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  • US Natural Gas Fund stops issuing new shares 0 comments
    Jul 7, 2009 5:28 PM | about stocks: UNG

    "Waiting for regulatory approval to issue 1 bln new units, SEC has not yet approved, has no comment and not yet approved the request and a spokesman for the agency said the SEC has no comment.


    The United States Natural Gas Fund, temporarily suspend issuing new shares pending regulatory approval to expand the number of shares it can issue to 1.2 billion.
    The U.S. Natural Gas fund  filed on June 5 with the SEC for permission to issue 1 billion new units, adding to the previously approved 200 million units.


    The long-only exchange traded fund's move to massively expand the number units it can issue has sparked concerns among market players who say the jump in the number of units may open the natural gas market to more speculation and influence prices when it rolls positions on the futures market from month to month.


    On Monday, UNG had 32.1 million units left of the 200 million it is authorized to issue."

    This is the news of today, what to say?

    Scenario 1.
    SEC will approve, and the UNG can collect 5/6 times more money to buy more and more gas, and somewhere... they will seek a profit and this mean a gas price higher.

    Scenario 2.
    SEC won't approve in the near future living UNG like a close funds, if I don't wrong, and this mean that when investors will need to buy shares of UNG cannot do other then buy the existing shares and with few sellers can mean the price of gas that will even raise/rally faster like in a fast market or with moves of 20% in a single days as already did some week ago.

    What do you think about what is happening? Can seriously SEC don't approve the issue of shares with the temporary excuse that the influence of the gas fund on rollover can influence the stability of the futures in the rollover seen that USO and UNG are the majoir market movers of those futures contracts seen the high number of contracts accumulated (and recently the USO has seen decrease massively the number of position while UNG increasing seen that investors where looking to the unique commodity still near the lows)?

    At you the comments.

    Stocks: UNG
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