Walking with $65 Oil in 2018

Crude Brent has risen this year from USD44/bbl in June to current USD63/bbl. While this pales in comparison to the drop from USD115/bbl to USD45/bbl over June 2014 to January 2015, in percentage growth terms it is still a whopping rise of 43%.

After a day of talks in Vienna, OPEC and its allies outside the group agreed to maintain oil production cuts until the end of 2018. By keeping the 1.8 million barrels a day of cuts in place until the next review in June 2018, the oil producers aim to return stockpiles to their five-year average without overheating the market and eliciting a new flood of shale oil.

Although the economic impact is hard to gauge since it depends not only on the level but also on the duration of the oil price rise, we share what we believe to be the winners and losers if oil price were to average at $65/barrel in 2018 (Figure 1) as follows (for countries where unit trust funds have exposures)

Winners - Malaysia

Name EPF Islamic
Aberdeen Islamic Malaysia Equity A ✘ ✔
Affin Hwang Aiiman Equity ✘ ✔
Affin Hwang Aiiman Growth ✘ ✔
Affin Hwang Equity ✔ ✘
Affin Hwang Growth ✔ ✘
Affin Hwang Principled Growth ✔ ✘
Affin Hwang Select Dividend ✔ ✘
Affin Hwang Select Opportunity ✔ ✘
AmanahRaya Islamic Equity ✔ ✔
AMB Dana Yakin ✘ ✔
AMB Dividend Trust ✔ ✘
AMB Ethical Trust ✔ ✘
AMB Index-Linked Trust ✔ ✘
AMB Shariah Value Plus A-MYR ✔ ✔
AMB SmallCap Trust ✘ ✘
AMB Unit Trust ✔ ✘
AMB Value Trust A MYR ✔ ✘
AmDividend Income ✔ ✘
AmIslamic Growth ✔ ✔
AmIttikal ✔ ✔
AmMalaysia Equity ✘ ✘
AmTotal Return ✔ ✘
BIMB-Arabesque Malaysia Shariah-ESG Equity MYR ✔ ✔
BIMB i Dividend ✘ ✔
BIMB i Growth ✔ ✔
CIMB Islamic Al-Azzam Equity ✔ ✔
CIMB Islamic Equity Aggressive ✔ ✔
CIMB-Principal Equity Aggressive 3 ✘ ✘
CIMB-Principal Equity ✘ ✘
CIMB-Principal Equity Growth & Income ✔ ✘
CIMB-Principal Small Cap ✘ ✘
Eastspring Investments Islamic Small-Cap ✘ ✔
Eastspring Investments Dana al-Ilham ✘ ✔
Eastspring Investments Equity Income ✘ ✘
Eastspring Investments Growth ✘ ✘
Eastspring Investments MY Focus ✘ ✘
KAF Core Income ✘ ✘
KAF Dana Adib ✘ ✔
KAF Tactical ✘ ✘
KAF Vision ✘ ✘
Kenanga OA Inv-Kenanga Blue Chip ✔ ✘
Kenanga OA Inv-Kenanga Ekuiti Islam ✔ ✔
Kenanga Growth ✔ ✘
Kenanga OA Inv-Kenanga Growth Opportunities ✘ ✘
Kenanga Islamic ✘ ✔
Kenanga Malaysian Inc ✘ ✘
Kenanga Premier ✘ ✘
Kenanga OA Inv-Kenanga Shariah Growth Opps ✔ ✔
Kenanga Syariah Growth ✘ ✔
Libra Amanah Saham Wanita ✔ ✔
Libra DividendEXTRA ✘ ✘
Libra EquityEXTRA ✔ ✘
Manulife Equity Plus ✔ ✘
Manulife Shariah-Dana Ekuiti ✘ ✔
Maybank Q-Opportunities ✘ ✘
MIDF Amanah Dynamic ✘ ✘
MIDF Amanah Growth ✔ ✘
MIDF Amanah Islamic ✔ ✔
MIDF Amanah Strategic ✔ ✘
Pacific Dana Aman ✔ ✔
Pacific Dividend ✔ ✘
Pacific Millennium ✔ ✔
Pacific Pearl ✔ ✘
Pacific Millennium ✔ ✔
Pacific Premier ✔ ✘
Pacific Recovery ✔ ✘
Phillip Master Equity Growth ✘ ✘
PMB Dana Al-Aiman ✔ ✔
PMB Dana Bestari ✘ ✔
PMB Dana Mutiara ✘ ✔
PMB Shariah Index ✘ ✔
PMB Shariah Mid-Cap ✘ ✔
PMB Shariah Small-Cap ✘ ✔
RHB Capital ✘ ✘
RHB Dana Islam ✘ ✔
RHB Emerging Opportunity ✘ ✘
RHB Equity ✘ ✘
RHB KLCI Tracker ✔ ✘
RHB Malaysia DIVA ✔ ✘
RHB Malaysia Dividend ✔ ✘
RHB Small Cap Opportunity ✘ ✘
RHB Smart Treasure ✘ ✘
TA Comet ✔ ✘
TA Dana Fokus ✔ ✘
TA Growth ✘ ✘
TA High Growth ✘ ✘
TA Islamic ✘ ✔
TA Small Cap ✘ ✘

Winners - US

Name EPF Islamic
Franklin U.S. Opportunities MYR ✘ ✘
Manulife Investment U.S. Equity ✘ ✘
RHB US Focus Equity ✘ ✘
RHB-GS US Equity ✘ ✘

Neutral: Singapore, Hong Kong, Taiwan

Developed Western Europe

Name EPF Islamic
AmPan European Property Equities ✔ ✘
AmSchroders European Equity Alpha ✘ ✘
TA European Equity ✔ ✘

Losers

Indonesia, Thailand, Philippines

Name EPF Islamic
Affin Hwang ASEAN Flexi MYR ✘ ✘
AmASEAN Equity ✘ ✔
ASEAN Equity ✘ ✘
CIMB-Principal ASEAN Equity ✘ ✘
CIMB-Principal ASEAN Total Return USD ✘ ✘
Eastspring Investments ASEAN al-Adiil ✘ ✔
Kenanga Asean Tactical Total Return ✘ ✘
RHB Asean ✔ ✘
RHB Islamic Asean Megatrend B USD ✘ ✔
TA South East Asia Equity ✔ ✘
United ASEAN Discovery ✘ ✘

China

Name EPF Islamic
RHB Big Cap China Enterprise ✘ ✘
Affin Hwang World Series - China Growth USD ✘ ✘
Pacific Focus China ✘ ✘
Manulife Investment Greater China ✘ ✘
CIMB-Principal Greater China Equity ✔ ✘
Eastspring Investments Dinasti Equity ✔ ✔
Manulife China Equity ✘ ✘
Manulife Dragon Growth USD ✘ ✘

India

Name EPF Islamic
Manulife India Equity ✘ ✘

Japan

Name EPF Islamic
Affin Hwang World Series - Japan Growth ✘ ✘
Eastspring Investments Japan Dynamic MY-JPY ✘ ✘

Figure 1 OPEC Inventory adjustment and Oil Prices

Source: EIA, Bloomberg, complied by PMB