Tuesday, June 27, 2006

Lehman Brothers Commodity Index (LBCI)

NEW YORK, June 27 (Reuters) - U.S. investment banking group Lehman Brothers said on Tuesday it has launched a new commodity index of 20 products covering energy, metals, agriculture and livestock -- the four main segments of the raw materials market.

Initial returns on the Lehman Brothers Commodity Index - which tracks dollar-denominated commodities futures for a start -- would be available from the close of business on July 3.

Individual commodity indices would be published as well, the group said in a statement.

"We feel we have designed a commodity benchmark that is truly transparent and representative of the commodity market while providing a weighting scheme that will appeal to investors," Nicholas Gendron, Lehman Brothers' global head of Indices, said in the statement.

Lehman said it planned to re-set the weights of the individual commodities on the index annually. Weightings will fluctuate throughout the year based on price movements.

The weights of the major components of the index as of the beginning of 2006 were: 56.2 percent for energy; 22.8 percent for metals; 18.2 percent for agriculture, and 2.8 percent for livestock.

Based on price movements since, the weights -- as of June 23 -- were: 52.9 percent for energy; 27.2 percent for metals; 17.4 percent for agriculture, and 2.5 percent for livestock.

Lehman Brothers said it also plans to release future versions of the index that would include commodities from other non-U.S. exchanges and denominated in non-U.S. currencies.

"It is clear the commodities market has evolved to the point where we believe there is demand for both global and regionalized versions" of the index, said Neil Wardley, senior vice president for Lehman Brothers' index strategy group. -source

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