KTAM Focus : Queen Mining & King Energy

By..Natta Mahatana, CFA Assistant Managing Director
Investment Strategy and Customer Relations Department
Krung Thai Asset Management Co., Ltd.

27 EU Energy Minister “fail” Emergency meeting Sept. 9 failed to reach agreement to limit Russian gas prices It now accounts for 9% of the EU’s total imports (a huge drop from 40% before the Ukraine war), with countries heavily dependent on Russian fuels such as Hungary, Slovakia and Austria fearing Putin’s retaliation by closing pipelines. While many members want to limit the price of gas imports from all sources. But the EU Energy Commission is concerned that it will further exacerbate the shortage. The point of consensus appears to be only separating gas prices from wind, solar and nuclear formulas. As for the energy-saving policy, “compulsory” faces protests from Czech ministers. (Chairman of the meeting) who agreed to set a target of demand more “voluntarily” … Anyone who knows the news of the big protests on the energy crisis in the Czech Republic would understand.

cure inflation with money? The British government, led by new Prime Minister Liz Truss, has proposed an energy subsidy plan for households and businesses that might cost as much as £150 billion, combined with similar measures taken by Germany, Austria and other EU members. Into more than half a trillion dollars! Wealthy European politicians spend money on energy solutions to circumvent resistance at the expense of stability risks. Cramping huge budgets when inflation is high is like pouring gasoline on a fire. Policy once morest market mechanisms to maintain demand (No demand destruction), further dragging the inflation problem. ready to increase the debt burden in the high interest environment

Stimulative Hike The European Central Bank (ECB) raised interest rates by 0.75%, as expected, but was surprised to lift the two-tier system, requiring excess reserves deposited with the ECB to be lowered or charged), an incentive. Banks have “maintained” loans under the Targeted Longer-Term Refinancing Operations (TLTRO) liquidity injection to help the eurozone economy since the coronavirus crisis two years ago, with two years left to maturity). Repay the loan early, but when the ECB stops 2-tier, he doesn’t want to return it because the TLTRO interest burden is still very low. The money should be deposited back to the ECB in order to use the higher interest spread according to the policy rate in full, without sharing. class is better …this issue makes balance sheet size ECB does not decrease In line with the meeting results, which did not consider QT, therefore, “excess liquidity” flooded the eurozone further. Help support borrowing money for energy subsidies by European governments.

USD running out of stories? Jerome Powell, speaking in media post before the FOMC meeting Sept. 20-21, “no sign of recession”, reiterated that it will continue to raise interest rates once morest inflation until the work is done. Friday slipped below 109 and below last week, FedWatch Tool reflects this month’s rate hike, 75 bps has surpassed 90%, almost sure. USD looks like a “stories out”, coupled with risk on as hopes for the European economy to survive. break down The greater the demand for holding the dollar.

China’s inflation slows below expectations Aug data: CPI +2.5%YoY (expected 2.8%, Jul. 2.7%) PPI +2.3%YoY (expected 3.1%, Jul. 4.2%), allowing the PBOC to implement easing policies and government stimulus. the economy to the fullest

October has boosted oil and commodity prices. Market participants have begun to expect more optimism for China as the day of the mid-October leaders-election meeting nears, as the event might create a turning point to help unlock China’s economic policy flexibility. boost impulse aim to support growth It is a factor supporting both “Chinese stocks” and demand. In addition, the US Strategic Petroleum Reserve (SPR) emissions measure will end next month!

Commodities Supercycle The “commodities super cycle” is the most obvious theme among many of these factors.

Queen Mining & King Energy We picked 2 funds to take advantage of the uptrend in commodity prices.

KT-MINING Metal and Mining Industry Fund Invest in units of Allianz Global Metals and Mining (master fund), focusing on company stocks that generate sales and profits from the exploration, extraction or processing of natural resources such as nickel, copper, aluminum and other ores, steel, coal, precious metals such as gold. Platinum includes diamonds, salt and industrial minerals. China invests in infrastructure to support short- and medium-term demand Green Economy, EV drive long-term demand while supply cannot keep up

KT-ENERGY Invests in units of BGF World Energy (Master Fund) focusing on shares of leading global companies with core businesses in energy exploration, development, production and distribution. Therefore, it is suitable to take the opportunity and risk (exposure) from the trend of changing global energy prices with “oil” as the main character. with low cost and the Liquefied Natural Gas (LNG) business, which is growing high because it is seen as a bridge in the transition to new energy, etc.

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Disclaimer: personal opinion. not investment advice past performance It is not a guarantee of future performance. Understand product characteristics Return conditions investment guide and risks before making investment decisions