From January 14th to 15th, Tonga, known as the holy place for diving, suffered an underwater volcanic eruption. The mushroom cloud formed directly broke through the troposphere. The volcanic ash covered the entire Tonga island, causing many houses to be destroyed and water sources to be polluted. The tsunami even hit the west coast of the United States as far as 10,000 kilometers away. Judging from satellite cloud images, the island of Hongahaapai on the crater has basically disappeared.
On January 21, the Tongan government issued its second official statement after the disaster, saying that 84% of the country’s population was affected by the tsunami and volcanic ash ejected by the volcano, and three people were killed. At present, rescue forces from various countries have arrived one after another. The Chinese citizens in Tonga are all well, and the Chinese embassy is assisting in the reconstruction of Chinese shops.
This may be the largest submarine volcanic eruption in the world in 30 years. According to historical experience, continuous volcanic eruption may cause global cooling and even reduce food production. However, from the current actual situation, it is believed that although the “parasol effect” will cause local It has become a consensus that the region will be cool and rainy for a period of time, but it will not bring about a “year without summer”.
Many securities companies have also released research reports one after another, focusing on the areas that may be affected, such as agriculture, energy, mining, and transportation. “The farce of “Tonga Volcano Concept Stock”, the board secretaries of a number of “Tonga Volcano Concept Stocks” answered investors’ questions on the interactive platform, so will the A-share market be affected? Let’s hear what listed companies have to say.
Image source: Photo Network-500911409
This eruption has a large impact area but a relatively minor impact
Tonga, with agriculture, fishery and tourism as its pillar industries, has attracted worldwide attention due to this volcanic eruption. On January 18, the Tonga government issued its first disaster report. An underwater volcanic eruption triggered a tsunami as high as 15 meters, causing an “unprecedented disaster” to the South Pacific island nation. On January 19, Nuku’alofa, the capital of Tonga, which was once lost to the outside world, finally restored some power and communications.
On January 20, the first rescue plane carrying drinking water, generators, communication equipment and other supplies arrived at Tonga Airport. However, international rescue operations have also become difficult due to the pervasiveness of the new crown epidemic. On January 21, a rescue flight was forced to return due to a positive case, and all relief supplies are now delivered in a non-contact manner.
At present, Tonga’s primary problem is that the local drinking water is still in short supply, and the electricity supply has not been fully restored, and the entire country’s crops have been devastated. The Tongan government said in a statement on January 21 that there were no signs of more volcanic activity, but there were still potential risks for ships sailing in the nearby waters and domestic flights were still suspended.
In addition to the obstruction of transportation, the biggest challenge in Tonga is the communication problem. The Tongan government said that wired telephone communication has been restored in some areas, satellite and high-frequency radio communication has been established in some areas, and international telephone communication has also been partially restored. Arrived within days, plans to start repair work on the broken submarine cable.
As of now, a week has passed since the eruption of the Tonga volcano, and the volcanic ash over parts of Tonga has settled, but a large amount of particulate matter is still floating in the air. So, will the effects of the Tonga eruption continue to ferment? On January 23, Liu Jiaqi, a researcher at the Institute of Geology and Geophysics of the Chinese Academy of Sciences and an academician of the Chinese Academy of Sciences, said in a Weibo live broadcast that although this submarine volcanic eruption has a great impact, it is a VEI-5 volcano in terms of the scale of the eruption. The eruption was less severe than the 1991 eruption of Mount Pinatubo in the Philippines.
Expert: Economic activities are less affected by indirect effects
“So far, it cannot be said that the volcanic eruption is over. There may be small eruptions on the seabed. Even if it is relatively static, it may be accumulating energy, and it is likely to erupt again to a certain extent.” Liu Jiaqi said that it is currently erupting on the surface. A large amount of volcanic ash and volcanic gas will cover neighboring countries and cause secondary disasters such as earthquakes and tsunamis, but it will not bring catastrophic effects to my country.
It is difficult for neighboring countries to relax their vigilance, and some securities companies have begun to conduct in-depth research on the impact of global agricultural futures trading.
Shen Meng, executive director of Chanson Capital, told the “Daily Economic News” reporter that the climate impact brought by the volcanic eruption may end this year’s La Niña ahead of schedule and reverse the El Niño phenomenon, which will have a huge impact on the environment where animals and plants grow. Cyclical impact, resulting in a reversal of volatility in related financial products.
In the past 100 years, there have been three large-scale volcanic eruptions around the world. After the eruption of Mount Pinatubo in 1991, 10 trillion to 20 trillion grams of sulfur dioxide was released into the atmosphere, reducing 10% of the earth’s sunlight exposure. , causing global temperatures to drop by 0.6 degrees Celsius over the next 15 months. Experts from the Chinese Academy of Meteorological Sciences believe that for my country, volcanic eruptions can weaken the intensity of the East Asian summer monsoon in the following year, which in turn leads to a southerly summer rain belt in my country.
Analysts at CICC Securities said in the research report that if the Tonga volcanic eruption increases the probability of El Niño in the second half of the year, it will lead to increased rainfall in South America, which in turn will benefit soybean production, which may eventually support oil prices, but soybean meal prices are subject to change. At the same time, it may cause drought in Southeast Asia, which will lead to a significant reduction in palm oil and rubber production, which may cause the recovery of palm oil production in Malaysia to continue to be hindered.
Fortunately, according to the latest scientific research, the total mass of sulfur dioxide erupted on January 15 was only 400 million kilograms, far below the amount required to change the global climate on a large scale. Therefore, some market participants told the “Daily Economic News” reporter that from what they have learned so far, since the price fluctuations of agricultural products are not directly related to volcanic eruptions, and the factors affecting the climate are complex, the company has no relevant forecasts.
Futures analysts have made a detailed review of the agricultural products exported from the United States and South America from the perspective of grain trade routes. They believe that Tonga is located in the southern Pacific Ocean and eastern Australia, which will not have a direct impact on the basic trade route of soybeans.
So does the assumption of indirect effects hold?
A research report released by Tianfeng Futures pointed out that the eruption of the Tonga volcano may lead to the obstruction of air routes in the Pacific region and the restriction of the aviation industry of nearby countries, which will promote the increase of sea freight on routes that have not been affected in the short term. Routes may be affected to some extent.
Shen Meng told reporters that the Tonga volcanic eruption may continue to push up the prices of raw materials and other materials to a certain extent, increasing the cost pressure of listed companies, and then speeding up some listed companies to transfer the pressure of rising costs to the downstream through price increases. However, analysts in the mineral resources sector believe that in the black sector, non-ferrous sector, and chemical sector, it is unlikely that the supply will be affected by delivery.
Bu Naxin, vice president of the Science and Technology Industry Investment Branch of the China Council for the Promotion of International Science and Technology and executive director of the Science and Technology Industry Strategic Investment Think Tank, raised new concerns that may arise from the incident. He told reporters that the sudden arrival of some natural disasters will greatly accelerate the promotion of clean With the development of energy, environmental protection industry and ecological agriculture, it is believed that people’s enthusiasm for investment in green economy will explode.
Has the “shock wave” of the volcanic eruption reached the A shares?
Surprisingly, when the volcano erupted tens of thousands of kilometers away from my country, it also caused a lot of “waves” in the A-share market.
Shortly after the news of the eruption of the Tonga volcano, on the interactive platform, investors were very concerned about whether it would bring benefits to the stock prices and operating status of some listed companies with main protection and emergency equipment. Are there corresponding products to deal with disasters caused by volcanic eruptions? For some listed shipping and air transport companies, investors are more worried about whether it will affect the company’s routes and thus affect the company’s daily operations. At the same time, some companies with industrial layout in the pan-Pacific region are also one of the targets of investors’ attention.
Investors’ concerns are justified. According to the analysis of many experts, after the volcanic eruption, in addition to the tsunami, a large amount of volcanic ash erupted with it is a greater threat. Water pollution, acid rain warnings, communication blockages, flight suspension… Agricultural products and aviation markets bear the brunt, and in a short period of time, may lead to tight shipping capacity.
So, what is the impact of the Tonga volcanic eruption on the actual operation of listed companies? “Daily Economic News” reporters sorted out more than ten A-share listed companies with upstream industrial chain layouts in New Zealand, Chile, Australia and other regions. It should be pointed out that many of these companies denied that the Tonga volcanic eruption would affect their operations when responding to investor concerns.
Joyvio Foods (300268, SZ) conducts salmon farming, processing and brand sales through its overseas Chilean holding subsidiary Australis. The company responded that the company’s salmon farming business is mainly located in the Lake District of Los Lagos (Zone 10), Australis in Chile. It is carried out in its own marine fattening centres in areas such as Sen Aysén (11th district) and Magallanes (12th district). The Tonga submarine volcanic eruption did not affect the company’s business. Meanwhile, as of January 18, no information has been seen of the salmon industry being affected.
The core raw material of West Wheat Foods comes from Australia. In response to the question of whether the eruption of the Tonga volcano will affect this year’s oat harvest, the West Wheat Food Securities Department responded that the Australian oats in 2021 have been harvested, and there are still several months before the next season’s planting. Will it affect the future? The harvest requires further observation. The company will reserve oat grains according to production, planning, etc. At present, the company has a certain amount of oat reserves. Perhaps affected by relevant news, the share price of Ximai Foods has been on a downward trend in recent trading days. As of the close on January 21, the share price of the listed company closed at 16.62 yuan per share, down 1.19%.
It is still in the field of agriculture and food. Investors in Pengdu Agriculture and Animal Husbandry can’t sit still. The company already owns 16 pastures in New Zealand and agricultural resources such as soybeans and corn in Brazil. In 2021, Brazil will be delayed due to the impact of floods. Soybean harvesting and export are not required. Will the Tonga volcano eruption affect the company’s industries in New Zealand and Brazil?
On January 20, Pengdu Agriculture and Animal Husbandry responded that the current local climate in Brazil is normal and soybeans are about to enter the harvest season, and there is no obvious impact. As for the New Zealand industry, the company said on the 17th that the current tsunami generated by the volcanic eruption only affects the northern and eastern coasts of the Northland of New Zealand. The tsunami activity warning has been temporarily lifted, and the company’s pastures are not affected. Currently, the risk of ash drifting into New Zealand is very limited, with the exception of Tropical Cyclone Cody, which brought some eruptive particles to the eastern North Island.
The representative of Pengdu Agriculture and Animal Husbandry told the “Daily Economic News” reporter that the future impact cannot be accurately estimated, because it will take time to verify the impact on the global climate.
The reporter noticed that companies such as Xinao Co., Ltd., Nanshan Zhishang, and Zhewen Films all have the business of purchasing wool from Australia, New Zealand and other places, but the volcanic eruption has little impact on them, and no company has stated that so far. associated adverse effects. Listed companies in the dairy industry, such as Bright Dairy, Wahaha, Yili, and New Hope, which have dairy manufacturing bases in New Zealand and other places, have not indicated that they will be affected.
In addition, it is currently unknown whether companies whose main products are meat snacks or staple food originating in New Zealand, such as Petty Foods, will be affected. However, according to the responses of major listed companies, companies with industrial chain supply-side layouts in Australia, New Zealand and other places have not had any adverse effects at present. When it comes to price changes, it may still be necessary to observe market trends.
In terms of shipping and shipping, HNA Technology, Kechuang International, Shanghai Airport, etc. have all received relevant inquiries, but most of the companies responded directly that they did not affect the company’s operations. The reporter of “Daily Economic News” learned from the secretariat of Huamao Logistics that since the Tonga volcano is not the only way for regional routes, the impact on transportation is limited, and there is currently no information about the obstruction from front-line employees.
Hot money pays attention to “volcano concept stocks”, but listed companies have not followed suit
What’s more interesting is that Zhangzidao’s absurd “scallop story” has made it labelled as the “first share of the volcano concept”. Although the relevant news was subsequently falsified, the company’s stock price still went up bizarrely. Word daily limit.
After the turmoil, some hot money “come in with excitement” to stir up the volcanic concept company and gain a lot of attention.
According to the “Securities Daily” report, the staff of Jinjian Rice Industry said that many investors called to ask them the day before, whether the hot pot ingredients in pre-made dishes are selling well, is it good for the company? The next day, many investors called to ask them if the eruption of the Tonga volcano would be good for the company? Just one night later, in the eyes of investors, Jinjian Rice Industry switched from a “prefabricated food concept stock” to a “volcanic concept stock”.
In addition, there are also brokers who have thrown out the relevant sectors and companies affected by the volcanic eruption, reminding investors to pay attention.
On January 20, Guosen Securities released a research report saying that if the Tonga volcano continues to erupt, it may affect the normal production and supply of agriculture in the next two years, and further affect the level of food prices. It is recommended to continue to pay attention to the investment opportunities in the planting and seed sectors. Reclamation Agricultural Development, Great Northern Wilderness and COFCO Sugar, etc. In the seed sector, we recommend Longping Hi-Tech, Denghai Seed Industry, and Dabeinong. Western Securities also stated that the volcanic eruption may cause global climate anomalies and crop production reductions, making the supply and demand side of the agrochemical industry more tense. It is recommended to pay attention to companies related to the agrochemical industry chain.
Shen Meng commented that all concept stocks are artificially set, but the impact of volcanic eruptions is more negative, so it is not meaningful to delineate concept stocks, but you can learn from the risks that may be negatively affected, and natural For listed companies, disasters cannot be predicted and avoided in advance, and more diversified risk management and control measures can be adopted to minimize losses.
Feedback from all parties shows that while the Tonga volcanic eruption attracted attention, its “shock wave” did not cause great turbulence in the A-share market. Although some investors heard the news, the listed companies did not seem to follow the trend.
Beihua Co., Ltd. responded to investors that the eruption of the Tonga volcano had no impact on the company’s protective product market, and had not received relevant orders for the time being. When investors asked whether it would affect the poultry industry and whether to consider raising product prices, Yike Foods responded that volcanic eruptions and extreme weather would have a certain impact on the poultry industry in the short term, and the company’s product prices will be based on costs and market supply and demand. The relationship is adjusted in time.
It is not difficult to find out from recent research reports that most of the major institutions are based on industrial analysis on the volcanic eruption, and do not blindly pursue the concept of short-term hotspots.
Source of cover image: Photo Network-400080920
