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Thursday, October 6, 2022

Energy crisis and investment opportunities

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Zooming in on the energy problem in Europe, the decision of Gazprom, the main Russian gas producer, stands out, which announced the cut off of supply to Germany through the Nord Stream 1 gas pipeline, pointing to technical failures just after the G7 (Group of Seven formed by the United Kingdom, the United States, Canada, France, Germany, Italy and Japan) established ceiling prices for energy, that is, that the countries that sign will be able to buy oil and Russian oil products transported by sea that are negotiated at the price cap or below it. These decisions added greater uncertainty and a renewed boost to energy prices, increasingly sensitive after the proximity of the European winter.

On the other hand, according to recent reports, analysts believe that oil demand remains high and are more optimistic in the future. petroleum products sector, as seasonality will benefit them and inventories remain low. In this sense, from the Balanz Group, we offer products to invest in the oil & gas sector. In particular, we find value in ExxonMobil’s CEDEAR; one of the world’s largest international oil and gas companies that is gaining market position and posted record first half profits. Its last quarter balance was surprisingly good, with earnings of USD 4.14 per share and showing a turnover of USD 115.68 billion.

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Another option to bet on the energy sector is the XLE, an ETF CEDEAR, which follows the evolution of the SPDR Energy Sector. Although it is found in relatively high historical values, it is the most diversified and accessible alternative to map the 28 most relevant companies in the oil, natural gas, energy-related equipment and services industries.

The CEDEARs (Argentine Deposit Certificates) represent shares of foreign companies that are listed on the local stock market and have become very important in recent years, being an alternative to diversify the risk of investment portfolios. In addition, they can be purchased in both pesos and dollars from very low amounts. The same happens with ETF CEDEARs, which have the same logic, but the underlying asset, instead of being a share, is an ETF (Exchange Traded Fund or Listed Fund) which by definition is a set of assets listed on the stock exchange. of values.

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In conclusion, high energy prices continue to be a burning issue due to the threat they pose to economic growth and inflation globally. From this point of view, it is very important to be very selective at the sector level in equities and to adapt to the increase in price volatility.

Product Analyst at Wealth Management Balanz Capital.

Source: Ambito

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