LONDON (Reuters) - A flight into cash during the credit crisis has helped drive oil and other commodity prices down so steeply that they are a potential "buy" for pension funds with a longer view.
But timing is everything.
"People are sitting on cash -- big lumps of it," said Mark Mathias, chief executive of commodity fund manager Quantum Asset Management. "Everyone is worried about when to go back in. Long-term, oil is cheap, but who knows where it goes in the short term."
Investors are searching for evidence that could signal whether the global downturn may be near to the bottom.
In these troubled times, the Baltic Freight Index has become a key leading indicator of economic vitality.
"The Baltic Freight Index is the electro-cardiogram for the world economy," said Hilary Till, principal, Premia Capital Management.
The Baltic Exchange's main sea freight index .BADI has risen over the last 10 days, but prices to ship commodities are still near their lowest in more than two decades.
By Jane Merriman
Source: Reuters
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