Page 10 - AfrElec Week 46 2022

AfrElec INVESTMENT AfrElec

Coronation cashes in on

Europe’s energy crisis

SOUTH AFRICA A top equity investor, Coronation Fund Manag- liquefied natural gas markets in the next five
ers (Coronation), has made a return on invest- years as Europe “scrambles to meet its energy
ment of 20% so far in 2022, benefitting from needs”, Bloomberg cited a recent commentary
investments it made in companies strategically the managers wrote.
placed to capitalise on Europe’s energy crisis, “The world has been very aggressive in trying
Bloomberg reports. to cancel energy supply without really canceling
In raking in the high returns, the South Afri- energy demand,” Stein said in a separate inter-
ca-based fund beat all but one of the 440 funds in view last week. “Energy transitions happen over
Africa and the Middle East that the news agency decades,” with heavy industry reliant on coal, oil
has tracked, it reported on November 16. and gas. “It’s not easy to switch it off very quickly.”
Coronation’s gains compare with a 16% Add to that an under-investment in the supply
slump in the S&P 500 Index and an even steeper base and “demand is stickier than one thinks,”
drop in emerging-market stocks. he said.
Rising prices of coal and other commodi- Coronation foresees muted demand for
ties after Russia invaded Ukraine in February gold and iron ore. While rising coal demand in
2022 boosted shares in commodities multina- Europe has driven sales and revenues, Stein and
tional Glencore and South African miner Exx- Hops think the thermal fuel’s price looks unsus-
aro Resources, among key holdings for the Cape tainable but oil is attractive.
Town-based fund that oversees about $33bn in On platinum group metals (PGMs) they pro-
assets. ject a good pricing environment likely over the
In the last quarter, Coronation co-managers next five years.
Nicholas Stein and Nicholas Hops bought shares “It’s after years where we start getting a little
in oil and gas producers, New York-listed EOG nervous, where electric vehicles really start to
Resources and ASX-quoted Woodside Energy. ramp and what that means for demand for com-
Thet have a “very positive” view on global bustion engines,” they wrote.™

P10 www. NEWSBASE .com Week 46 16•November•2022