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Hasnain Malik
Hasnain Malik
Strategy & Head of Equity Research @ Tellimer Research
8 January 2021
Tellimer Research
Published by Tellimer Research
Hasnain Malik
Hasnain Malik
Strategy & Head of Equity Research
Tellimer Research
8 January 2021
Published by Tellimer Research
Strategy Note / Global

Oil: The cheapest oil exporter equity markets

Hasnain Malik
Hasnain Malik
Strategy & Head of Equity Research @ Tellimer Research
8 January 2021
  • With oil price back to levels seen before Saudi-Russia spat, we compare equity and FX value in the fuel exporters in EM
  • In large EM, potential upside on FX rate in Russia more than compensates for its equity valuation premium to Saudi
  • In small EM and FM, Oman and UAE are the cheapest equity markets but Colombia and Ghana offer the most FX upside
Oil: The cheapest oil exporter equity markets
Hasnain Malik
Hasnain Malik
Strategy & Head of Equity Research @ Tellimer Research
8 January 2021
Tellimer Research
Published by Tellimer Research
Hasnain Malik
Hasnain Malik
Strategy & Head of Equity Research
Tellimer Research
8 January 2021
Published by Tellimer Research

Oil price is up 12% in the last month, up 45% since the end-October 2020 low, and back above the level in March 2020 prior to the Saudi-Russia market share battle.

Covid-19 second waves, the reliance on Saudi unilaterally shouldering the burden of marginal output restraint, and the fragile nature of Saudi-Russia cooperation tempers our optimism on oil relative to other commodities with secular demand drivers (eg copper, cobalt, lithium) beyond the post-Covid normalisation.

But the scale of this move in oil prices forces us to ask, where are the cheapest oil exporter equity markets in EM and FM?

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This report is independent investment research as contemplated by COBS 12.2 of the FCA Handbook and is a research recommendation under COBS 12.4 of the FCA Handbook. Where it is not technically a research recommendation because the subject of the research is not listed on any European exchange, it has nevertheless been treated as a research recommendation to ensure consistent treatment of all Tellimer's research. This report has been produced by the analyst(s) named above (the "Analyst").

The Analyst certifies that the views and forecasts expressed in this report accurately reflect their personal views about the subject, securities, or issuers specified herein. In addition, the Analyst certifies that no part of their compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed in this report.

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Tellimer Limited (FRN 920001) is an Appointed Representative of Met Facilities LLP (FRN 587084) which is authorised and regulated by the Financial Conduct Authority.
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