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

India

Name EPF Islamic
Manulife India Equity

Figure 1 OPEC Inventory adjustment and Oil Prices

Source: EIA, Bloomberg, complied by PMB