The international crude oil price has recently been “bullishâ€, and Brent’s crude oil price has risen to a peak of more than US$75 per barrel, which has made the oil and gas-related industries and markets “slowly eager to moveâ€. It has already forgotten the heavy blow of oil prices collapsed four years ago. Enter the "black gold" field of crude oil.
As crude oil prices rise, Malaysia, as a net oil and gas exporter, will certainly help to enrich the national treasury and obtain an extra fortune. On the whole, the additional "black gold" of the Malaysian government is expected to be "not worth the loss" for the overall economy. In particular, it will increase the production or operating costs of many industries.
International crude oil rebounds, its ins and outs, in the end who is the family and losers, whether the high price can hold steady, how will the stock market investors reposition, or it is necessary to add more calculations, more calculations, more than to fall into the "successful black gold "The dilemma."
Oil prices hit a three-and-a-half-year high
Brent crude oil prices have risen 10% per barrel so far this year to a three-and-a-half-year peak of US$74.64, mainly due to the global crude oil demand rising by 1.6% in the first quarter of this year. In the same period, crude oil supply increased by only 1.2%. This has caused global crude oil inventories to fall by 100,000 barrels per day, which is the downward trend since the second quarter of 2017.
CIMB research analysts pointed out that if US President Trump re-attacks Iran on May 12 this year, it will reduce the global supply of crude oil by 1 million barrels per day, or 1.4% of global crude oil demand. The price of crude oil has risen strongly.
International Brent crude oil prices have risen 10% to US$74 per barrel so far this year. It is created and supported by a number of positive factors. It is expected that the price will remain for some time, not what short-term speculative activities can do.
Analyst: Reduce production and help prices
CIMB research analysts pointed out that global crude oil demand in the first quarter of this year increased by 1.6% year-on-year, but crude oil production only increased by 1.2%.
He pointed out that since the production of the Organization of Petroleum Exporting Countries (OPEC) on January 1, 2017, they have all complied with the production reduction agreement, and the compliance reduction in the first quarter of this year reached 152% (that is, the number of production cuts exceeded expectations), while non-oil exporting countries. Organizational partners' compliance reductions reached 84%, which is enough to offset the increase in production in other countries or regions, thus supporting crude oil prices at a high level.
The increase in crude oil produced by the United States, Canada, and other former Soviet states (excluding Russia) is enough to be offset by countries such as the Organization of Petroleum Exporting Countries, so global crude oil inventories fell by 100,000 barrels per day as of the first quarter of 2018.
In February of this year, the industrial crude oil inventories of the Organization for Economic Co-operation and Development (OECD) have fallen to near the average level of 2013-2017. It is expected that the inventory in the next few months will fall further, mainly because the demand for crude oil in the international market is increasing. Without any reduction, in view of the fact that the Organization of Petroleum Exporting Countries has adhered to the agreement on production reduction, it is expected that the international crude oil inventories will fall further in the next three quarters (this year).
The Organization of Petroleum Exporting Countries and Russia stated that their production reduction cooperation agreements will last at least until 2018 and will then enter the market in an orderly manner. Saudi Arabia is said to be interested in seeing that crude oil prices can stabilize at a price of $80 a barrel, and may even delay the production cooperation agreement until 2019.
Government revenue increases inflation pressure
As a net oil and gas exporter, Malaysia will account for 3.5% of Malaysia’s gross domestic product or RM47.2 billion in 2017, so higher crude oil prices mean a positive spillover effect on the Malaysian economy and a promising push. The high government's current account, in other words, the Malaysian government will have more income.
Analysts pointed out that according to a sensitivity analysis, the Malaysian government set a price of 52 US dollars per barrel in the 2018 budget. If the international oil price increases by 10 US dollars per barrel, it will bring an additional 3 billion to the Malaysian government. Ringgit income.
As of this year, international crude oil prices averaged $69 a barrel, and the Malaysian government is expected to receive an additional RM5 billion in revenue.
RM exchange rate rise
CIMB research analysts believe that international crude oil prices have risen sharply, and if it is completely transferred to retail gasoline prices, it is expected to push up the domestic inflation rate. However, as the exchange rate of the Malaysian Ringgit has also rebounded, it has offset some of the inflationary pressure. At the same time, it is expected that the government will re-allocate additional “profiteering†from crude oil revenues to low-income groups through measures such as the One-Maid Assistance Program to help them cope with higher inflationary pressures.
Other measures taken by the Government to assist nationals in coping with inflation, in addition to the One Ma Assistance Scheme, include salary increases for civil servants, special payment plans, petrol subsidies, etc., which are expected to be introduced in the second half of 2018.
Malaysian stocks: winners and losers more
The rise in international crude oil stock prices has been favorable and disadvantageous for Malaysia. Although Malaysia is a net oil and gas exporting country, it will benefit from the rise in crude oil prices. However, the transportation and raw material production costs of corporate institutions will rise to a certain extent.
Oil and gas petrochemical planting is a big winner
According to CIMB research and analysis, on the whole of the bank's research list, the high crude oil price is actually more than the loser. Of course, oil and gas stocks, specific petrochemical companies, and planting stocks are clearly the biggest winners.
High crude oil prices will benefit all oil and gas stocks, whether directly or indirectly, including directly benefiting from higher crude oil and petroleum products. In terms of acceptance, as crude oil prices rebound, global oil companies or consortia (including Malaysia’s national oil) will have more confidence in future capital expenditures, thereby enabling oil and gas service companies, whether upstream or downstream. In the field, you may get a piece of it.
In the short term, the main winners of high oil prices, the first to promote Shabra Energy (SAPNRG, 5218, Main Board Trade Service Group) and the national oil trade (PETDAG, 5681, Main Board Trade Service Group). At the same time, high crude oil prices also helped support the price of crude palm oil. Petrochemicals (PCHEM, 5183, main board industrial product group) also benefited a lot.
Air shipping media car rubber gloves into losers
The Malaysian stock market loses the first place in aviation, shipping, media, automobiles and rubber gloves. Therefore, high oil prices are indeed "not worth the loss" for the Malaysian stock market.
High oil prices are the "heart thorns" of aviation stocks. The aircraft fuel price predicted in 2018 is $75 per barrel, compared with an average of $78 per barrel so far this year, and the current spot price is $83 per barrel.
If the price is 83 US dollars per barrel, it is expected that the core net profit of AirAsia (AIRASIA, 5099, Main Board Trade Service Group) will be reduced by 30%. The core net profit of AirAsia X (AAX, 5283, Main Board Trade Service Group) is reduced by 60%, and the strong exchange rate of the Malaysian Ringgit, including its strong exchange rate, can be seen.
Lianchang Research will maintain the target forecast for the FBM KLCI at 1880. It is expected that the trend of the FBM KLCI will be more volatile and volatile before the national election day on May 9, 2018.
Winner
â— Planting industry: promote the price of crude palm oil
Higher crude oil prices will strengthen the viability of biodiesel, which will push the price of crude palm oil to rise.
In particular, it may prompt more governments to provide incentives and subsidies for biodiesel.
At present, the price of crude oil is more than US$75 per barrel, and the price of crude palm oil is RM2,040 per metric ton. If the price of crude palm oil is going to rise to MYR2,383 per metric ton, the price of crude oil will go up to $86 per barrel. If the price of crude oil reaches $97, the price of crude palm oil is expected to rise to RM2,700.
â—Petrochemical: Guoyou Chemical earned an increase
The higher crude oil price will make the price and profit of the natural gas basic producer, Petrochemical (PCHEM, 5183, Main Board Industrial Products Group), higher, mainly due to the corresponding increase in operating profit.
However, this will negatively affect Lotte Dateng (LCTITAN, 5284, Main Board Industrial Products Group) because it mainly produces the cost of naphtha, which cuts its product profit.
â— Bank: Expect to get more business
It is expected that high oil prices will be slightly beneficial to bank stocks, mainly because oil and gas companies will be better able to repay loans or debts. If the oil company issues more engineering contracts, the bank will be expected to obtain more financing and loan business.
neutralize
â— Industry: With certain resilience, it is expected that the impact of the industrial sector on the fluctuation of oil prices will not be significant, in other words, it has a certain ability to resist falling.
Although high oil prices may affect consumer sentiment and push up inflation, they have little impact on overall industry sales and construction costs.
â— Consumer goods: The transfer of cost to consumers' high oil prices will push up living expenses, which indirectly negatively impacts the consumer goods sector. However, some consumer goods companies will transfer the cost of the product to the consumer, but excessive transfer will impact the sales of the product.
â—Construction: The impact is not significant on the cost of oil prices, accounting for less than 5% of the total cost of the builder, so the impact on the oil price factor is not significant.
Losers â— Aviation: Increased fuel costs Because fuel costs account for a high total cost, airlines have no way to transfer all of the extra oil costs to customers. Therefore, aviation stocks - AirAsia and AirAsia X will be under greater pressure to reduce profits and earn less.
â— Shipping: The carrying capacity rate is lower. The oil price has two major negatives for shipping stocks; high oil prices may also mean less crude oil supply, which reduces the tanker load and the rate of decline (because more ships strive for less supply) Due to the amount).
At the same time, high oil prices also affect the cost of oil tankers such as international shipping (MISC, 3816, Main Board Trade Service Group).
â— Media: The price of printed paper will rise, and the price of printed news will increase the price of printed newsprint. This is the main production cost of print media.
At present, the print media has faced the challenges of the threat of online media and the decline in circulation. If high oil prices push up costs, it is even worse.
â— Cars: Higher car costs and higher oil prices will cause major pressure on automakers to produce more cars. Because it makes consumers more expensive to car. At the same time, consumers can choose other means of transportation, including using more public transportation such as railway trains or cheaper online recruits.
â— Glue gloves: increase production costs Glue gloves, especially nitrile gloves, are made from crude oil, so high oil prices will increase the cost of production of gloves.
The negative impacts of the production of butyronitrile (HARTA, 5168, motherboard industrial product group) and high-yield products (KOSSAN, 7153, main board industrial product group) are more significant.
On the contrary, companies that produce more rubber gloves, such as top gloves (TOPGLOV, 7113, motherboard industrial product group) and Speedmaster (SUPERMX, 7106, motherboard industrial product group), have lower impacts.
Stock picking strategy: Wanfa Guizong - profit for Wang Dahua Ji Xian research pointed out that no matter whether the international crude oil price is up and down, the bank's evaluation of the various sectors of the Malaysian stock market is still the main key to corporate profits.
Although Brent crude oil prices have risen to a high level of 75 to 80 US dollars per barrel, the profit transparency of local oil and gas stocks has yet to benefit.
The bank is also optimistic about oil and gas stocks with profitability transparency, profitability upgrades, and international competitiveness, and not relying on national oil engineering contracts.
The bank's top pick is Shiba Power (SERBADK, 5279, Main Board Trade Service Group), which is expected to be revalued for its international oil and gas industry contractors, especially with a project contract of over RM7 billion.
It is also optimistic about Amada (ARMADA, 5210, Main Board Trade Service Group) (target price is RM1 xian), as it is expected to help with its Kraken/Olombendo oil and gas facilities confirming more revenue in the first half of this year. Increase investor confidence in it.
The bank believes that Yunsheng Holdings (YINSON, 7293, Main Board Trading Group) (target price of RM4 40 cents) has the potential for long-term profitability.
UOB Kay Hian’s research suggests “selling†international shipping (target price of RM6 25 cents) and Baraka (BARAKAH, 7251, Main Board Trade Service Group), due to the emergence of profit risk.
As crude oil prices rise, Malaysia, as a net oil and gas exporter, will certainly help to enrich the national treasury and obtain an extra fortune. On the whole, the additional "black gold" of the Malaysian government is expected to be "not worth the loss" for the overall economy. In particular, it will increase the production or operating costs of many industries.
International crude oil rebounds, its ins and outs, in the end who is the family and losers, whether the high price can hold steady, how will the stock market investors reposition, or it is necessary to add more calculations, more calculations, more than to fall into the "successful black gold "The dilemma."
Oil prices hit a three-and-a-half-year high
Brent crude oil prices have risen 10% per barrel so far this year to a three-and-a-half-year peak of US$74.64, mainly due to the global crude oil demand rising by 1.6% in the first quarter of this year. In the same period, crude oil supply increased by only 1.2%. This has caused global crude oil inventories to fall by 100,000 barrels per day, which is the downward trend since the second quarter of 2017.
CIMB research analysts pointed out that if US President Trump re-attacks Iran on May 12 this year, it will reduce the global supply of crude oil by 1 million barrels per day, or 1.4% of global crude oil demand. The price of crude oil has risen strongly.
International Brent crude oil prices have risen 10% to US$74 per barrel so far this year. It is created and supported by a number of positive factors. It is expected that the price will remain for some time, not what short-term speculative activities can do.
Analyst: Reduce production and help prices
CIMB research analysts pointed out that global crude oil demand in the first quarter of this year increased by 1.6% year-on-year, but crude oil production only increased by 1.2%.
He pointed out that since the production of the Organization of Petroleum Exporting Countries (OPEC) on January 1, 2017, they have all complied with the production reduction agreement, and the compliance reduction in the first quarter of this year reached 152% (that is, the number of production cuts exceeded expectations), while non-oil exporting countries. Organizational partners' compliance reductions reached 84%, which is enough to offset the increase in production in other countries or regions, thus supporting crude oil prices at a high level.
The increase in crude oil produced by the United States, Canada, and other former Soviet states (excluding Russia) is enough to be offset by countries such as the Organization of Petroleum Exporting Countries, so global crude oil inventories fell by 100,000 barrels per day as of the first quarter of 2018.
In February of this year, the industrial crude oil inventories of the Organization for Economic Co-operation and Development (OECD) have fallen to near the average level of 2013-2017. It is expected that the inventory in the next few months will fall further, mainly because the demand for crude oil in the international market is increasing. Without any reduction, in view of the fact that the Organization of Petroleum Exporting Countries has adhered to the agreement on production reduction, it is expected that the international crude oil inventories will fall further in the next three quarters (this year).
The Organization of Petroleum Exporting Countries and Russia stated that their production reduction cooperation agreements will last at least until 2018 and will then enter the market in an orderly manner. Saudi Arabia is said to be interested in seeing that crude oil prices can stabilize at a price of $80 a barrel, and may even delay the production cooperation agreement until 2019.
Government revenue increases inflation pressure
As a net oil and gas exporter, Malaysia will account for 3.5% of Malaysia’s gross domestic product or RM47.2 billion in 2017, so higher crude oil prices mean a positive spillover effect on the Malaysian economy and a promising push. The high government's current account, in other words, the Malaysian government will have more income.
Analysts pointed out that according to a sensitivity analysis, the Malaysian government set a price of 52 US dollars per barrel in the 2018 budget. If the international oil price increases by 10 US dollars per barrel, it will bring an additional 3 billion to the Malaysian government. Ringgit income.
As of this year, international crude oil prices averaged $69 a barrel, and the Malaysian government is expected to receive an additional RM5 billion in revenue.
RM exchange rate rise
CIMB research analysts believe that international crude oil prices have risen sharply, and if it is completely transferred to retail gasoline prices, it is expected to push up the domestic inflation rate. However, as the exchange rate of the Malaysian Ringgit has also rebounded, it has offset some of the inflationary pressure. At the same time, it is expected that the government will re-allocate additional “profiteering†from crude oil revenues to low-income groups through measures such as the One-Maid Assistance Program to help them cope with higher inflationary pressures.
Other measures taken by the Government to assist nationals in coping with inflation, in addition to the One Ma Assistance Scheme, include salary increases for civil servants, special payment plans, petrol subsidies, etc., which are expected to be introduced in the second half of 2018.
Malaysian stocks: winners and losers more
The rise in international crude oil stock prices has been favorable and disadvantageous for Malaysia. Although Malaysia is a net oil and gas exporting country, it will benefit from the rise in crude oil prices. However, the transportation and raw material production costs of corporate institutions will rise to a certain extent.
Oil and gas petrochemical planting is a big winner
According to CIMB research and analysis, on the whole of the bank's research list, the high crude oil price is actually more than the loser. Of course, oil and gas stocks, specific petrochemical companies, and planting stocks are clearly the biggest winners.
High crude oil prices will benefit all oil and gas stocks, whether directly or indirectly, including directly benefiting from higher crude oil and petroleum products. In terms of acceptance, as crude oil prices rebound, global oil companies or consortia (including Malaysia’s national oil) will have more confidence in future capital expenditures, thereby enabling oil and gas service companies, whether upstream or downstream. In the field, you may get a piece of it.
In the short term, the main winners of high oil prices, the first to promote Shabra Energy (SAPNRG, 5218, Main Board Trade Service Group) and the national oil trade (PETDAG, 5681, Main Board Trade Service Group). At the same time, high crude oil prices also helped support the price of crude palm oil. Petrochemicals (PCHEM, 5183, main board industrial product group) also benefited a lot.
Air shipping media car rubber gloves into losers
The Malaysian stock market loses the first place in aviation, shipping, media, automobiles and rubber gloves. Therefore, high oil prices are indeed "not worth the loss" for the Malaysian stock market.
High oil prices are the "heart thorns" of aviation stocks. The aircraft fuel price predicted in 2018 is $75 per barrel, compared with an average of $78 per barrel so far this year, and the current spot price is $83 per barrel.
If the price is 83 US dollars per barrel, it is expected that the core net profit of AirAsia (AIRASIA, 5099, Main Board Trade Service Group) will be reduced by 30%. The core net profit of AirAsia X (AAX, 5283, Main Board Trade Service Group) is reduced by 60%, and the strong exchange rate of the Malaysian Ringgit, including its strong exchange rate, can be seen.
Lianchang Research will maintain the target forecast for the FBM KLCI at 1880. It is expected that the trend of the FBM KLCI will be more volatile and volatile before the national election day on May 9, 2018.
Winner
â— Planting industry: promote the price of crude palm oil
Higher crude oil prices will strengthen the viability of biodiesel, which will push the price of crude palm oil to rise.
In particular, it may prompt more governments to provide incentives and subsidies for biodiesel.
At present, the price of crude oil is more than US$75 per barrel, and the price of crude palm oil is RM2,040 per metric ton. If the price of crude palm oil is going to rise to MYR2,383 per metric ton, the price of crude oil will go up to $86 per barrel. If the price of crude oil reaches $97, the price of crude palm oil is expected to rise to RM2,700.
â—Petrochemical: Guoyou Chemical earned an increase
The higher crude oil price will make the price and profit of the natural gas basic producer, Petrochemical (PCHEM, 5183, Main Board Industrial Products Group), higher, mainly due to the corresponding increase in operating profit.
However, this will negatively affect Lotte Dateng (LCTITAN, 5284, Main Board Industrial Products Group) because it mainly produces the cost of naphtha, which cuts its product profit.
â— Bank: Expect to get more business
It is expected that high oil prices will be slightly beneficial to bank stocks, mainly because oil and gas companies will be better able to repay loans or debts. If the oil company issues more engineering contracts, the bank will be expected to obtain more financing and loan business.
neutralize
â— Industry: With certain resilience, it is expected that the impact of the industrial sector on the fluctuation of oil prices will not be significant, in other words, it has a certain ability to resist falling.
Although high oil prices may affect consumer sentiment and push up inflation, they have little impact on overall industry sales and construction costs.
â— Consumer goods: The transfer of cost to consumers' high oil prices will push up living expenses, which indirectly negatively impacts the consumer goods sector. However, some consumer goods companies will transfer the cost of the product to the consumer, but excessive transfer will impact the sales of the product.
â—Construction: The impact is not significant on the cost of oil prices, accounting for less than 5% of the total cost of the builder, so the impact on the oil price factor is not significant.
Losers â— Aviation: Increased fuel costs Because fuel costs account for a high total cost, airlines have no way to transfer all of the extra oil costs to customers. Therefore, aviation stocks - AirAsia and AirAsia X will be under greater pressure to reduce profits and earn less.
â— Shipping: The carrying capacity rate is lower. The oil price has two major negatives for shipping stocks; high oil prices may also mean less crude oil supply, which reduces the tanker load and the rate of decline (because more ships strive for less supply) Due to the amount).
At the same time, high oil prices also affect the cost of oil tankers such as international shipping (MISC, 3816, Main Board Trade Service Group).
â— Media: The price of printed paper will rise, and the price of printed news will increase the price of printed newsprint. This is the main production cost of print media.
At present, the print media has faced the challenges of the threat of online media and the decline in circulation. If high oil prices push up costs, it is even worse.
â— Cars: Higher car costs and higher oil prices will cause major pressure on automakers to produce more cars. Because it makes consumers more expensive to car. At the same time, consumers can choose other means of transportation, including using more public transportation such as railway trains or cheaper online recruits.
â— Glue gloves: increase production costs Glue gloves, especially nitrile gloves, are made from crude oil, so high oil prices will increase the cost of production of gloves.
The negative impacts of the production of butyronitrile (HARTA, 5168, motherboard industrial product group) and high-yield products (KOSSAN, 7153, main board industrial product group) are more significant.
On the contrary, companies that produce more rubber gloves, such as top gloves (TOPGLOV, 7113, motherboard industrial product group) and Speedmaster (SUPERMX, 7106, motherboard industrial product group), have lower impacts.
Stock picking strategy: Wanfa Guizong - profit for Wang Dahua Ji Xian research pointed out that no matter whether the international crude oil price is up and down, the bank's evaluation of the various sectors of the Malaysian stock market is still the main key to corporate profits.
Although Brent crude oil prices have risen to a high level of 75 to 80 US dollars per barrel, the profit transparency of local oil and gas stocks has yet to benefit.
The bank is also optimistic about oil and gas stocks with profitability transparency, profitability upgrades, and international competitiveness, and not relying on national oil engineering contracts.
The bank's top pick is Shiba Power (SERBADK, 5279, Main Board Trade Service Group), which is expected to be revalued for its international oil and gas industry contractors, especially with a project contract of over RM7 billion.
It is also optimistic about Amada (ARMADA, 5210, Main Board Trade Service Group) (target price is RM1 xian), as it is expected to help with its Kraken/Olombendo oil and gas facilities confirming more revenue in the first half of this year. Increase investor confidence in it.
The bank believes that Yunsheng Holdings (YINSON, 7293, Main Board Trading Group) (target price of RM4 40 cents) has the potential for long-term profitability.
UOB Kay Hian’s research suggests “selling†international shipping (target price of RM6 25 cents) and Baraka (BARAKAH, 7251, Main Board Trade Service Group), due to the emergence of profit risk.
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