KEY THEMES
Some news reports suggested that a government committee is about to decide on gas prices for industry players, reportedly considering lowering the price of natural gas this month. Some talks pointed that magnitude of the cut will be curtailed to only USD0.5/mmbtu. While this sits on the lower end of industrials expectations, it remains something to cherish given the current view of global commodity market. You can check out our Trading Playbook published here on 16 August 2020 for more details.
POSITIVE
ABUK, SKPC, EGCH, EKHO, ESRS: Regardless of the cut magnitude, such names are poised to benefit from a cut in gas prices.
NeUTRAL
MFPC, Cement: Misr Fertilizers Production [MFPC] is most likely out of this
picture, given its urea-linked pricing formula. Also, cement producers are mostly reliant on other sources (e.g. coal and refuse-derived fuel).