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Investors appear to have an appetite for agricultural stocks and commodities. In response investment firms are coming out with new mutual funds and Exchange Traded Funds, or etfs which concentrate on this sector. Private companies are now doing successful initial public offerings ( ipos ). For instance, the latest agricultural ipo conducted was by Athabasca Potash Inc. Athabasca issued common shares at an ipo price of $4.25 per share. Within a few days of trading this stock closed on December 24th at a price of $6.90 per share.
Other agricultural related stocks such as Potash Corp of Saskatchewan and Agrium have enjoyed double-digit percentage growth in their share prices over the year. Investment companies are hoping to capitalize on the market's appetite for agricultural shares and commodities.
Claymore Investments Inc. has launched Claymore Global Agricultural ETF ( ticker symbol COW on the TSX ). In Toronto, Betapro Management Inc. has filed a prospectus to launch Horizons BetaPro Bull and Bear ETFs. These ETFs are aimed at the Canadian market. In the United States Market Vectors Agribusiness ETF (ticker symbol MOO) aims to fill the niche for investors wanting exposure to agricultural stocks and commodities.
Various factors are contributing to the rise of agricultural commodity prices. In Australia a drought has caused wheat prices to rise. Climate changes are influencing agricultural production. In developing countries such as India and China a growing middle class with a taste for meat is driving up the prices of meat and poultry. Consumers eating crops now have to compete with manufacturers of biofuels. All these factors are causing world agricultural prices to rise. These new ETFs try are aimed at providing investors with an opportunity to invest in a field of growing demand.
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