INTERNATIONAL. The Moodie Reportfolio, representing an investment in 13 key travel retail-related stocks*, has been badly affected by the rapid surge in oil prices and mounting economic fears. A number of the stocks have taken heavy hits in recent weeks, driven largely by the oil crisis and the deteriorating eonomic environment.
Oil prices crossed US$140 a barrel for the first time in New York and London on 26 June (they are currently at around US$145) amid a declining US Dollar and the prediction by the President of OPEC that the level would hit US$170 by the end of the year.
The surge in oil prices added to the pressures on global stock markets already weakened by the US sub-prime crisis.
All the stocks in The Moodie Reportfolio are heavily dependent on the air travel industry. Each suffered a fall in their stock prices in June, when the total value of shares (in US Dollars) in The Moodie Reportfolio decreased by -12.6% month-on-month. For the first six months of 2008 the Moodie Reportfolio has fallen by -25.2% in US Dollar terms.
Shares in Stefanel, co-parent of The Nuance Group, fell -32.2% last week alone. They closed on Friday just above a 52-week low at 0.40 after a series of heavy falls during the week. Nuance is only part of Stefanel’s portfolio and there are other factors also contributing to investor sentiment, but the state of the travel markets is a significant influence.
Autogrill was down by -5.4% last week to 7.24 and fell -19.4% in the month. Converted to US Dollar terms its value was off by -31.1% for the first half of 2008.
Overall the value of The Moodie Reportfolio has decreased by -27.4% since the service was launched on 1 August 2007. The sector is actually performing soundly – its acid test will lie, we suspect, in the fourth quarter of 2008 – but the investment community is becoming increasingly jittery over any travel-related stocks.
*NOTE: At the beginning of August 2007 The Moodie Report invested a hypothetical US$10,000 – or local currency at prevailing exchange rates – in 13 travel retail-related stocks. Some are pure duty free/travel retail companies, some are parent or related groups. The resultant basket of stocks is The Moodie Reportfolio.
The stocks are:
– Autogrill (Aldeasa, Alpha, HMSHost, World Duty Free)
– Bahrain Duty Free Shops
– Dufry South America
– Hellenic DFS
– Japan Airport Terminal Co
– Jordanian Duty Free Shops
– Lagardère (Aelia; HDS Retail)
– Lotte Shopping Co
– LVMH (DFS Group)
– MISR Duty Free Shops (Egypt)
Each month our Research & Analysis Manager, Singapore-based Justin Lee, reports on the change in The Moodie Reportfolio and its individual components. He tracks our original investment and notes the outstanding performers for the month in both local and US currency and the year to date (the latter in US Dollar terms).
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