Wealth transfer in the stock market (?)
Key Takeaways
• Global stock market performance varied throughout 2022 with stock in AE underperformed due to its characteristics in heavy tech sector weight
• Stock market indexes in commodity dependent countries were performing better this year, including JCI
• Historically, JCI showed positive long term co-movement with coal & CPO prices
• We believe amidst highly volatile market environment during monetary policy adjustment JCI would be more resilient than in the past and compared to other stock indexes
• Strategy implication, add commodity related stock to optimize risk adjusted return & hedge against inflation
• We like UNTR IJ on the back of : positive correlation with commodity prices, good earning quality & healthy leverage ratio
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