What assets have advanced in the face of the crisis in Ukraine?


A few days were enough for the tensions in Ukraine, which were counted as one more factor to take into account in the markets (behind the Federal Reserve, inflation and obviously the pandemic) became the first. All eyes were on only one context this week: the Russian invasion.

The president of Russia, Vladimir Putin, seeks with his military action that the government of Volodímir Zelenski fall. But first the stock markets fell. And although they managed to recover at the end of the week due to hopes of negotiations that end the conflict, it is one possibility among many others.

It would be naive to think that making investment decisions in contexts like the current one could be done with a simple recipe. The task becomes even more difficult in the midst of increasing volatility linked to information about a war. But there are assets that undoubtedly advanced after the conflict.

“Although the market situation seems daunting, there are opportunities. Gold has hit a high not seen in over a year. There are many options to invest in the metal and it seems that the demand will continue to grow”, explained Daniel Cawrey, Director of Strategy at the Fintech company Passfolio.

Gold has been used as a haven of recurring value throughout history and that is not something new, but having multiple uses such as jewelry or the manufacture of various electronic devices, it benefits different types of companies, said the strategist. A gold ETF also benefits in this context.

The defense and logistics sectors, he said, improve their prospects. “This conflict in Eastern Europe is likely to make supply chain problems worse. Companies that can relieve that pressure will see increases in revenue and shareholder value,” Cawrey said.

Eduardo Abarca, CEO of Aurea Capital Markets, said it is important to remember that “past geopolitical events were generally short-term market problems first, especially if the economy was on solid footing” and US indices are looking for address.

“Oil stabilized far from its highs along with the recovery in equities. The Brent blend, a world reference, marked a level of 100 dollars for the first time since 2014”, recalled the manager about a year that was marked by a similar event: the annexation of Crimea.

“In terms of operations, these are times to remain on the lookout, to wait for the movement of the markets to confirm if they are short-term and the fundamentals will complement the technical analysis or if this is going to have a consequence in a longer term,” he said with more conservative stance.

For Norbert Rücker, head of Economics and Research at Julius Baer, ​​”energy markets are the central stage of the crisis”, because the flows of oil and gas from Russia to Europe are among the most relevant. “European gas prices are up around 50%,” he said in a note.

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This text is informative and does not constitute an investment recommendation by its author, the experts consulted, El Economista or any employee of this journalistic company.



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