The bulk continues to rise! Are other cyclical assets still bullish?

Entering 2022, in the context of the sharp decline in large categories of global assets, commodities have an eye-catching performance!

According to statistics, since the beginning of this year, the Wenhua Commodity Index has risen 6.55%, iron ore more than 20%, rebar 11.91%, glass 30%, aluminum, zinc and other non-ferrous metals up 5%. For agricultural products, palm oil is up 16%. Soybean oil is up 12%, and soybeans and soybean meal are up more than 5%.

In this context, what are the investment opportunities for the relevant cyclical sectors? In this regard, investment institutions issued the latest point of view.

Xingshi Investment:A very simple example, when you do not believe that the price rise of these commodities is sustainable, it is generally sustainable, but when you believe it is sustainable, it is generally not sustainable, which is the principle behind it.

Because you believe it will be sustainable, that means it will take some action on supply to increase capital expenditure and expand capacity. After expanding production capacity, supply will be formed for a certain period of time in the future, and prices will naturally fall. If we do not believe it all the time, there will be no action. Only a sharp decline in demand can bring prices down. If demand is stable, it will be very difficult for prices to go down without an increase in supply.

Corresponding to stocks, we think that most cyclical industries will be more difficult to invest, such as domestic steel and coal, including cement chemicals, will have some changes this year. The country is in a strong guarantee of supply, the supply will be more abundant than last year, so its price increase is less than last year, but there will be periodic repair opportunities.

To sum up, there are four types of investment opportunities in the 2022 cycle sector:firstly, opportunities based on changes in hydro power policy, such as stable growth, construction, building materials, real estate and other major infrastructure investment sectors. Secondly, the chemical and petrochemical industries caused by policy changes. As more new projects are approved in these industries, the growth of their stocks will be highlighted. Thirdly, the supply and demand of their own industry is constantly improving electrolytic aluminum and refining and chemical industry. Fourthly, enterprises with the ability to transform, mainly concentrated in the power and coal industries.