Chemicals Industry Index Investment Bank Valence Introduces New Global Chemicals Index
Wall Street takes a closer look at the chemical industry – Investment bank The Valence Group presented its own Global Chemicals Indices: The Valence Global Chemicals Indices break down the overall chemicals sector into more than 30 sub-sectors in order to track their individual share performance. Chemical sub-sectors’ stock performance can now be measured relative to each other, as well as to broader share price indices.
New York/USA – With the new indices, chemical sub-sectors’ stock performance can now be measured relative to each other, as well as to broader share price indices, speakers explained.
Sub-sector developments can be extracted and analysed in many ways: When taking Valence's favourite industry sector of the past years, the top–performing fertiliser industry, the recent growth reflects the increasing need for food and rising commodity prices globally.
Biofuels on the other hand, although praised as the number one future technology, perform poorly – due in part to scepticism over government resolve to support alternative energy sources and the on-going debate over diverting resources (corn etc.) from the food chain to biofuels production. The use of biofuels by the US military is currently a subject of ongoing discussion (see also Green Technology Goes Khaki: US Military Joins the Biofuels Boom).
Index Reflects the Diversity of the Chemical Industry...
With this index, Valence states, it is possible to compare specific companies to the performance of a directly relevant peer group, rather than a less comparable broad ‘chemicals’ index. Importantly, the various indices can also provide useful leading economic indicators, as chemicals are often key elements of many production processes, applied at a very early stage in the manufacturing and supply chain.
... Providing Accessible Insights in Development and Production
Commenting on the indices, Valence Partner Peter Hall said, “Chemicals sub-sector indices with this level of granularity have not previously existed. They provide highly accessible insights into the performance of this complex industry at a much more detailed level than just ‘commodity’ and ‘specialty’ – increasingly meaningless phrases. They also provide a great leading view on what is happening on the manufacturing floors around the world and are a great bellwether for the economy as a whole.”
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