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FTSE is uninvestable due to energy

  • 13-03-2020 7:44pm
    #1
    Registered Users Posts: 12,289 ✭✭✭✭ Mad_maxx


    The absolute decimation of energy stocks has laid bare how badly things look going forward for Europe's premiere equity market, BP and Shell are at twenty year lows, much lower than the lows of 2008 and 2009

    Energy is becoming less and less important to investment managers, when you add in the heavy weighting of financials in the FTSE 100, even the likes of the city of London investment Trust is looking untouchable


Comments

  • Registered Users Posts: 215 ✭✭ Coil Kilcrea


    I'm not given to conspiracy theories but I do sense there'll be financial payback for Brexit.


  • Registered Users Posts: 12,289 ✭✭✭✭ Mad_maxx


    I'm not given to conspiracy theories but I do sense there'll be financial payback for Brexit.

    More to do with the future changes which will be felt as a result of climate change policy

    Energy companies up until the tech boom of the mid nineties onwards were always the world's largest companies, beit ExxonMobil in the usa or shell in Europe, energy is relatively unimportant today in the U. S market, it's hugely important in the FTSE and that's the problem


  • Moderators, Business & Finance Moderators Posts: 7,818 Mod ✭✭✭✭ Jim2007


    I'm not given to conspiracy theories but I do sense there'll be financial payback for Brexit.

    You don’t need any conspiracy theories! Without access to the EU, London looses it’s advantage over NY or Singapore. There is about $50b of corporate debt to be refinanced over the next 5 to 7 years. Much of it used to go via London but not this time, there is no point in going to London, when you’re going to have to go to Paris or Frankfurt as well.

    And now that the EU has ruled that Irish qualifications held by British citizens, resident in the UK will not be recognized, they’ll struggle to even draft and submit basic documentation in support of such work.

    You can expect that in the end all the high risk silly bugger stuff will end up there because no one else wants it and it will be the only stuff willing to go there. A great future surprise for the British tax payer!

    Now if you could identify a REIT with a large concentration of office property in Paris or London it might do very well at the right price.


  • Registered Users Posts: 4,881 ✭✭✭ TimeToShine


    I think the energy companies are great value at the moment, the oil price war between the Saudis and the Russians won't go on forever and as soon as there's a whiff of compromise (which there always is in the end) they'll rocket straight back up.


  • Registered Users Posts: 12,289 ✭✭✭✭ Mad_maxx


    I think the energy companies are great value at the moment, the oil price war between the Saudis and the Russians won't go on forever and as soon as there's a whiff of compromise (which there always is in the end) they'll rocket straight back up.

    I expect them to regain ground but doubt they gain anymore than other sectors, even in "normal" times this past decade, they have been pretty terrible


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  • Registered Users Posts: 4,881 ✭✭✭ TimeToShine


    Mad_maxx wrote: »
    I expect them to regain ground but doubt they gain anymore than other sectors, even in "normal" times this past decade, they have been pretty terrible

    Look at Shell's stock price over the past 6 months.


  • Registered Users Posts: 12,289 ✭✭✭✭ Mad_maxx


    Look at Shell's stock price over the past 6 months.

    I have, a horror show


  • Registered Users Posts: 8,749 ✭✭✭ Shedite27


    I think the energy companies are great value at the moment, the oil price war between the Saudis and the Russians won't go on forever and as soon as there's a whiff of compromise (which there always is in the end) they'll rocket straight back up.

    Just posted same in another thread. The Saudis/Putin could sort out their quarrel in an instant and bump the price of those companies (Apache down from $24 to $8 recently is my choice). Longer term, Oil is a problem obviously but should be a positive in the next year anyway


  • Registered Users Posts: 10,928 ✭✭✭✭ phantom_lord


    I'd be more concerned about their herd approach. If they stick with that the UK will be a basket case. And possibly cut off from the rest of the world.


  • Registered Users Posts: 4,881 ✭✭✭ TimeToShine


    Shell and BP up over 20% today.


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