Featured Investments

Institutional investors increase AIM oil exposure as black stuff resists wider market sell-off (JOG, TXP)

05 Feb 2018 | by: Patricia Miller

Institutional investors have significantly increased their stakes in both Touchstone Exploration (LSE: TXP) and Jersey Oil & Gas (LSE:JOG) as oil prices continue to hold up against a shaky market backdrop.

Industrial investment company North Energy Capital increased its stake in Canada-based upstream oil and gas firm firm Touchstone from 10.1pc to 11.1pc by purchasing shares on the open market.

The transaction is the latest in a series of purchases made by North Energy in Touchstone, and gives the investor a total of 14.3m shares in the business.

Meanwhile, last Thursday saw asset management firm Schroders increase its stake in Jersey Oil & Gas, a North Sea explorer, from 9.1pc to 10.2pc, to give it a total of 2.2m voting rights.

Jersey Oil and Gas shares are currently sitting at 203p, slightly above November’s placing price of 200p, while Touchstone is currently priced at just 11.7pc, below its 20 and 50 day moving average.

With both looking fairly cheap, there is a good argument for making a purchase now as oil prices continue to hold up against the beginning of a possible correction phase in the broader equity market.

Despite slipping below the $70-a-barrel mark today to hit a one month low of $68.22, oil prices still look relatively strong when compared to global indices, which have suffered a sell-off over the last few days of trading.

Markets have been hit by fears that the return of inflation will spell a quick end to a decade of easy monetary policy at central banks across the world.

In the US, the S&P 500 suffered its worst trading day in two years on Friday after strong jobs data and wage growth figures backed up higher inflation forecasts.

This could force the Federal Reserve’s hand when it comes to further increasing interest rates.

Other markets around the world have followed suit today, with Hong Kong’s Hang Seng tumbling by as much as 2.7pc, the Topex falling 2.2pc, and the European Stoxx 600 and FTSE 100 both hitting two-month lows.

Oil prices, on the other hand, are benefitting from worldwide growth and rising inflation expectations as demand for commodities looks set to continue increasing.

Data collected by Bloomberg recently showed that investment flows into broad-based commodity funds have risen by $773m so far this year.

The only sector to see more inflows has been precious metals, which tend to be the major beneficiary when markets switch into ‘risk-off’ mode.

Jersey Oil & Gas has got off to a strong start to the year, rising from 185.5p to 208p, hitting a high of 225p.

It was boosted last week by the news that a follow on to its Verbier discovery well is planned for this Summer.

Touchstone’s shares have been flat so far this year despite the firm revealing it had increased fourth-quarter output in 2017 by 16pc year-on-year while receiving a higher oil price.


The author of this piece does not hold a position in any of the companies covered in this article.

Valuethemarkets.com, Digitonic Ltd (and our owners, directors, officers, managers, employees, affiliates, agents and assigns) are not responsible for the content or accuracy of this article. The information included in this article is based solely on information provided by the company or companies mentioned above.

This article does not provide any financial advice and is not a recommendation to deal in any securities or product. Investments may fall in value and an investor may lose some or all of their investment. Past performance is not an indicator of future performance.

    More News & Analysis

    Zoom to pay $85M for privacy miscues at start of pandemic

    Zoom will pay $85 million to settle a lawsuit alleging that weak privacy controls opened too many peepholes into the personal information of users and that it was too easy for outsiders to disrupt video meetings during the early stages of the pandemic.

    BMW reaps $5.7 billion in profit, warns on parts shortages

    BMW reported 4.8 billion euros ($5.7 billion) in net profit in the second quarter, rounding out a strong earnings season for Germany’s three big automakers as global auto markets continue to recover from the pandemic — particularly when it comes to luxury cars.

    Carmaker Stellantis reports record 1H margins, $7b profits

    Automaker Stellantis on Tuesday said Tuesday it achieved faster-than-expected progress on synergies and record margins in its first six months as a combined company, despite suffering 700,000 units in lower production due to interruptions in the semiconductor supply chain.

    European economy grows 2%, ending double-dip recession

    Europe emerged from a double-dip recession in the second quarter with stronger than expected growth of 2.0% over the quarter before, according to official figures released Friday, as southern European economies previously hard hit by the pandemic showed surprisingly strong results.