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11/04/2022

The commodity price surge that the world economy is experiencing is the most widespread and longest lasting since the early 1970s. The link between commodity prices played an important role, and rising energy prices affected food prices. On the contrary, the improvement of the role of commodities as alternative financial assets has little systematic impact on commodity prices. Commodity prices are likely to remain at historically high levels and will fluctuate considerably. Unless commodity prices fall sharply, the risk of inflation will remain higher than in the past for some time to come, especially in emerging and developing economies. Many emerging and developing economies still need to adjust to the surge in commodity prices in the previous period, and the risk of core inflation affected by the second round effect still exists. The research shows that the risk of the second round effect mainly depends on whether the monetary policy can stabilize the inflation expectation and the proportion of commodities, especially grain, in the final expenditure. Given that the recent shocks related to commodity markets are more severe and longer lasting than those used in the analysis, the actual inflation results may be worse than expected unless the global economic slowdown intensifies.

04/04/2022

The epidemic has a direct impact on the stagnation of economic activity, the surge of unemployment, the decline of market confidence to the freezing point, and the resulting "red envelope rain" in the world one after another - countries incarnate money printing machines, running at full power to try to rein in the economy running down all the way.
Throwing money is an intuitive and quick way. From the US $1200 check to Japan's 100000 yen cash, from individuals to enterprises, when people have income, they have consumption, and when enterprises have funds, they can operate normally. However, relief cannot save the poor, and the risk of inflation is also rising quietly with the fall of "red envelope rain".
Bitcoin has many similarities with gold in its basic attributes. In fact, Satoshi Nakamoto is a bitcoin designed based on gold, which only transforms it from entity to virtual, from natural mining to logical algorithm generation, and from centralized control to national supervision. Therefore, its complete "decentralization" constitution determines its absolute independence in the crisis and ensures convenience in the process of value storage and transfer.
Due to the current chaotic situation, it is difficult for traditional assets to ensure wealth security, and the hedging demand of the capital market will find a new path. Although "Predators" may not see the value of bitcoin, it does not prevent them from taking out some funds to buy "insurance". But this "small money" is huge money relative to the too-small volume of the coin circle, which is the deep reason why bitcoin broke away from the mainstream and soared to 9500 alone last week.

27/03/2022

According to economic theory, there are three labor factors that can affect the country's long-term potential economic growth rate: population, labor participation rate and productivity. If other conditions remain unchanged, the growth of one of these three factors will increase, and the potential growth rate of the economy will increase.
Due to the problem of economic structure, productivity growth has been very slow in recent years, and the growth of population and labor participation rate has become the core factor of positive GDP growth for many years. The research report shows that productivity is the main engine of major economic growth, but the performance of productivity has been deteriorating since then. This means relying on immigration to achieve economic growth. Therefore, in terms of solving the labor shortage and stimulating economic growth, it will be helpful to introduce more skilled immigrants and overseas students.

20/03/2022

The recent news about inflation has been stimulating our nerves, and the stock market suck up. On the other hand, gold and crude oil show a rising trend without any sign of pause; Investors' pessimism about the market and fear of inflation can be seen. At an inflation rate of 5%, the current purchasing power of cash will be halved in less than 15 years. What should we invest in the face of inflation? Holding money? Buy gold? Or stocks? Cash is the most dangerous asset, and all currencies cannot escape the fate of devaluation. In fact, when investors are happy to hold cash, they actually choose a very terrible long-term asset that will not bring any return in the end. Although gold has soared above $1500 an ounce, it is a typical investment that does not create any value and can only wait for the next person to offer a higher price to take over. Putting all the gold in the world together can make a cube 67 feet long, but this cube is useless. In the same logic, the surge in the smaller art market is not so much investment as speculation. Any investment that cannot generate cash flow is based on the belief that it can be sold to a bigger fool. So what is worth investing in? Money begets money. This is the best way for Pakistan to invest. That is, the third type of investment, that is, something that can be produced and created, such as a farm or a production-oriented enterprise. The traditional thinking that buying stocks can resist inflation was rejected by Buffett more than 30 years ago. "It is no secret that stocks perform poorly like bonds in an inflationary environment", but not all stocks are mired in hyperinflation. Finding them is indeed a challenge for ordinary investors. Investors need to open their eyes to find enterprises that may avoid the negative impact of inflation, which have two characteristics: first, It is easy to raise prices and is not afraid of losing market share or sales volume; Second, as long as a small amount of additional capital expenditure is added, the turnover can be greatly increased.

13/03/2022

The Russian Ukrainian war brought significant downward pressure on the European currency.
In the coming week, we may see a further decline in GBP / NZD. Poor UK economic data and Russia's increased aggressiveness may continue to depress the pound, while strong commodity prices may boost the New Zealand dollar. Although the New Zealand dollar (NZD) is also a risk-sensitive currency, market sentiment related to the Ukrainian crisis has so far had a greater impact on the European currency. The New Zealand dollar (NZD) rose as commodity prices soared. The NZD was also boosted by China's better than expected PMI. As China is New Zealand's largest trading partner, positive economic news from China often supports the "New Zealand dollar". With the past of this week, risk appetite has eased, and global markets are increasingly worried about the crisis in Ukraine. However, NZD shows surprising elasticity. This is partly due to the New Zealand dollar's position as a commodity-linked currency, as some commodities soared as a result of the Russia Ukraine war. Russia and Ukraine are both big exporters, producing commodities such as wheat, metals, crude oil, and natural gas. Commodity prices have been rising as the war disrupted exports, boosting the commodity-linked New Zealand dollar.

06/03/2022

The war launched by Russia against Ukraine and the subsequent severe sanctions imposed by the United States and its allies on Russia have led to drastic fluctuations and crises in the global economy and financial markets. Sanctions have turned the world's supply chains upside down, affecting food, energy and industrial products against the backdrop of a severe inflation crisis, the impact of global travel activities and sharp fluctuations in stock exchanges.
Rising energy and oil prices
Farmers' supply chain problems will increase food costs
Travel restrictions and rising air costs
Stock market volatility
The Federal Reserve raised interest rates quickly
The inflationary pressure on the US dollar has been temporarily eased.

27/02/2022

Recently, the tension between Russia and Ukraine has affected the nerves of global financial markets. With the change of the situation in Russia and Ukraine, the price trend of major global financial assets also fluctuated. At the same time, tensions in Russia and Ukraine have also pushed up the prices of a variety of commodities, including wheat, corn, crude oil, gold, and aluminum. As a representative of risky assets, US stocks fell frequently and the uncertainty increased significantly.
From the current situation, the changes in the situation in Russia and Ukraine are continuing to have an impact on the price trend of major global financial assets. The international crude oil market, the international gold market, and the global capital market have all been impacted. The dollar rose by more than 9% against the Russian ruble. It is expected that the changes in the situation in Russia and Ukraine will continue to affect the price trend of financial assets in the future.
At the same time, it is worth noting that the performance of financial assets is not only affected by geopolitical risk factors but also affected by the current slowdown in the global economic recovery and the tightening of monetary policy by the central banks of some developed economies such as the Federal Reserve.

20/02/2022

The virus is rampant all over the world, and countries have taken various measures to deal with it. Accordingly, it has an important impact on all kinds of enterprises, including the financial industry, and will inevitably lead to all kinds of financial disputes. Analyze and compare relevant legal issues and Countermeasures for financial disputes caused by the epidemic. The traditional business interruption insurance policy covers losses caused by business interruption. Although the virus can not cause physical losses to enterprises, epidemic prevention and control often leads to shutdown, resulting in losses to enterprises. Whether the original insurance can cover this loss has aroused controversy in various countries. The first is the stipulation of the terms of the insurance contract. Taking the United Kingdom as an example, many policies stipulate the exemption clause for specific infectious diseases, such as avian influenza, SARS and hand foot and mouth disease. In addition, other losses caused by infectious diseases listed in the 2010 health security regulations can be compensated. The British government put COVID-19 into the list of infectious diseases in February 2020. Secondly, how the loss occurs will affect whether the claim can be settled. Many insurance policies make it clear that if the government issues control measures due to the prevention and control of infectious diseases, enterprises can be compensated for losses incurred when they stop business. However, before the introduction of compulsory isolation, the British government only advised enterprises to stop business and advised the public not to go to crowded places, resulting in many enterprises stopping business due to insufficient passenger flow, Whether this situation can settle the claim has aroused great controversy. In the UK, many small and medium-sized enterprises have filed a large number of claims for insurance policies, but the insurance industry has disputed and refused to pay compensation, resulting in a large number of policyholders' complaints to the UK financial conduct authority (FCA). On May 1, 2020, FCA announced that it was ready to submit the legal dispute to the court, obtain the statement of the court, and resolve the dispute as soon as possible after judicial characterization. At the same time, FCA hired a well-known law firm to uniformly represent the interests of policyholders and continuously coordinate and negotiate with insurance companies, hoping to solve disputes at a lower cost and avoid individual litigation.

13/02/2022

The impact of COVID-19 on the global economy and the speed and magnitude of the market sell-off caused by it is unprecedented. Although each crisis is triggered by different factors, similar market cycle behavior will occur again. The tactical asset allocation framework of the investment solution team is to find and capture this common behavior. The index balance method we adopt uses data-driven signals and qualitative information, which helps us to be rigorous in the decision-making process and use our previous experience, so as to control different market cycles objectively and discipline. This year's market volatility further highlights the importance of a structured and evidence-based approach and makes us more convinced that in order to correctly assess the evolving market after the epidemic, a flexible and proactive qualitative assessment of high-frequency data is needed.

06/02/2022

As we entered the epidemic period and the shutdown of the economies, there was a huge difference in the performance of the stock markets. Initially, we saw a strong performance from only a small subset of companies, which consisted mainly of growth-oriented technology and e-commerce companies that benefited from the epidemic. At the same time, the more cyclical sectors of the market, such as companies in the energy and financial sectors, experienced greater challenges at the start of the epidemic. As we responded to the epidemic, developed vaccines, and reopened the economy, we saw the latter catch-up and gradually match the early winners. Today, when we look across the stock market, we see a much more equitable landscape with a wide range of investment opportunities.

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