The banking Academy
The Asian Banker Diploma Structuring, Pricing & Trading Commodity Derivatives
19-21 September 2012
Venue to be confirmed,, Singapore

Maximise your competitiveness whilst mitigating your risk through best-practice strategies for the structuring, pricing and trading of commodity derivatives.

Maximise your competitiveness whilst mitigating your risk through best-practice strategies for the structuring, pricing and trading of commodity derivatives.

The need to manage risk and exposure to changes in asset values has always been fundamental to good corporate governance, be it for a financial institution managing its assets or for one of its corporate clients. Here in Asia, the importance of having competitive strategies in place to manage commodities exposure has never been so vital. The uncertainties and volatility in the global commodity markets mean that both financial institutions and their corporate clients need to have their risks hedged in a waterproof manner. At the same time, the increasing hunger for commodities from the growing Asian economies means that the demands on financial institutions from their corporate clients for commodity derivative products has never been greater. Thus banks need to meet their clients’ needs effectively or else lose market share.

Throughout this intensive 3-day training course, attendees will be led through every component of a holistic commodity derivatives structuring and pricing strategy, both for the needs of your institution and for those of your corporate client. From the developing regulatory demands to precisely understanding your clients’ specific needs. Managing the particularities of volatility in today’s turbulent climate will be under scrutiny, as too will be the fundamentals of best- practice pricing. The intricacies of commodity derivatives modelling will be explored in depth and of course the various types of commodity derivative instruments will be examined in the minutest of detail.

The format of this 3-day intensive training course will be a mixture of interactive exercises and scenarios, group discussions, real case studies, focused tuition, and practical problem-solving.
• Each section of this comprehensive programme will be supported by individual and group exercises and case studies

• Limited class size: Class size is limited to 30 delegates to ensure effective one-to-one interactivity
This programme is designed to achieve the following goals:
• Understand the macroeconomic environment in Asia and the implications for your commodity derivative business
• Effectively design client risk management solutions to hedge commodity risk
• Develop best-practice commodity trading strategies
• Devise successful commodity investment structures
• Increase your market share through the development of innovative and tailored structured commodity products
• Exploit the growing opportunities in exchange-traded products
This important training is designed to mobilize a wide range of senior professionals whose collective skills are vital for derivatives structuring in the organisation, including:

• (Commodity) Derivatives structuring / trading
• Commodity / energy trading
• Commodity solutions
• Commodity sales & marketing
• Risk
• Fund & portfolio management
• Financial analysis
Day 1
8.30-9.00 Registration
0900 Examining how commodities are different from traditional financial assets
• Defining the commodity – what is a traded commodity?
• Issues of quality
• Price reporting
• Unique pricing properties (average prices, negative prices)
• The role of futures
• Hedging commodity risk in the absence of a traded market
Case study: Bankruptcy of Japan Airlines
  Coffee break
• Understanding physical supply chains
Case study: Physical supply chain for coal
• Pricing commodities
- Devising the forward price curve
- Impact of inelasticity
- Seasonality
- Contango and backwardation
- Convenience yields
- Pricing and arbitrage
- Pricing from benchmarks
Case study: commodity price drivers
Case study: backwardation in the cocoa market
Case study: benchmark pricing in the crude oil market
1230-1400 Lunch
 1400 Accurately analysing your client’s commodity exposure
• Understanding the client’s hedging motivation
- Do not hedge
- Hedge to guarantee future unit costs
- Hedging restricted to manage production time lags
- Hedging on behalf of the end client
• Developing a framework for developing client risk management solutions
- Defining the exposure
- Determine the mandate from stakeholders
- Identify risk metrics and thresholds
- Determine the optimal hedg
  Tea break
  Client risk management solutions – Part I
Vanilla client hedging strategies
Case study: Characteristics of vanilla commodity swaps and options
1700 End of Day One

Day 2
0830-0900 Registration
900 Client risk management solutions – Part II
• Trade finance solutions
   - ‘monetising’ inventories
Case study: prepaid variable forwards on coal
• Hedging non-standard exposures
   - FX / commodity hybrid solutions
Case study: Dual barrier options
   - Funding cheapeners for consumers and producers
   - Hedging multiple non-core commodity exposures
Case study: using basket options to hedge multiple exposures
   - Yield enhanced strategies for cash management
Case study: Yield enhanced structures
  Coffee break
  Client risk management solutions – Part II
• Spread options
   - Hedging cross commodity exposure
   - Hedging production time lags
1230-1400 Lunch

Commodity-specific trading strategies: An in-depth focus
• Analysing commodity trading strategies
   - Directional strategies
   - Sector spreads
   - Energy spreads
   - Time spreads
   - Seasonality
   - Funding strategies
Case study: Using Gold swaps to raise USD
Case study: Base metal trading strategies

  Tea break
  Commodity-specific trading strategies: An in-depth focus
1730 End of Day Two

Day 3
9.00 Strategies for devising successful commodity investment structures
• Rationale for commodity investing
   - Portfolio diversification
   - Inflation hedging
   - USD currency hedge
• Commodities and correlation
   - Cross commodity correlation
   - Commodity returns vs. commodity equity returns
   - The business cycle and commodities
Case study: The rationale for investing in commodities
  Coffee break
  Best-practice use of commodity indices
• Popular commodity indices and their composition
• Understanding the sources of commodity index returns
   - Spot return
   - Excess return and the roll yield
   - Total return
Case study: Using commodity index swaps to take commodity exposures
• Beta vs. alpha index products
12.30-2.00 Lunch

Exploiting the opportunities in exchange-traded products
• The characteristics of
   - Exchange-traded commodities
   - Exchange-traded funds
   - Exchange-traded notes
Case study: ETCs vs. ETNs

  Tea break
  Increasing your market share through the provision of innovative and tailored structured commodity products
• How are structured notes created?
• Increasing the participation rate?
• What differentiates commodity structured products?
   - Backwardated markets and European option valuation
   - Term structure of implied volatilities
   - Inter-commodity correlations
Case study: Multi-asset commodity structures
5.30pm End of Programme

Neil Schofield is the principal of FMT Ltd., a UK-based company offering training services in the areas of treasury, derivatives, capital markets and risk management to financial institutions, central banks and corporations worldwide.

Neil was global head of Financial Markets training at Barclays Capital from 2001 to 2008. He teaches primarily on the rates business, covering all of the major asset classes and their respective derivative products from foreign exchange through to commodities.

Before joining Barclays Capital, he was a director at Chisholm-Roth Training for 4 years, where he was responsible for provision of training services for a number of blue chip global investment banks. Clients included Citigroup, Deutsche Bank, Goldman Sachs and JP Morgan Chase.

He started his training career at Chase Manhattan Bank, where he was originally employed as an internal auditor. Over a period of nine years, he conducted numerous internal and external training seminars including the Bank of England and the Federal Reserve System in the USA.

He has also held positions with Security Pacific Hoare Govett (now trading as Bank of America) and Lloyds TSB.

Neil holds a B.Sc. in Economics from Loughborough University and an MBA from Manchester Business School. He was elected as a Fellow of the IFS School of Finance (formerly the Chartered Institute of Bankers) in 1999.

Neil was appointed as a Visiting Fellow at the University of Reading ICMA centre in April, 2007.

He is author of the book “Commodity Derivatives: Markets and Applications” and “Trading the Fixed Income, Inflation and Credit Markets” both published by Wiley

This is one of the best-designed programmes to provide Asian financial institutions with the tools and expertise necessary to develop and provide the most innovative and pertinent products and services for maximum competitive advantage in the derivatives market place.

Register today by completing the registration form below or contact Ms Orlanda Poblete tel: +65 6236 6527 or email for more information.

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What previous attendees say:

"The approach used by the trainer in leading the training is good with lots of relevant examples"
Financial Analyst, UBS