Daily Brief Energy/Materials: OCI Co, NAC Kazatomprom JSC, Berger Paints India, Iron Ore, Crude Oil, New Zealand Energy and more

• The momentum for getting ahead on positions with KOSPI 200 rebalancing is holding steady. With around 60% of the screening period behind us, it’s time to start preparing our positions.
• The current rebalancing’s screened changes have a relatively lower price volatility, suggesting a stronger chance for more aggressive position build-up now compared to previous rebalancings.
• Trading volumes vary greatly among these changes, affecting their passive impact sizes. Consider using different weights in basket trading instead of equal weights.

• Kazatomprom announced their first half 2024 results and updated 2024 guidance, with production numbers and inventory levels dropping significantly year on year.
• Kazatomprom’s inventory levels are at nine-year lows, with only about four months of production in inventory.
• If Kazatomprom does not hit their production targets, they may need to purchase pounds of uranium in the spot market to maintain inventory levels.

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• The review period for the Nifty 100 Low Volatility 30 Index ends on 30 August. The changes will be announced mid-September and implemented at the close on 27 September.
• Four potential constituent changes, volatility changes and capping changes will result in one-way turnover of 16.05% resulting in a round-trip trade of INR 14.4bn (US$172m).
• Three of the four potential deletions will have sell flows from the NSE Nifty Next 50 Index and Nifty 100 Index trackers as well.

• Iron ore prices rebounded strongly last week and continued rising this week, reversing losses from the previous week’s 9% decline
• Chinese portside inventories of iron ore fell by 2.48 million tons in August, signaling strong demand despite slower drawdowns in the final weeks
• SGX Iron Ore options saw a 20.7% decline in volume last week, with a sharp increase in the put/call ratio from 1.56 to 2.35, indicating increased bearish sentiment

• US oil and gas rig count fell by one to 585 for the week ending 23/Aug, marking a decline in rig count for the second straight week.
• US oil rig count was unchanged at 483, after falling by two the week prior. Gas rigs fell by one to 97, after rising by one the previous week.
• For the week ending 16/Aug, US crude oil production rose back to its record high of 13.4m bpd, after slipping down to 13.3m bpd the week prior.  

• Commencement of drilling operating at the high impact Tariki field is likely to be delayed by two weeks.
• This has no impact on our valuation.
• Our unrisked NAV for the Tariki-5 well is C$4.90 per share, including C$2.50 per share for the oil target and the balance for the low risk gas target (2P reserves).