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Local sentiment and stock price impact: The commodity stocks in EMs

Synopsis: The ongoing Russia-Ukraine war has had a deep impact on the global markets. While equities have tumbled, by far, the most affected are commodities. EMAlpha looked at the stock price of three very different EM commodity plays to see how they have fared since January end vis-à-vis their EMAlpha local sentiment score. The stock price of Shanghai Petrochemical (Sinopec Shanghai Petrochemical Company Limited) has been remarkably resilient and there has been a big improvement in the stock sentiment. ONGC (Oil & Natural Gas Corporation Limited) is a government-owned entity and is the dominant contributor to oil production in India, which has forever been an oil deficit economy. Since it is government-owned, the prevailing fear is that the government could ask the company to share the burden of an inflated oil bill, as has happened in the past. This is reflected in the stock price as well. Lastly, EMAlpha looked at Vale: the most interesting of the three. The Brazilian metals and mining behemoth has an almost perfect correlation between a sharply improved sentiment on the EMAlpha local sentiment score and its stock price movement.

The Covid-19 Induced Global Chip Shortage

When Covid-19 hit the world in early 2020, a pall of gloom hung over the global economy and uncertainty ruled the day. The future was pretty much unchartered and countries and companies around the globe started swinging in the dark. The current chip shortage is the result of the unexpected ways in which the global industries’ demand has played out for the chips.

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