SHANGHAI/HONG KONG (Reuters): Investors are rushing into Chinese renewable stocks, betting the oil shock triggered by the Iran war will boost global demand for green energy, a sector China dominates. This trend in Asia, driven by concerns about energy security and growing distrust in U.S. reliability, contrasts with a shift in the United States back toward oil and gas.
“When the dust settles or oil prices come down, countries will focus on energy security,” said Aaron Costello of Cambridge Associates. “They need to build out renewables, energy grids, possibly nuclear power, and defense. The U.S. has become more erratic.”
Since the U.S.-Israeli war against Iran began on February 28, funds have moved into Chinese stocks across solar, wind, electric vehicles, and batteries. The CSI Green Electricity Index has climbed 6% in March, and the CSI New Energy Index is up 2%, even as the Shanghai Composite Index fell 8%.
Industry leaders have outperformed:
* GCL Energy Technology surged 48%* Contemporary Amperex Technology rose 15%
* China National Nuclear Power Co Ltd gained 8%Yuan Yuwei, a hedge fund manager at Trinity Synergy Investments, said he is betting on China’s renewables due to expected state support and rising export demand.
“China will boost investment in energy,” he said, adding that the war may shift consumers away from gas-powered cars, benefiting electric vehicle makers and battery producers.
Lin Sheng of Wish Fund Management said the energy crisis will push countries to rethink energy security and diversify energy sources, increasing demand for Chinese renewable exports.“Some oversupplied sectors will become profitable,” he added, noting that the market correction presents a buying opportunity.
