Geopolitical conflicts continue, and the Guotai (561360) Oil ETF surged over 2.6%, with the market focusing on the impact of rising oil price benchmarks.

Geopolitical conflicts have continued, and on April 1, the Cathay Oil ETF (561360) surged by more than 2.6%, with the market focusing on the impact of an upward shift in the oil-price midline.

According to Guotai Junan Securities, due to the ongoing blockade of the strait caused by geopolitical tensions, the oil-price midline may be somewhat elevated, and it is maintained at a high level. With high oil prices, the energy arbitrage space for coal-to-chemical, natural gas chemical industry, and chlor-alkali will expand significantly. In the agrochemical chain, as domestic and overseas cultivated areas continue to increase, demand on the fertilizer side will maintain steady growth; meanwhile, higher penetration of genetically modified crops supports long-term upward agricultural pesticide demand. The upward shift of the oil-price midline also supports higher crop prices. After the CAC Agrochemical Exhibition, most pesticide products saw a wave of broad-based price increases. At present, many products have entered a state of scarce supply, and the price increase in this round may exceed expectations. In addition, under geopolitical shocks, overseas competitiveness further declined, with ChemChina pricing globally; specific sectors such as methionine and vitamins benefit. Some sub-industries have already passed the peak in capital expenditure, and the industry landscape has been significantly optimized.

The Cathay Oil ETF (561360) tracks the Oil & Gas Industry Index (H30198). This index covers companies in areas including oil and gas exploration, production, refining, and related services. The constituent stocks mainly consist of representative companies in the energy sector, to reflect the overall performance of securities of publicly listed companies related to the oil and gas industry. The industry allocation is concentrated in upstream resource development and midstream refining and chemical processing, with a style that leans toward value and cyclical characteristics.

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Daily Economic News

(Editor: Dong Pingping)

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