Interim Management Statement

TIDMDTL

RNS Number : 7212C
Dexion Trading Limited
18 November 2009

18 November 2009
DEXION TRADING LIMITED

INTERIM MANAGEMENT STATEMENT

This interim management statement relates to the period from 1 July 2009 to the
date of publication of this statement and has been prepared solely to provide
additional information in order to meet the relevant requirement of the UK
Listing Authority's Disclosure and Transparency Rules, and should not be relied
on by Shareholders, or any other party, for any other purpose.

Overview
Dexion Trading Limited is a Guernsey authorised, closed-ended investment company
listed on the London Stock Exchange. The Company is a feeder fund into Permal
Macro Holdings Ltd ("Permal Macro"), and, as such, the Company's investment
objective and policy mirror that of Permal Macro, which currently is to
provide investment returns that have a lower risk than traditional investment
returns and, over time, to achieve returns above those of the market. The Permal
Macro asset allocation policy is currently structured so as to target
an annualised return over the medium term of approximately 8% to 12% with
annualised volatility of 4% to 6%.|

NAV performance as of 30 September 2009
(References to the Company's managers are on a look through basis to the
underlying managers of Permal Macro)

+---------------------------+--------+--------+---------+-------+-----------+--------------+
| | Q3 | YTD | 3Y | Inc | Vol | Sharpe |
| | 2009 | (%) 1 | (%)1,5 | (%)1, | (%)1,2,5 | Ratio1,2,3,5 |
| | (%)1 | | | 2 ,5 | | |
+---------------------------+--------+--------+---------+-------+-----------+--------------+
| Dexion Trading GBP Share | 4.41% | 9.88% | 7.65% | 5.83% | 5.93% | 0.23 |
| NAV | | | | | | |
+---------------------------+--------+--------+---------+-------+-----------+--------------+
| MSCI World Index Gross (T | 17.57% | 25.55% | -3.80% | 2.49% | 17.83% | -0.06 |
| R) (US$)4 | | | | | | |
+---------------------------+--------+--------+---------+-------+-----------+--------------+
| JPM Global Gov't Bond | 5.95% | 3.89% | 9.43% | 5.53% | 7.18% | 0.28 |
| Index (T R) (US$)4 | | | | | | |
+---------------------------+--------+--------+---------+-------+-----------+--------------+
| Source: Dexion Capital | | | | | | |
| plc (calculation), | | | | | | |
| Bloomberg (data) | | | | | | |
+---------------------------+--------+--------+---------+-------+-----------+--------------+

1. NAV performance data is net of all fees and expenses. DTL invests solely in
Class A GBP Shares in Permal Macro, which shares are hedged into Sterling at the
PMH level.
2. Annualised from inception date of DTL GBP, and based on monthly data.
3. Risk free rate is average 1M GBP LIBOR since November 2004 (4.49%) for DTL GBP
indices and average of 1M USD LIBOR since November 2004 (3.49%) for US$ indices.
4. MSCI World Index and JPM Global Gov't Bond Index annualised since November 2004.
5. On 1 October 2007 DTL became a feeder fund of Permal Macro. Prior to this date
DTL had a different investment objective and policy and was managed by FRM
Investment Management Limited. Accordingly, performance figures prior to 1
October 2007 may not be indicative of or relevant to DTL's performance as it is
currently constituted.

The information in this table has not been subject to audit.
The statistics shown in the table above are for illustrative purposes only and
do not represent forecasts of returns or volatility.

Investment Adviser's Review

Market Overview

Equity Markets
The start of the third quarter was marked by rising U.S. equity markets, driven
largely by improving economic news and strong quarterly earnings reports. This
trend continued through the period, with good Q2 GDP estimates, housing and
employment figures, and a jump in automobile sales, the result of the
government's 'Cash for Clunkers' program. Equity markets also reacted favorably
to Ben Bernanke's re-nomination as Federal Reserve Chairman, allaying investor
uncertainty over the direction of U.S. monetary policy. In September, the S&P
500 reached new highs for the year as retail sales and manufacturing data
continued to surprise on the upside, helped by encouraging comments from
Bernanke about the US economic recovery. European equity markets followed suit,
rising on positive U.S. economic news and Eurozone manufacturing data, and
continued to climb on improving business and consumer sentiment. Later in the
quarter, these indices further benefited from constructive data in the region,
namely a rise in Germany's investor confidence index. At the start of the
quarter, Japanese equity markets pushed higher on strong earnings reports and a
brighter outlook for Japanese exporters, but tailed off towards the end, as
markets reacted to the stronger Japanese yen, disappointing retail sales
figures, profit-taking and prolonged deterioration in exports.

Fixed Income
U.S. bond yields fell through the period. Yields initially dropped on news of
declining consumer confidence and durable goods orders, as well as 'safe haven'
buying on weakness in consumer sentiment and concerns over the economic recovery
and weak inflation data. U.S. bond yields were further impacted on news that the
Federal Reserve would keep the Fed Funds rate near zero, asserting that the rate
will remain at "exceptionally low levels" for an extended period, and the bank's
announcement that the mortgage-backed security purchase program would be
extended until March of 2010. U.K. bond yields declined on the expansion of the
BOE's quantitative easing policy and the central bank's announcement that it
would leave the base rate unchanged. Japanese bond yields also moved lower
throughout the quarter on concerns that potential monetary tightening in China
would impede economic growth.

Foreign Exchange
The U.S. dollar continued to slide against most major currencies throughout the
quarter as the greenback's role as the world's reserve currency continued to be
re-assessed and markets refocused attention towards higher risk trades. The
Japanese yen strengthened against most major currencies amid expectations that a
change in Japan's governing party would lead to improvement in the economy. The
yen rallied late in the quarter versus the dollar, finding support from the
Japanese Finance Minister's strong currency policy. The British pound was one of
the few currencies to depreciate against the U.S. dollar following comments by
Bank of England Governor Mervyn King that the weak domestic currency would help
to rebalance that nation's economy. The euro appreciated against most currencies
on improved Eurozone economic data. The commodity currencies, such as the
Australian dollar and Brazilian real, benefited from a renewed surge in
commodity prices early in the quarter, and into quarter end, the Australian
dollar climbed strongly against the U.S. dollar in anticipation that the Reserve
Bank of Australia would be one of the first major banks to raise rates. The New
Zealand dollar was also a standout performer, reaching multi-month highs against
the U.S. dollar on expectations of export-led growth in the country.

Commodities
Crude oil prices fell at the start of the quarter following bearish supply data,
but soon reversed as investor sentiment improved. Crude sold off in the middle
of the quarter amid weakness in equity markets and bearish inventory figures,
but oil prices subsequently rallied on optimism surrounding global growth. Crude
oil finished marginally up for the quarter. Natural gas prices surged during the
latter half of the quarter on supply concerns and forecasts of a cold winter.
Gold prices advanced markedly amid increased hedging demand in lieu of a
slumping U.S. dollar. Base metals surged on perceived demand, positive U.S.
economic news and the inventory re-stocking theme. The agricultural and soft
commodities markets were generally higher early in the quarter, before selling
off from news of good growing conditions in the U.S. Performance in these
markets was ultimately mixed for the quarter.

Strategy Overview

Discretionary Macro
Permal Macro's underlying managers who were long the short end of the U.S. and
European yield curves, as well as those holding long positions in the credit
sector, were significant contributors to performance. Mid-quarter profits came
from long positions in the front end of global yield curves, as well as short
positions in the U.S. dollar. Long positions in equity, crude oil and
agricultural commodities also proved beneficial. Regionally, the rally in
emerging market credit, equity indices and sovereign bonds contributed strongly
to performance.

Systematic Macro
Systematic managers made small gains early in the quarter, despite trend
reversals in many of the markets that they trade. Long positions in global
equities were generally profitable, as were long positions in the Canadian
dollar, euro and Swiss franc versus the U.S. dollar. Gains also came from long
positions in crops and base metals. Additionally, long euro versus short pound
and long Australian versus short Canadian dollar positioning drove returns for
some of the non-trend followers. In September, trend-followers did particularly
well, capturing the pronounced moves in currency markets, especially the falling
U.S. dollar, as well as the rise in equity indices. Long positions in global
fixed income also proved lucrative for these managers.

Relative Value Arbitrage
Relative Value Arbitrage managers posted mixed results early on. Fixed income
arbitrage managers generated profits as bonds rallied and basis continued to
tighten. Mid-quarter, fixed income relative value strategies produced further
gains from yield curve trading in the U.K., as the relative cheapness of the
back end of the yield curve converged towards equilibrium following the Bank of
England's extension of the quantitative easing program. These managers continued
to perform into quarter-end, with profits generated from yield curve trading in
the U.K., namely, "butterfly trades." Gains were also made in similar yield
curve trades in Europe.

Natural Resources
Natural Resources managers were the top performers early in the quarter,
primarily from long positions in gold-related equities as well as long
positions in basic industry equities and energy companies. Additional gains came
from long positions in base and precious metals. Short positions in agricultural
commodities also contributed to positive performance.

Outlook
Recent global economic data gives further credence to the belief that the worst
of the financial crisis is behind us. However, Permal Macro's underlying
managers still believe that there are many potential roadblocks to the current
recovery. One of the major concerns is the eventual withdrawal of fiscal and
monetary stimulus, which has provided significant support to investor sentiment
and asset prices. In addition, the output gap remains wide, which does not bode
well for the unemployment situation, particularly in the U.S. and the U.K.. In
lieu of these concerns, they believe that major central banks will be forced to
maintain their accommodative policies for longer to support global growth.
However, they also note that this policy stance will no longer be a coordinated
effort.

Fixed Income
Within fixed income markets, most underlying managers believe that the major
central banks will maintain low rates for an extended period. They have
expressed this idea primarily via long positions at the front end of yield
curves in major developed countries. While these trades have been profitable and
managers continue to hold these positions, others feel that this theme has been
reasonably priced in at this juncture and have started to reduce exposure to
this trade. At the long end of the curves, the debate continues as to whether
deflationary pressures or inflationary fears will ultimately gain the upper
hand.

Currencies
Managers are maintaining their bearish bias towards the U.S. dollar given its
increasingly questionable role as a global reserve currency. They are bullish
emerging market currencies, believing these too have lagged other risky assets,
and continue to have long positions in commodity currencies, particularly the
Australian dollar. There is also a widespread belief that Asian (ex-Japan)
currencies will appreciate against the U.S. dollar.

Equities
Many of Permal Macro's managers remain on the sidelines as far as equity
positioning. While they acknowledge the disconnect between economic fundamentals
and price action, they also recognize that any pullback in equities could be
short-lived. Some managers point out that the equity market rally has been
driven in part by market participants continuing to chase performance,
regardless of weak fundamentals. In addition the return of liquidity in those
markets has fueled investors' appetite for risk-seeking trades. Hence, equities
may very well still have further upside.

Commodities
Managers maintain their positive outlook towards the commodities sector. Many
believe that the re-stocking theme in the U.S. and Europe will be supportive of
prices over the short-term, as companies look to build-up inventories in
anticipation of a recovery in global demand. However, we are likely to
experience continued volatility.

Material Events since 30 June 2009
On 28 August 2009 the Company announced the release of its Interim Financial
Report for the period ended 30 June 2009, in accordance with DTR 6.3.5.

Investor Information
The latest available portfolio information can be accessed by eligible investors
via www.clientservices@dexiontrading.com

Enquiries:

Chris Copperwaite
Dexion Capital (Guernsey) Limited

Tel: + 44 (0) 1481 743940
End of announcement

This information is provided by RNS
The company news service from the London Stock Exchange
END

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