Tags: Ross | investment | oil | China

Wilbur Ross: 'Very Good Investment Opportunities' Through Year-End

By    |   Wednesday, 17 December 2014 09:19 AM

The plunge of oil prices to five-year lows has created volatility throughout financial markets, and that creates opportunities for shrewd investors, says Wilbur Ross, chairman of WL Ross & Co.

"Between now and the end of the year we will have very good opportunities," he told CNBC. "People want to clean out their portfolios, not wanting to show too much energy exposure at year-end, and then of course tax-loss selling."

So how is WL Ross & Co. approaching markets? "We've been looking more at the credit side of things, particularly the [oil] exploration and production companies and oil service companies," Ross said.

"They have been really bashed to where they're well into double digit returns. A lot of them selling at 70 cents on the dollar or even lower."

Ross isn't so interested in Russia, where the ruble is plunging and inflation is soaring. "It is too tricky a place for me to invest in. We like places where there is some semblance of the rule of law. Russia seems to be much more the rule of the law of the ruler."

But Ross is interested in China. "We believe that China has been a little bit overdone," he said.

"It's true that their growth is slowing. It may be even somewhat slower than what they're reporting, . . . less than 7 percent. Nonetheless that is a Herculean achievement for a country that size. A lot of the securities there have been really bashed," Ross added.

"Plus, we think China has done a fundamentally better job running its economy than have most of the more developed economies."

He believes low oil prices is good for the U.S. and European economies. In addition, it's "certainly good for China, India and Japan because they are all big importers. As a result, the reduction in price is a very meaningful thing. For the U.S., I think it adds somewhere between $50 and $60 per month to the average household's net after tax income. That's a lot when you consider how many people live from payroll day to payroll day."

As for oil prices, many experts expect them to continue plummeting. "This won't stop until oil producers are on their backs," Bjarne Schieldrop, chief commodities analyst at SEB, Sweden's fourth-biggest bank, told Bloomberg.

"There will be better demand in the second half, hopefully some demand effects from lower prices, and definitely softer growth in U.S. shale."

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The plunge of oil prices to five-year lows has created volatility throughout financial markets, and that creates opportunities for shrewd investors, says Wilbur Ross, chairman of WL Ross & Co.
Ross, investment, oil, China
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2014-19-17
Wednesday, 17 December 2014 09:19 AM
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