- The Chinese oil and gas giant, CNOOC has been added to the United States blacklist of companies with links to the Chinese military.
- When combined with other recent new laws, a bad case scenario could see their shares delisted from the United States based exchanges and also see their access to technology limited.
- The extent that this impacts their earnings is currently unknown, which means that investors are forced to make decisions with limited information but at least their financial position is well-positioned.
- Whilst this may or may not be a cold war scenario, tensions between the West and East seem to only be getting worse and thus it diminishes the attractiveness of cross border investments.
- I still believe that a neutral rating is appropriate since the geopolitical uncertainty and thereby risks are simply too significant, even for a high dividend yield.
For further details see:
CNOOC: Geopolitical Risks Leaving Investors In The Dark