June 25th , 2018
OPEC+ DEAL : AN OPEN END TO CLOSE DEAL
May 9th , 2018
This is chart of ONGC stock price during FY 2014 when oil went to $100/bbl and ONGC was told to provide Rs 31000 cr subsidy. We find this all noise before the actual run up comes as it did in 2014.The benefit of crude prices to Oil refining and Gas prices is far more than the subsidy issue which fades during the year.
ONGC : ADD/BUY
BUYING LIMIT : Rs195/share
PORTFOLIO WEIGHT : 5%
( Increase can be done in tranches cause the noise should stay till announcement)
May 8th , 2018
All the overnight confusion came to end when US announced it would leave the Iran deal and put sanctions on Iran. It has given a 180-day winding down period but they have mentioned for all countries to start withdrawing the trade and not wait for the period to end.
We expect this will give good support to the crude prices which are moving higher given the inventory drawn down in USA.
It will be negative for India as Irans oil export is one major source. We expect crude prices and bond yields to go up as the correlation is strong .
Recommendation : BUY
Buying Price Limit : Rs 195
Portfolio Allocation : 3%