Analyse leverage of commodity trading firms individually: finance prof

Singapore

NOT all debt is equal - especially in commodity trading firms. The industry is, in general, a highly geared one, and every company's asset and liability structure should be analysed individually, according to commodity trading market expert Craig Pirrong.

"You really have to look at the assets and the leverage to see the structure of the liabilities, where they are using the money etc," said Dr Pirrong, a professor of finance at University of Houston who conducts research on the economics of commodity markets. "You have to look at the commodity trading firms individually."