMB for more tailored hedging solutions.

South African investors can now access many of the same commodity products enjoyed by investors in other countries.

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