2020 set new long-term trends. The corona crisis has accelerated the growth of the e-commerce market. Developed countries are even more active began to abandon coal in favor of gas. In Russia, large companies have begun to develop their own ecosystems.
Where to invest money in 2021to make money, protect your portfolio and still be on the wave?
Due to lockdowns, warm winters and overfilling of storage facilities in Europe in the first half of 2020, natural gas prices have renewed their five-year low. But in the second half of the year, demand began to recover around the world, which led to an increase in energy prices.
Europe is using up its gas reserves: the storage capacity has decreased from 95% to 75%. Gas prices rose 70% from July lows by the end of the year.
The demand for LNG is also growing, especially in Asia. China is actively increasing imports of liquefied gas: in July, imports increased by 11.2% y / y. LNG prices in Asia in the second half of 2020 increased sixfold.
The growth in demand and prices for natural and liquefied gas may continue in 2021. On the first trading day of the year, natural gas rose in price by 5%.
This will allow gas companies to earn more and shareholders to receive more dividends. Who to look at in 2021 on the gas market:
- Gazprom – the company can complete the construction of Nord Stream 2 as early as 2021 and plans to increase gas supplies to Europe, as well as gain a foothold in the fast-growing Chinese market.
- NOVATEK benefits from rising LNG demand and prices. Its consumption will double by 2030.
At the beginning of 2020, oil prices fell 77% due to the collapse of the OPEC + deal and a drop in demand. But now prices are rising, and demand will fully recover after the rolldown of lockdowns, which will support oil stocks in 2021.
The most interesting representatives of the sector:
- Gazprom Neft – Potential Sale of Shares Will Increase Free Float. This will allow the company to get into the indices and attract money from passive investment funds. In addition, the company is increasing oil production and developing gas production.
- Tatneft – the company’s shares fell more than others in 2020. At the same time, Tatneft’s management promised to pay all free cash flow in dividends. If oil prices recover, the company will be able to please shareholders again.
- ExxonMobil and Chevron are US oil workers benefiting from market recovery. Their securities are traded in rubles on the Moscow Exchange, so it is easier for an individual to invest in them: there is no need to register with a foreign broker or obtain the status of a qualified investor for trading on foreign exchanges.
In order to be more likely to receive income in the US market, it is better to buy shares on a correction. The US market has grown strongly after the crisis due to the easing of the Fed’s policy, but there is no incentive to continue growth: there is nowhere to soften the monetary policy, and cyclical companies have already reacted to the information about vaccinations.
Food retail is a defensive sector. The pandemic has shown that consumers are not cutting down on food spending by purchasing for future use.
In addition, food retail is an understandable sector for a retail investor who is more likely to invest in the grocery store chain they visit every day than in an oil refinery company.
- X5 Retail Group is one of the leaders in food retail, whose shares may rise in 2021. The company is actively developing online trading, and its management is interested in increasing capitalization.
The level of electricity consumption falls slightly during the crisis and quickly recovers as the economy develops. In 2020, energy consumption has been declining for 11 months compared to the corresponding period last year. But consumption rose in December due to frost.
In 2021, the Ministry of Energy expects an increase in energy consumption due to a cold winter and an increase in oil production.
Power sector stocks:
- Inter RAO is the fastest growing company in the sector. Investments in Vostok Oil and a joint venture with General Electric will increase profits by 2.5 times over 10 years.
- Rosseti – the company’s management is working to cut costs and increase capitalization to 1 trillion rubles. Consolidation with subsidiaries can lead to trillions of capitalization.
Ecosystem is a platform for various services that are provided by one company. Once in the ecosystem, the client can only use its services to cover basic needs.
Ecosystems are one of the main global trends, and Russia is successfully keeping pace with it. Digital services of some Russian companies are outperforming American and European counterparts.
Where to invest money to invest in ecosystems:
- “Sberbank” from Sberbank – in 2020, the revenue of non-financial services amounted to 70 billion rubles, and from 2021 it will continue to grow by 100% per year. Sberbank’s ecosystem capitalization may grow to $ 41 billion.
- MTS – management initiatives for development: telecommunications, fintech, media and entertainment, cloud services. The main goal of the company is to build an ecosystem and improve digital media services. MTS cooperates with Channel One, develops 5G, and attracts clients to its bank.
- Yandex – the company is also actively developing in this direction, forming partnerships with systems that are required to fully capture the services provided. News of Yandex’s purchase of Tinkoff Bank strongly influenced the share price. News about the expansion of the Yandex ecosystem will have a positive effect on the quotes of its securities.
When collecting a long-term portfolio, do not forget about its diversification, that is, invest in various assets. Also remember about the risks: the return on the stock market is not guaranteed, there is always the possibility of getting a loss.