Supermarkets and oil refiners are among the companies that came out on top during an escalation of the Middle East conflict, but hard-hit airlines, logistics firms and gold miners may have their time to shine as a resolution to the war draws nearer.
Shortly after the US launched military strikes on Iran in late February, several companies felt the shock to their share prices from investors pulling away.
While gold is a safe-haven asset that people often flock to during periods of uncertainty or conflict, gold miners were on the losing end during the recent conflict as investors searched for safer investments, according to Ten Cap founder and portfolio manager Jun Bei Liu.
โWhen a war first hits, people buy gold, but gold equities get sold off,โ she said. โThatโs because gold companies need to go out and raise money to dig up gold, so when risk appetite in the market falls, investors want to hide in physical gold rather than gold companies, which still need to raise money and are more risky.โ
Shares in gold miner Northern Star were trading at nearly $30 when the US struck Iran, after which they nearly halved. More recently, they have been hovering about $20.
Liu also said there had been some profit-taking after a strong run for gold companies last year, and that the energy-intensive nature of gold production might have worried some investors as oil prices spiked during the conflict.
The jump in oil prices, however, was a boon for Australiaโs oil refiners. Shares in Woodside and Santos soared, while others such as Viva had a โstroke of luckโ after recent lacklustre performance, according to Liu.
โThis windfall during the last couple of months has really helped [these companies] strengthen their balance sheets,โ she said.
Woodside shares jumped from about $28 when the conflict started to $35 at their peak in April.
However, nabtrade director in investor behaviour Gemma Dale said Woodsideโs share price had flattened back out recently.
โThere was a massive uplift during the oil crunch, but then they had a fire at one of their [gas] plants,โ she said. Other companies in the oil and coal industries also ended up relatively flat recently, Dale said.
However, she said those buying exchange-traded funds (ETFs), who donโt tend to be as active in selling and tend to hold on to investments over a longer horizon, had poured money into oil ETFs and kept prices somewhat elevated.
Liu said supermarkets had done well during the conflict. Shares in Coles climbed from about $20 to $24. They remained close to the upper end over the past week.
โPeople were not travelling or driving much, so while companies such as toll road operator Transurban were being sold off, supermarkets saw a nice spike because people stopped going to restaurants and were cooking more at home,โ she said.
Shaw and Partners senior investment adviser Adam Dawes said insurance companies were also among the winners from the conflict following elevated oil prices and pressure on broader prices.
โAs inflation increased, interest rates have gone higher, which means insurance companies have made more money from bonds,โ he said.
Shares in insurance group QBE have climbed from about $20 in February to $24 in June.
Meanwhile, despite growing investment in data centres and wider excitement about AI, companies such as WiseTech have taken a hit, which Dawes attributed to a rise in โrisk-offโ sentiment among investors. Shares in technology companies are often seen as relatively risky investments that many investors sidestep during periods of heightened uncertainty.
Shares in WiseTech were trading at close to $50 in February but they have fallen to about $37 recently.
Logistics companies such as Brambles have also taken a hit during the conflict. The company also suffered from a class action decision in April and Dawes said it had a profit downgrade in May.
โ[During conflicts], confidence gets zapped, so less people are buying stuff and less things get shipped,โ he said. โThereโs also been shipping delays, high freight costs and currency pressure.โ
Novus Capital senior equities adviser Gary Glover said shares in travel companies and airlines such as Flight Centre and Qantas โ as well as discretionary retail companies โ were starting to recover, pre-empting a peace deal in the Middle East.
โA lot of people obviously donโt associate retail companies with a peace deal, but if oil prices fall, then it puts less pressure on discretionary spending,โ he said, especially as these companies have also been grappling with higher interest rates and dampened household spending.
Shares in Harvey Norman slipped from about $6.30 in February to as low as $4.30 recently, but they have been trading at closer to $4.80 over the past week.
If the conflict does end, Liu, Dawes, Glover and Dale see potential for a pick-up for shares in tech and logistics companies, gold miners, EV makers and travel companies as well as companies with exposure to the Middle East such as engineering business Worleys, which could be involved in reconstruction in the region.
โI think EV makers and car dealerships such as Eagers Automotive will be a winner,โ Liu said. โTheyโve got a huge amount in the pipeline, and thereโs been a bit of a supply disruption, so I think theyโre going to do really well.โ
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Millie Muroi is the economics writer at The Sydney Morning Herald and The Age. She was formerly an economics correspondent based in Canberraโs Press Gallery and the banking writer based in Sydney.Connect via X or email.From our partners
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