BIZ BUZZ: Winners from $100 oil?
Oil staying above $100 a barrel spells trouble for an energy-importing economy like the Philippines—but a handful of listed companies could find a silver lining.
COL Financial chief equity strategist April Lynn Tan said exporters could benefit from a weaker peso since they earn in dollars. But she sees coal miners as among the more direct potential winners.
As oil becomes more expensive, prices of substitute fossil fuels such as coal could also rise. Higher fuel costs could likewise encourage some users to shift from diesel to coal, potentially coal prices and demand rises.
That is seen to put Semirara Mining and Power Corp. and parent DMCI Holdings Inc. in a potentially favorable position.
There is a catch, however.
“Even though it should benefit, theoretically, from higher oil prices, the stock may not go up because investors are worried about it losing its coal operating contract,” Tan said.
DMCI and Semirara last traded at P8.29 and P17.50 per share, respectively, both up more than 1 percent.
So while $100-plus per barrel oil price is hardly good news for the Philippines, some companies could still emerge as beneficiaries—provided their own company-specific risks don’t get in the way.
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