Comment of the Day
Video commentary for February 23rd 2022
A link to today's video commentary is posted in the Subscriber's Area.
Some of the topics discussed include: Gold firms, oil pause, stocks wither, bonds ease, palladium, grains and industrial resources firm, central bank resolve in raising rates is questionable against this background.
Email of the day on Ukraine
I wondered this morning what you meant when you said on commentary, as regards Ukraine, that, "all other factors aside, these are reasonable demands from a geopolitical perspective".
This comes across as appearing to justify Putin's move. I am sure what you meant to say was that the move might be considered reasonable from Putin's perspective.
That might be true but that doesn't make it right morally: every sovereign nation should be able to decide what their future looks like, not an outsider.
My view - Thank you for this email which raises some important points. First off, I am in no way saying that moving troops into another country is ever morally correct. What I said was the demands are reasonable. The methods used to achieve them are not. The reality is geopolitics seldom has anything to do with morality.
Saudi Al Dawaa Sees Profit Surge After IPO Draws Strong Demand
This article from Bloomberg may be of interest to subscribers. Here is a section:
Saudi Arabian companies raised almost $9.3 billion from share offerings last year, making Riyadh the most active IPO market in the Middle East and Africa behind Israel, according to data compiled by Bloomberg.
The most recent IPO wave has already seen a digital security firm owned by the kingdom’s wealth fund draw about $57 billion in orders from institutional investors. Al Dawaa’s IPO attracted demand of more than $25 billion ahead of its retail offering.
The firm operates a network of pharmacies with over 800 outlets across 130 cities in Saudi Arabia. It posted a revenue of about 5 billion riyals ($1.3 billion) and profit of 246 million riyals in 2020 compared with 4 billion riyals and 233 million riyals year ago, respectively.
More from the CEO:
Estimates Al Dawaa’s profit to rise by “not less than 15-20% a year” after 2022
“Will continue paying dividends of around 50%-60% of profit on a continuous basis”
My view - One of the defining characteristics of Middle Eastern stock markets is companies are only allowed to list when they have three-years of continuous profits. When global interest rates are low and investors chase momentum in growth stocks, that’s not especially appealing. On the other hand, when rates rise and a premium is put on the predictability of cashflows, those characteristics make some emerging markets more appealing.
Intel Chip Challenges Reign of China's Bitcoin-Mining Firms
This article from Bloomberg may be of interest to subscribers. Here is a section:
Bitcoin mining, which is earning rewards in Bitcoin by using computers to secure the cryptocurrency’s network, has become a lucrative business amid the surge in the price of Bitcoin in recent years, enriching the rig makers along the way. The mining industry raked in $15 billion in revenue in 2021, more than double the previous year, according to research from The Block.
Intel’s entry could weaken the Chinese manufacturers’ pricing power and offer better maintenance services given the company’s close proximity to the miners in North America, industry participants said. The region dethroned China as the world’s Bitcoin mining hub as Beijing banned crypto mining last May.
“Having a U.S.-based manufacturer with the size, scale and credibility like Intel is fantastic for the entire crypto industry,” said Dave Perrill, chief executive of Eden Prairie, Minnesota-based Compute North, which provides Bitcoin miners with data centers to operate their machines. “Competition is a good thing.”
My view - NVidia has prospered because GPUs are deployed in mining cryptocurrencies. That has been one of the primary factors in supporting the outsized valuation for the company despite the fact its primary business is in gaming and datacentres. Intel directly exploring the market for crypto mining, as well as launching its own suite of GPUs last month is an attempt to steal market share.
The Chart Seminar 2022
With global vaccination rates rising, the prospect of anti-COVID pills on the horizon and the promise of travel restrictions being dropped, it is time to start thinking about venues for The Chart Seminar in 2022.
Please drop sarah@fullertreacymoney.com a line if you would be interested in attending an event next year, as well as your preferred location.
At present I am looking at a late May date for a London seminar and I am open to other times and locations subject to demand.
Eoin's personal portfolio: short reopened February 2nd 2022
One of the questions subscribers as most often is how to find details of my open trades. To make it easier I will simply repost the latest summary daily until there is a change.