An intricate web of regulations, strategies, and fears tying emerging markets to oil production presents interesting opportunities for investors according to Konstantinos Kazinakis, President and COO of United Bunkers Investors Corporation in Toronto. Overseeing 21 years of investment transactions with value approaching $1.5 billion USD, Kazinakis has shared his insights on commodity trading and the future of developing economies as seen from their potential for oil production.
While optimists believe in the strong correlation between high-yield bonds and crude futures and petrol, suggesting that low interest should boost emerging countries, Kazinakis is convinced that short interest on the liquid oil shares is not always an indicator of economic performance and warns investors to be mindful of the consequences of price drops that might be quite detrimental for the bonds industry. Governments are also responding to the steady drop in oil prices especially as OPEC has refused to freeze crude production, which has been offered as a solution to stabilize the global market. Saudi Arabia, the world’s largest exporter of oil along with other member countries within the cartel acknowledge the price volatility that stroke the energy industry, but have remained reluctant to restrain the production. On the bright side, the excess in petroleum and other liquid fuels supply has been reduced by a slowdown that occurred in the non-OPEC countries, particularly in Canada and Nigeria – a solution that appeared very timely since it helped to slightly stimulate energy prices.
Konstantinos Kazinakis forecasts a steady growth for consumer countries across Europe, Asia, and South America. The dipping commodity prices serve as a great stimulus for oil and gas importing nations in the European continent, and are certainly a good opportunity for newly industrialized markets, such as Japan, China, and India to boost their fiscal resilience against capital outflows. In the current context of very complex energy paradigm, the biggest winners are companies based in the rapidly growing economies of Asian and Latin American countries. Brazilian oil and gas operator Braskem S.A., for instance, saw a remarkable growth in revenues by 100% in 2013 and 2014. China’s Sinopec, the largest oil refiner and producer of oil and gas in the country, has immense advantages for further solidifying its positions in view of the global energy developments of the past years, mainly due to its colossal deposits of fuel and energy resources, unprecedented government support, and unlimited domestic demand. While uncertainties remain, the current geopolitical and economic outlook is more optimistic than it was two years ago, offering new avenues for growth and forecasting notably improved outcomes, particularly to developing countries in the BRICS geopolitical alliance led by Russia, Iran, Brazil, China, and some parts of Africa.
Konstantinos Kazinakis is the President and COO of the Toronto-based United Bunkers Investors Corporation. Renowned investor with over 20 years of experience in managing trade financing domestically and internationally, he has in-depth knowledge in debt restructuring and equity investments. To date, Kazinakis’ portfolio includes transactions of over $1.5 billion and successful repositioning of $1 billion of non-performance loans. Building from his interest in oil and gas sector and shipping industry, he provides innovative solutions for commodity trading, offering comprehensive financial and logistic support to the energy companies, oil cargo and bunkering traders, refineries, and producers. United Bunkers Investors Corporation is supported by Financial Technology trade financing platform for a high technology solution to the global trade finance market, which is worth more than $ 4 Trillion US dollars a year, the gap is currently around $1.4 Trillion for the innovation in making trade financing more efficient and to protect against all risk.
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