Comment of the Day
Video commentary for November 29th 2022
A link to today's video commentary is posted in the Subscriber's Area.
Some of the topics discussed include: FANGMAN underperforming, MIIN on the cusp of breaking out, China rebounds, India new all-time high, nickel surges, precious metals steady, dollar steadies,
China Uses Police, Censors, Covid Easing to Stem Protests
This article from Bloomberg may be of interest to subscribers. Here is a section:
The softer tone followed unrest over the weekend that was triggered by a deadly fire in the city of Urumqi last week. The protests sputtered Monday night, after Beijing deployed a heavy police presence to clamp down on gatherings. Cities including Shanghai, Hangzhou, Nanjing and elsewhere also saw fewer demonstrations, while censorship of protest-related discussions ramped up across the social media platforms that had been used to vent public anger.
Some concessions have quietly emerged. People who stay home don’t need frequent Covid tests, the state news agency said on Tuesday, a retrenchment from the previous reliance on mass testing to track the virus. The elderly and students taking online classes were exempted from daily tests in Guangzhou.
Government restrictions imposed in Beijing to trace the source of Covid or identify those infected generally must not exceed 24 hours, officials said.
Eoin Treacy's view - China’s government is adopting a carrot-and-stick approach to containing the recent outpouring of emotion on the streets. Vaccinating large numbers of elderly people and quietly circulating information that the Omicron variant is less deadly have been two policies deployed over the last 48 hours. At the same time, the streets have been flooded with police and protestors are being made aware, both publicly and privately that there are costs to challenging the status quo.
Email of the day on reorienting globalisation
I see a third question more related to the protests, not COVID, and I apologize in advance for the potential false equivalency. When comparing Europe's energy situation and the global supply chain / China sourcing situation how will each unfold in future years? Certainly both are heading directions (reversing) that will not turn. Are Europe's hooks deeper into the Russian supply habit or is the global supply chain China habit even deeper?
I am most interested in the impact similarities these two withdrawal themes may have on the West, and the length of time change will take. I have long thought North America "has it all" when you look at materials, labor, and markets.
Eoin Treacy's view - Thank you for this question which raises some important points. The conclusion that Europe is in a more difficult position than North America is clear but nothing is ever so simple.
Europe relied on Russia to supply much of its energy and much of the money spent on imports was recycled through European countries. That is over. Europe now needs to mirror the USA’s success in becoming energy-independent.
India's Free-Market Oasis Aims to Take On Singapore and Dubai
This article from Bloomberg may be of interest to subscribers. Here is a section:
Another product has migrated to the financial center: a popular derivative based on a benchmark gauge of Indian stocks that was traded on the Singapore Stock Exchange. In 2022 the National Stock Exchange of India opened a cross-border trading link with Singapore—similar to the Hong Kong-Shanghai connect—to allow global investors to trade stock derivatives listed on the Indian market without needing to set up shop in India.
Trading volumes have increased since a single regulator, the IFSC Authority, was created by the Indian government in 2020 to streamline approvals and oversight in the special economic zone. In October, average daily turnover on the two stock exchanges in the financial center climbed to $14.6 billion, from $3.4 billion two years before, cumulative derivative transactions by banks jumped to $466 billion, from $22 billion, and cumulative banking transactions rose to $303 billion, from $45 billion.
“Beyond the shores of India, in some of those centers where India-centric business developed, they are able to notice that something is happening, and things may not be the same in the future,” says Injeti Srinivas, the IFSC Authority’s chairman. “Business is gravitating toward IFSC.”
A new international bullion exchange will let qualified jewelers directly import gold to India through GIFT City, a change from current rules permitting only some banks and nominated agencies approved by the central bank to do so. That loosening of restrictions is set to widen the importer base in India, the world’s second-biggest consumer. An aircraft leasing and financing business is operating in GIFT City to tap into the demand of one of the world’s hottest aviation markets for new-plane orders. Ship leasing will start soon.
Eoin Treacy's view - Bull markets thrive on liquidity and so do economies. India has a burgeoning young population. The biggest challenge the government has is growing the economy quickly enough to absorb the productive capacity of that many people. Setting up special economic and financial zones is a vital step in attracting sufficient inward investment to make a difference.
Eoin's personal portfolio: hedge short profits taken, trading short losses taken, investment positions initiated November 10th 2022
One of the questions subscribers ask 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.
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