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Certain Sectors To Benefit BIG In The Future, Says Credit Suisse

Joe Samuel

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stock market trends credit suisse may

Due to changes at the global level like protectionism and political chaos, businesses are facing certain changes and ongoing challenges. Nevertheless, there’s always a way for a business to survive despite the changes and challenges. Having said this, the business world is never short of ways to fly high. This also holds true for the stock market.

New opportunities were revealed at the Credit Suisse (CS) Global Super Trends Conference. Nannette Hechler and Daniel Rupli, Head of Economics and Research & Head of Single Security Research respectively, looking at impactful societal changes. They feel these can bring huge advancements in the investment field.

Various banks say that the “Millennials tide” has begun. This tide will drive the crowd of young people age 39 and below. Reports explain that they are dedicated to drafting the future of businesses. So, what sectors should you be paying attention to right now according to Credit Suisse?

Stock Market Sectors Affected By This:

Security and Defense Stocks

It will give a hike in security and defense investments as this sector holds more importance in things like public security. Further, terrorism and technology threats and the geopolitical situations of Syria and China are the centers of concern for the world.

Another area which is affected is the introduction of the hypersonic missile system and massive data breach in Russia that is a pressure point for countries like the US. Also, the increasing concern against terrorism in the USA is focusing more on defense investments. Similarly, defense security for privacy is also much needed. Hence, cybersecurity is extremely important.

Read More: This New Technology Could Transform A Multi-Billion-Dollar Industry

The market opportunity continues to expand. The Weapons Detection Systems market will grow from $5.3B in 2020 to USD $7.5B by 2025, at a Compound Annual Growth Rate (CAGR) of 8.2%. By 2020, USD $1.5B will be spent on urban security in North America.

An Atlanta-based startup backed by a wealthy Canadian is preparing to market a security system developed by MIT Lincoln Labs that could detect public shooters before they fire. For those looking at companies in this sector, for instance, MIT has licensed the technology exclusively to Liberty Defense to bring it to market. Liberty Defense (SCAN.V) is ready to tackle the security challenges in the urban security market with its groundbreaking HEXWAVE product. Click Here To Read More On This Major Breakthrough!

Clean Energy Stocks

Due to awareness and pressure by the public, the government will focus on investing in the creation of renewable energies.

Credit Suisse report says that many electricity companies are on the way to inculcate these changes. And even the bank is asking the large producers to make solar and wind energy for the projects of renewable energy. Such moves will bring huge profit without any recurring in-out charges.

According to the reports. It is quite sad to know that there is still a lacuna of this awareness in Europe Transport &infrastructure

Credit report says that transport sectors have a bright business future. One of the greatest examples of this is the Thailand Airport. Due to the high numbers of passenger crowd for the last 10 years, it has gained a triple profit. Another example is Vinci. It has grown impressively by acquiring Gatwick Airport and now it is planning to acquire Aeroports de Paris.

Read More: Relation Between the Solar Energy Stock Sector & Interest Rate

In the context of infrastructure also, the world is heading forward.  G-20 projects are the best example of this growth. It is estimated that by 2040, $14.8 trillion will be invested. Even the US and China are planning for a combined trade in infrastructure.

Following this growth, the Federal Reserve of America would slow down the interest rate benefiting the companies investing. MSCI World Infrastructure Index mentioned a profit hike by 9.97% by 29th March. Sectors like utilities, telecommunications, Airport, etc. were included in this index.

5G Stocks

Credit Suisse says 5G technology will also see growth. As we can see, South Korea’s introduction of commercial 5G at the end of the last year and the USA also headed towards better internet speed. Next, Japan, China, and Europe are expected to be in this run, most likely after 2020.

After such introductions, the dealers of 5G networks are expecting to see a hike in their profit. Huge investments are awaiting as people will keep on modifying this sector.

The report says, Telecom Italia & Vodafone Italia will enter into an agreement for 5G network sharing and in such case, more towers and bandwidth installments will hike investments.

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Energy

Relation Between the Solar Energy Stock Sector & Interest Rate

Joe Samuel

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solar energy stocks

Solar Energy Stocks

For many years, the clamor for alternative sources of energy had been at a fever pitch. Solar energy remains one of the energy variants that has come up by leaps and bounds. However, one of the big reasons why it has not been able to go truly mainstream is two-fold.

It is due to the huge capital costs involved and the fact that the return on investment might show up decades later. Hence, the prevalent lower interests could be the big push that could prove to be a huge blessing for the industry.

Interest Rates

The slow rate of economic growth in the United States over recent years has made the Federal Reserve quite generous with regard to interest rates. The Federal Reserve has halted interest rate increases. That has proven to be a boon for investors who wish to invest in the solar power industry.

So, if solar energy companies are able to get the required financed at the going rate on long term loans, then the total cost of a highly expensive project can be lowered significantly. Therein lies the big opportunity for the industry.

Cheap capital is possibly the biggest boost for any company. But for a high capital intensive industry like solar energy generation, it can be a lifetime opportunity.

Solar Power Stocks to Watch

Now, if the industry does manage to take advantage of this situation with interest rates, then it goes without saying that certain solar energy stocks are going to be in sharp focus. A few companies which are all set to be at the forefront are Sunrun (RUN) and Vivint Solar (VSLR).

The three companies in question are involved in the installation of solar systems and financing, which will directly make them one of the biggest beneficiaries of the current situation. Other important stocks include SunPower (SPWR) and First Solar (FSLR). Which solar power stocks are on your watchlist?

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Energy

Saudi’s Minister Has No Plans To Boost Oil Production After Iran Oil Waivers End

Jon Phillip

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oil and gas news

On Wednesday, Saudi Arabia’s Energy minister Khalid al-Falih said that there was no need to immediately increase oil output. This followed the ending of waivers granted by the US to Iranian crude oil buyers. He added that Saudi Arabia will only respond to increase oil output if there is an increase in demand.

The Decision Not To Increase Output Based On Market Fundamentals

The minister said that his decision was based on oil market fundamentals rather than prices and that they still remain focused on stabilizing the global oil market.  Speaking in Riyadh, Falih said that despite the rising of inventories as a result of sanctions on Iran and the situation in Venezuela it was not necessary to have an immediate response to increase oil output.

Last year the US granted Iranian oil buyers exemptions from sanctions but it has tightened the line by deciding not to renew them.  Saudi Arabia intends to remain within its OPEC production limit as well as be intent to its customers. More so those under waivers and those that have seen their waivers withdrawn. 

The minister said that they are not going to pre-empt the same and increase their output. Oil production number for May are set. It had little variations from previous months. Furthermore, crude oil allocations for June will be decided next month.

Oil Prices Have Been Increasing Since November

Since November, Oil prices have increased. This follows the announcement by the US that all waivers on imports of Iranian oil will not be renewed to put pressure on buyers to stop buying oil, from Iran. This ends up tightening global oil supply. 

On Wednesday, Brent Crude futures dropped to trade at $74.18 per barrel. This followed a statement from the International Energy Agency. This indicates that markets are adequately supplied and global production is stable.

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Energy

Solar Energy Sector On A Roll After Improved Market Outlook

Jon Phillip

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solar energy stocks

Solar energy stocks have taken the markets by storm in what is turning out to be a breakout year after a long stretch of underperformance. The stocks are up by an average of 40% on improved market sentiment. This is a result of enhanced performance as well as projections for long-term growth.

Growing Solar Demand

Some of the energy stocks providing greater exposure to the expanding sector include SunPower Corporation (SPWR), First Solar, Inc.(FSLR), Sunrun Inc. (RUN) and JinkoSolar Holding Co., Ltd. (JKS).

With solar installations in 2019 set to make record highs of 141GW the companies look set to generate significant profits. This is in light of the fact that installations were 109 GW in 2018. Solar energy generation is poised to improve from 260,000MWh/d as of last year to 290,000MWh/d [1] in 2019 according to the US Department of Energy

Demand for solar panels is not only strong in the U.S but also in some of the biggest economies in the world. China is one of the markets where demand for solar panels looks set to continue supporting solar companies. Saudi Arabia, India, and Chile are other markets where demand for solar panels is also on the rise.

Growing demand for solar panels could result in a spike in profits for the likes of First Solar, SunPower, and JinkoSolar. These companies account for most of the orders. As the industry expands, price pressure should subside as large companies will be able to leverage economies of scale.

Solar Panel Differentiation

First Solar has moved to strengthen its competitive edge in pursuit of more orders by unveiling Series 6 technology, capable of lowering costs and squeezing in more power on every solar panel.  SunPower, on its part, has expanded to A-series production. The company aims at improving the panel’s efficiency by 22%.

JinkoSolar has strengthened its edge in the Chinese market by upgrading its cell capacity. Jinko is producing PERC technology panels that are more efficient than other technologies in the market [2].

Technology improvements should allow solar energy companies to attract bulk orders. This is in light of the demand for renewable energy in both industrial and residential settings continuing to surge.  Differentiation could also lead to improved margins, which are expected to lead to higher profits.

It is for these reasons that investors remain optimistic about the outlook on solar energy stocks and one of the reasons why solar stocks are moving higher.

Endnotes:

[1] https://cleantechnica.com/2019/02/24/2019-us-solar-market-outlook/
[2] https://www.ecogeneration.com.au/jinko-solar-takes-out-fifth-consecutive-award-for-panel-yield/

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