victorybull

Category: Financial Market

  • Beat the market in 2022 with focused investment in three sectors

    Unprecedented retail participation and cheap money have come together to push most markets to record highs in 2021. The strength of the mother market, the US, is imparting resilience to other developed markets and emerging markets like India. The exuberant retail participation is a totally new development that has made market prediction extremely complex.

    A couple of data points that throw light on the unprecedented retail exuberance and its impact on markets would help us to get the issue in perspective. In 2021 alone, US investors have downloaded 15 million trading apps and invested $1 trillion in equity. This investment is higher than the cumulative investment made during the last 20 years. Retail investors in the US now own 12 times more stocks than hedge funds. Cheap money has provided a favorable context for investing/ trading in stocks .

    This explosion in retail participation is a global phenomenon triggered by the pandemic. In emerging markets, this trend is conspicuous in India. Retail participation is desirable but the concern is about exuberance and total disregard for valuations.

    An important lesson from stock market history is that a sharp crash is followed, more often than not, by a sharp rebound. Stock market often overreacts: both on the upside and the downside. During the euphoria of a bull market, valuations reach unsustainable levels, leading to a sharp correction. The panic during a crash takes valuation to very low levels, which in turn leads to buying, triggering recovery. This pattern repeats. This has implications for investors.

  • Asia stocks, oil struggle as Omicron worries weigh

    TOKYO (Reuters) – Asian stock markets were generally weaker  in holiday-thinned trading on Monday, as uncertainty over the economic impact of the Omicron coronavirus variant weighed on investor sentiment.

    U.S. airlines have cancelled or delayed thousands of flights over the past three days due to COVID-19-related staff shortages, while several cruise ships had to cancel stops after outbreaks on-board.

    In Asia, China reported its highest daily rise in local COVID-19 cases in 21 months over the weekend as infections more than doubled in the northwestern city of Xian, the country’s latest COVID hot spot.

    Mainland Chinese shares, though, were mixed, with Shanghai’s benchmark sliding 0.37% but an index of blue chips edged 0.05% higher.

    Australia, Hong Kong and Britain are among markets closed Monday for holidays.

    “There is concern over the widening spread of the Omicron variant, which is overall making people cautious about taking stocks higher” in Japan, said a market participant at a Japanese securities firm.

    Wall Street trading resumes later in the global day following a holiday on Friday. U.S. stocks closed at records on Thursday amid signs Omicron may cause a milder level of illness, even as the highly transmissible strain led to a surge in case numbers around the world.

    In the foreign exchange markets, the U.S. dollar continued to languish near the bottom of its range of the past month against a basket of major peers, after hitting a 16-month high in November as Federal Reserve policymakers turned more hawkish.

    Thet flat at 96.116, towards the bottom of the range from 95.544 to the 16-month peak at 96.938 reached on Nov. 24.

    In the crude market, U.S. West Texas Intermediate futures fell 59 cents to $73.20 a barrel. The contract did not trade on Friday because of the U.S. market holiday.

  • Amazon sues financial crime agency in latest twist of Indian battle

    Amazon.com Inc is taking India’s financial crime fighting agency to court, seeking to quash an investigation into one of its 2019 deals, a court filing seen by Reuters shows.India’s Enforcement Directorate (ED) has for months been probing Amazon’s $200 million investment in India’s Future Group for suspected violations of foreign investment laws.

    The investment is at the centre of protracted legal battles, as Amazon has used the terms of that deal – and cited contract breaches by Future – to stall the $3.4 billion sale of the Indian company’s retail assets to a rival.

    In an 816-page filing, seen by Reuters, Amazon calls the investigation a “fishing and roving” inquiry, saying the ED had sought privileged legal advice and opinions from Amazon and other information not connected to the Future Group deal.

    Multiple Amazon executives, including its India head, had been summoned by the ED in recent weeks and the investigation had caused “unnecessary harassment,” the U.S. e-commerce giant said in its filing to the Delhi High Court on Dec. 21.

    “The directions by the ED asking for disclosure of legally privileged documents and litigation privilege information is derogatory of the principles” laid out in Indian constitution, Amazon said in the filing, which is not public.

    “The investigation is a fishing and roving exercise.”

    Amazon and the ED, which does not make details of its investigations public, did not immediately respond to requests for comment. The case will likely be heard on Thursday.

    The filing is the latest twist in the long-running dispute between Amazon and Future. Though India’s antitrust body suspended their 2019 deal last week, saying Amazon had suppressed information when seeking approvals for it, the ED’s probe is independent of that.

    The dispute centres around three commercial agreements signed between Future and Amazon entities, which a Singapore arbitration panel – also hearing the dispute – has said must be read together when reviewing the transaction.

    Future contends conflating the commercial agreements would effectively mean the deal violated Indian law.

    Amazon’s court filing contained a notice from the ED dated Feb. 19 which sought details of its investment in Future, including copies of agreements, bank account details and other related internal communication.

    It also showed the ED is conducting a far wider probe, and had sought details of big vendors on Amazon’s e-commerce website in India, including sales numbers for those that account for more than 5% of total sales on Amazon.in.

    The notice came after a February Reuters investigation which found Amazon helped a small number of sellers prosper on its Indian platform, giving them discounted fees and using them to bypass foreign investment laws.

    Amazon said at the time it was confident it complied with regulations and that it “does not give preferential treatment to any seller on its marketplace.”

  • Private Advisor Group reels in new investor capital

    LPL Financial’s largest affiliated branch office, Private Advisor Group, said on Friday that Merchant Investment Management had taken a non-controlling minority stake in the firm.

    Merchant Investment Management is a private partnership that invests in growth companies and other opportunities. According to its website, Merchant Investment Management this year has focused on investing in the wealth management industry.

    It is the first outside investor for Private Advisor Group, which is based in Morristown, New Jersey, and has about 700 financial advisers with $30 billion in client assets. The firm recently has been ranked by Barron’s newspaper as a top ten RIA in the country.

    Terms of the deal were not released, but the firm’s CEO, Robert “R.J.” Moore, said in an interview Tuesday morning that Merchant was not buying existing shares from partners, but investing growth capital into the firm.

    That makes this type of investment different from private equity buyers, Moore said.

  • Turkey: Stock trading halted again due to rapid losses

    Turkish stocks extended their losses following Friday’s rout, prompting a fresh automatic trading halt after the lira slid to a record low.

    The Borsa Istanbul 100 Index tumbled 5%, after climbing as much as 3.1% earlier. Trading was set to restart at 4:23 p.m. Istanbul time, according to the bourse’s statement.

    This is the second session in a row that Turkish equities’ trading is halted due to rapid losses. The benchmark plunged as much as 9.1% on Friday, triggering automatic circuit breakers during the second-steepest selloff of the year. The slump was made worse by high levels of margin trading among local investors who have borrowed funds to join a recent rally in stocks.

    Calls on margins “led to snowballing losses” on Friday, turning a price correction into “panic selling,” said Tuna Cetinkaya, assistant general manager at the Info Yatirim brokerage.

    The lira’s 58% decline this year in the wake of 500 basis points of central bank rate cuts has sent local investors flocking to stocks to shield their savings, making Istanbul among the best-performing markets of 2021 in local currency terms, but the worst when measured in U.S. dollars.

    The lira tumbled to another record low on Monday after Turkish President Recep Tayyip Erdogan pledged to continue cutting interest rates, referring to Islamic proscriptions on usury as a basis for his policy.

    Discount grocer BIM Birlesik Magazalar AS underperformed, while telecom operator Turk Telekom was among the only four stocks that gained.