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<Research>UBS Expects Energy Prices to Remain Elevated for Longer, Oil Prices May Reach US$130/ Barrel
Recommend 40 Positive 59 Negative 40 |
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China’s stock market has recently experienced volatility due to the closure of the Strait of Hormuz, UBS released a research report saying. Over the past month or so, the correlation between China’s equity market and the MSCI AC World has risen from a historical average of 0.6 to 0.8 in recent months. The broker believed that, even if the strait reopens, energy prices may remain elevated for a longer period. UBS is edging closer to a downside scenario, assuming the disruption persists through the end of April. In this scenario, oil prices could reach US$130 per barrel, potentially causing the S&P 500 to decline by 10-12%. UBS downgraded consumer and property sectors to Underweight, given higher inflation will limit room for further interest rate cuts. The broker added that, Chinese oil producers would benefit if oil prices remain high. UBS estimated that the average pricing of Chinese oils reflects an oil price of US$65 per barrel, significantly lower than the broker’s forecast of US$90-100 per barrel. The table below shows UBS' ratings and target prices for preferred stocks: Stock | Rating | Target Price JD-SW (09618.HK) | Buy | $187 BIDU-SW (09888.HK) | Buy | $165 FUYAO GLASS (03606.HK) | Buy | $93 HUATAI SECURITIES (601688.SH) | Buy | RMB27.36 ZIJIN MINING (02899.HK) | Buy | $60 NAURA (002371.SZ) | Buy | RMB570 TENCENT (00700.HK) | Buy | $780 GDS Holdings (GDS.US) | Buy | US$62 CATL (300750.SZ) | Buy | RMB500 SYTECH (600183.SH) | Buy | RMB85 DONGFANG ELEC (01072.HK) | Buy | $68 ENVICOOL(002837.SZ) | Buy | RMB160 CNOOC (00883.HK) | Buy | $37.8 BYD COMPANY (01211.HK) | Buy | $128 WUXI APPTEC (02359.HK) | Buy | $154 TIANSHAN ALUMINUM (002532.SZ) | Buy | RMB23 MUYUAN (002714.SZ) | Buy | RMB60.3 ORIENT WIRES & CABLES (603606.SH) | Buy | RMB78 STL (002648.SZ) | Buy | RMB36.8 ZIJIN GOLD INTL (02259.HK) | Buy | $297 KEDALI (002850.SZ) | Buy | RMB268 Auto-translated by AI AASTOCKS Financial News |
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