Ahead of FY2021 results season, I pick the following as having substantial upside becos their results will be strong:
1. REX -- oil price up, expanded production capacity.
2. Geo Energy -- coal price up, and futures are very strong. Hope FY21 final dividend will be amazing
3. Jiutian Chemical -- selling prices have been strong, margins on the uptrend as raw material input cost has not kept up.
Rex is the No.1 play on oil price boom, now that oil price has breached US$90 a barrel. Rex will have great improvement in operating margins.Oil is not going to get cheap anytime soon. The big picture is there has been underinvestment in the sector, especially exploration. Every greenie has thrown his weight to cause a downgrade in oil investment in favour of cleaner energy.
Iron ore in 2021 was a roller coaster with high highs and then a plunge because China cut back on its demand. We are well into 2022 and iron ore prices are gaining steam! From US$85/t in Nov 2021 to US$140 / t currently.
Fortress Minerals & Southern Alliance Minerals are the iron ore plays on SGX.
In early March 2022, Brent crude oil prices soared past US$130 a barrel for the first time since July 2008, on the outbreak of the Russia-Ukraine conflict. The bulk of the world’s transportation modes remain powered by fossil fuels and the transition to renewables will take some time.Underinvestment in fossil fuel production in recent years in light of the global push toward clean energy, sanctions of Russian oil by the US and the European Union, as well as recent Covid-19 shutdowns in China will contribute to the continuing volatility of oil prices. The Company believes that Brent oil prices will likely be higher than in 2021.