Jeffrey -
Have you looked at China Gas (384.HK)? Consider tactical position - long
equity - on potential for a Russia/China nat gas agreement.
Gazprom (GAZP.RX, ruble denominated shares) is likely the more common
implementation (both charts below). would argue that the new pipeline diverts
existing supply for Gazprom, where it is incremental earnings growth for the
likes of China Gas.
http://www.reuters.com/article/2014/04/09/russia-china-gas-iduSL6NON11XM20140409
The original call is on The 3rd Plenum's commitment to environmental reform
(specifically reduction of carbon emissions by increasing nat gas usage). The
near-term catalyst stems from this week's developments in the ukranian-Russian
crisis. Not surprisingly, with the chill from the western world threatening
demand for Russia's commodity, Putin's accelerated conversations to the east.
Market chatter suggests that negotiations on a Russia-china pipeline could
divert 38bn cubic meters of gas per year over to china, and that Putin has
sped up negotiations with the intent of turning his presently scheduled May 20
visit to China, into a signing ceremony for an export contract.
The stock is a hedge fund name. The DB analyst has been less fond (latest
rating is hold with a 9 HKD target). I think this is a tactical,
geopolitically-driven entry point on a name that's also a compelling long-term
growth investment. Right now it's trading close to 25x 2015 EPS ests of 0.50
HKD, bull case is meaningful upside potential in earnings on an uptake of nat
gas in China.
China Gas (384 HK is fairly liquid - -5mm share avg daily volume over the last
month)
Tazia
China Gas lyr Price History
(Embedded image moved to file: picOSS49.gif)
Gazprom lyr Price History
(Embedded image moved to file: pic16859.gif)
Forwarded by Tazia smith/db/dbcom on 04/16/2014 09:16 AM
From: Pierluigi Amicarella/db/swiss/dbcom@dbcom
To:
Date: 04/16/2014 05:55 AM
subject: European oil [I)
For non advisory clients only
In a "sector rotating" market in favour of value large cap names Oil could
be a relative bet to take, as the sector is:
1) not expensive in terms of valuations
2) favoured by the upper trending of WTI and Brent prices
3) impacted by better capital discipline (capex) expectations
Lucas Herrmann, DB research on ROE trend is starting to be more optimistic as
well:
"central to the deterioration in return on capital at the integrated oils has
been the balance sheet build of non-productive capital. At the super-majors
alone, the addition over a decade of c.S250bn of work in progress and
exploration assets has proven a material drag on sector profitability clipping
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