The next commodity price hike will be triggered by supply constraints, a lack of investment and higher regulatory costs, CIO Desmond Tjiang told the Reuters Global Markets Forum.
It will take time for the supply chain disruptions to resolve, but “the market might not take it because it has no patience,” Tjiang said.
Conning manages $ 124.6 billion in assets worldwide, including approximately $ 2 billion in its Asia-Pacific branch.
Tjiang, which has a Brent crude price target of $ 90 a barrel, expects the Organization of the Petroleum Exporting Countries Russia and Their Allies (OPEC +) to maintain a July deal https: // reut .rs / 2YhZjul, under which 400,000 barrels per day (bpd) would be added until at least April 2022 to phase out 5.8 million bpd of existing production cuts.
Oil prices have been positively surprised by a shift in demand relative to natural gas, Tjiang said.
Tjiang expects global stock markets to fall less than 5% from current levels by the end of 2021.
“We are still overweight equities, but have reduced short-term risk given a more complex macro situation.”
The MSCI gauge of global equities fell 0.1%, but after a more than three-month low in Asian trading, following a wide sell-off on Wall Street.
Chinese stocks are valuable, Tjiang said, but added he was “cautious for now,” with investments in China depending on “how and when” the government reacts to reverse the country’s economic slowdown and “an enormous amount of uncertainties”.
Tjiang was positive on Japan due to its exposure to global manufacturing and automation, as well as “the lack of an inflationary threat and continued supportive fiscal (and) monetary policies, relative to other developed markets “.