New Saudi Oil Minister, Old Saudi Oil Policy

EM PM, Ecstrat

Emad Mostaque

EM PM

Ecstrat

Ecstrat is a consultancy advising on asset allocation between global equity markets, with a focus on the intersection of governments, geopolitics, governance and markets.
 
Over the past few years and more especially since the Great Financial Crisis (GFC), investors have become more focused on short-term market movements and real-time returns and have consequently neglected the analysis of the underlying structural themes that underpin longer term performance.
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More specifically we believe that the evolution of governance-based relationships between investors, controlling shareholders, labour and the state is one of the primary determinants of both relative and absolute performance between individual equity markets.
 
We will endeavour to provide investors with some of the context surrounding governance-related issues which encompass many different disciplines including history, economics and political science, as well as the financial metrics which are the most obvious manifestation of the structural characteristics of each market.
 
We will pay particular attention to the shifts and potential inflection points for governance in individual markets as these are often the best lead indicators for both economic and market performance.

Thematic (Sector/Industry)

Saudi arabia Energy / Thematic (Sector/Industry)

It has been an interesting few weeks for observers of Saudi Arabia as Doha oil freeze talks failed, concerns re-emerged over the stability of the Saudi-US relationship and months of press coverage culminated in the announcement of Saudi Vision 2030 today.This note analyses some of the drivers of the changes we have seen in Saudi policy and the likely impact of these going forward on local markets and the oil price.The upshot is that I am, just as was the case in 2015, once more bearish on oil and oil-related equities into summer, although I retain my bullish view longer term.This should also prevent significant appreciation in Middle East markets short-term, although it is likely to be an interesting few years ahead as reforms, many of which necessitate increased economic and market liberalization and sharp increases in FDI, start to come in force.

It has been an interesting few weeks for observers of Saudi Arabia as Doha oil freeze talks failed, concerns re-emerged over the stability of the Saudi-US relationship and months of press coverage culminated in the announcement of Saudi Vision 2030 today.This note analyses some of the drivers of the changes we have seen in Saudi policy and the likely impact of these going forward on local markets and the oil price.The upshot is that I am, just as was the case in 2015, once more bearish on oil and oil-related equities into summer, although I retain my bullish view longer term.This should also prevent significant appreciation in Middle East markets short-term, although it is likely to be an interesting few years ahead as reforms, many of which necessitate increased economic and market liberalization and sharp increases in FDI, start to come in force. 

Qinghai Jinrui Mineral Developmnt (600714 CH)

Sichuan Renzhi Oilfield Technology Se (002629 CH)

Shanxi Meijin Energy Co, Ltd. (000723 CH)

Xinjiang Zhundong Petroleum Tech (002207 CH)

Inner Mongolia PingZhuang Energy Resources (000780 CH)

Inner Mongolia PingZhuang Energy Resources

Huolinhe Opencut Coal Ind Corp Ltd. (002128 CH)

Chu Kong Ptrlm&Ntrl Gs Stl Pipe Hldg (1938 HK)

Zhejiang Kingland Pipeline And Tech Co (002443 CH)

Beijing Haohua Energy Resource (601101 CH)

China Oil Hbp Science&Technology (002554 CH)

Shanxi Lu'An Environmental Energy Dev.Co (601699 CH)

Shandong Sunway Petrochmcl Engg (002469 CH)

Mangalore Refinery and Petrochemicals Limited (MRPL IN)

Mangalore Refinery and Petrochemicals Limited

Inner Mongolia Yitai Coal Company Ltd (3948 HK)

Zhongyuan Special Steel Co,Ltd. (002423 CH)

Lianyungang Huanghai Machinery (002680 CH)

Jikai Equipment Manufacturing (002691 CH)

Taiyuan Coal Gasification Company, (000968 CH)

Gansu Jngyn Coal Inds & Elctr Pwr (000552 CH)

Shenzhen Guangju Energy Co, Ltd. (000096 CH)

Xinjiang International Industry Co., (000159 CH)

Rabigh Refining And Petrochemical Company (PETROR AB)

Rabigh Refining And Petrochemical Company

Saudi: A New Hope?