20160321_BSC_Sector & Company Insights_EN_The impact of El Nino La Nina

Experts and Forecasts

Each year, experts from all fields, using sophisticated forecasting models (or their guessing) to make forecasts from long-term to a decade, but the funny thing that most expected accuracy rate even for a short time under 1 year are not high. This makes us wonder how many people thought terrorist event of the day 10/9/2001, how many people in 2006 who saw the financial crisis and subprime mortgage in the US (“The big short” film), and how many people in Sep 2014 saw oil prices plunge trend ... This makes us realize we know little about how the world we thought we knew perfectly well.

The stock market and the changes

There are very few sectors with great and immediately volatility due to all related information (or investors think it is related) as the securities. However there is always a certain distance between the base value of the business and stock price movements of such enterprise. One of the biggest changes, most unpredictable and most unexpected potential, may come from climate change.

Climate change and Stocks

Although science and technology develop, but the agriculture, forestry, fishery and part of the industries, the food is still very much depended on the weather and the environment. Climate change may cause a very favorable sector become difficult and reverse.

This report will mention climate change issues, the rotation of phenomenon as the El Nino & La Nina, and impacts to related industries such as:

• Direct: Sugar, milk, rubber, fisheries, animal feed, electricity;

• Indirect: Textile, Fertilizers.