- Invest in Ukraine now –
The so-called ‘Trump trade’ has recently caused a stir on Wall Street and in cryptocurrencies such as Bitcoin, which rose to over 100,000 BTC/USD at its peak, and especially in Ripple, which more than tripled. Tesla in particular went through the roof with an 80% increase in price since Trump’s election victory. The S&P 500 has risen 15% since Trump’s election victory to new all-time highs. Records upon records. Now, however, many investors are wondering whether the high expectations placed in Trump and Musk will be met next year.
What many investors have not yet reckoned with, and have not taken advantage of, is the realistic possibility that Trump will manage to bring about a ceasefire and peace in Ukraine next year. If this should be the case, the proverbially bombed-out stock prices in Ukraine are likely to skyrocket. This year alone, the MSCI Ukraine Index rose by over 60%, making it one of the top performers among global stock market indices.
Risk-seeking investors can purchase shares in Kazakhstan directly online from the Cyprus-based broker Freedom Finance (Freedom Broker) by opening an account there, which is easily done via the following link: https://freedom24.com/invite_from/2952896 .
Andreas Männicke also gives his assessments of the new opportunities in Eastern Europe in his stock market letter EAST STOCK TRENDS (www.eaststock.de) and in his new EastStockTV video, episode 243 at www.YouTube.com. You can also register for free with the new BRICS TV channel on YouTube and order the new BRICS Trends stock market letter by emailing info@eaststock.de. You can watch the first BRICS TV video here: https://www.youtube.com/watch?v=FEKI72GKCzs&t=315s Please also register if you are interested in receiving the new BRICS newsletter. You can also read an introduction to the BRICS topic in VTAD News No. 42 and/or request it by emailing info@eaststock.de.
The Trump trade led to new records
The last two years will go down as one of the best years for the stock market in history. Most recently, the election victory of Donald Trump as the new US president has led to new records on Wall Street and for cryptocurrencies. Valuations in the technology sector are now particularly high. Tesla has a price-earnings ratio (P/E) of 200. The market is now clearly overvalued and is crying out for a correction, which may not come until next year.
Before Trump’s election victory, it was mainly AI stocks such as Nvidia and, more recently, ‘quantum computer stocks’ that attracted attention and shot from record high to record high, raising the serious question of whether the high expectations for the future will be met.
But the same question must be asked about Trump and Musk, and if the high expectations are not met, there is a risk of severe disappointment and price losses next year. It is more likely that Trump will trigger a trade war with China or even with all BRICS countries next year as a result of his aggressive tariff policy, which could damage world trade and cause more inflation in the US.
Great opportunities in Eastern European stock markets
Unnoticed by most investors is the fact that, as in the previous year, nine stock markets in Eastern Europe are among the top 30 performing stock markets in the world this year. Last year, the Central Eastern European stock markets in Poland, Hungary and the Czech Republic were particularly convincing as outperformers, with a performance of over 40%. This year, it was mainly the stock stock market indices in the Balkan region, with price increases of over 30% in Slovenia, Croatia and Serbia, and also over 30% in Kazakhstan.
Federal Chancellor Scholz now wants to make a name for himself as the ‘Peace Chancellor’ in the election campaign.
Chancellor Scholz has now flown to Selinskyi in Ukraine to sound out and discuss the conditions under which Selinskyi would be willing to enter peace negotiations with Putin. It can be assumed that he will also go to Putin again to then distinguish himself in the election campaign as the ‘Peace Chancellor’. But one thing should be clear. The end of the war will be decided in the US, Ukraine and Russia. The EU and Germany are only supporting actors with an insignificant guest role.
Is Trump Trade 2.0 coming?
If Trump manages to strike a deal with Putin that ends the war in Ukraine, stock prices in Ukraine in particular should benefit. This could become the ‘Trump trade 2.0’, which could lead to even bigger price jumps than on Wall Street after Trump’s election victory. This is because over USD 100 billion will then flow into Ukraine to rebuild the country. However, the Warsaw Stock Exchange could also benefit from this, having been an underperformer this year and is still in the red.
Banks in Eastern Europe outperform
These banks from Central and Eastern Europe rose particularly sharply. The CECE Banks Index has already risen by 25% this year. Raiffeisenbank International from Austria was able to sell Prior Bank in Belarus shortly before Christmas. The share price then rose by 10% to a new annual high, giving investors a nice Christmas present. The assets in Russia have not yet been sold, but if Trump makes a deal with Putin via Selinskyi and thus creates peace in Ukraine, the US sanctions against Russia could be lifted. Then the transfer of money from Russia to the EU could be made possible again.
It will also be interesting to see which countries will still be buying gas from Russia next year when transport via the Ukrainian pipeline is no longer possible. Above all, Hungary, Austria and Slovakia are affected and are looking for solutions. The Austrian oil company OMV is now finally pulling the plug on the Gazprom deal. The exchange rate rose as a result. After the US imposed sanctions on Gazprombank, the ruble exchange rate initially collapsed because Gazprom‘s gas transactions are financially settled through Gazprombank. Now the ruble exchange rate is stabilising again at 110 EUR/RUB. Russia requires the ruble to be used as the means of payment for gas purchases.
Ekosem-Agrar bonds see sharp price drop
As a result of the mutual sanctions, Russian depositary receipts, i.e. ADRs and GDRs, have not been tradable since March 2022. But the two bonds issued by Ekosem-Agrar GmbH also came under pressure because no more money could be transferred from Russia. Ekosem Agrar, a German limited liability company, is one of the largest milk producers not only in Russia, but also in Europe, with over 600,000 hectares of agricultural land in Russia.
Ekosem Agar GmbH’s bond prices fell from over 90 to 10 at the low point after the sanctions, but rose sharply by over 20% in just a few days shortly before Christmas because the GmbH shares were sold to a major investor from Kazakhstan. The bonds are now to be paid out to bondholders next year at €300 for every €1000 of nominal value. It will be interesting to see whether the money transfer works. This was also a nice Christmas present for investors who bought the two bonds at prices of 10 to 20. The bonds are still listed on German exchanges. It will be interesting to see whether the war will also reopen Moscow as a financial centre for the West, although this will also depend on the EU’s behaviour.
Ukraine as one of the top performers among the world’s stock markets – next year, too?
By contrast, despite the ongoing war, Ukraine advanced to become one of the top performers among all world stock markets. The MSCI Ukraine Index, which covers 85% of all stocks in Ukraine, rose by over 60%. In particular, after Trump’s election victory, some Ukrainian stocks that are also listed on foreign exchanges, such as the agricultural company Astarta Holding or the iron ore producer Ferrexpo. Here, ‘advance bets’ are already being made that the war can be ended by Trump in the first half of next year.
After that, over €100 billion will flow into the country to rebuild it. This could mean an extraordinary opportunity for investors. But for the time being, it is still very risky and speculative, especially since Ukrainian equities are very small and illiquid anyway. However, the Trump trade 2.0 has already started in the run-up to the negotiations, because the stock market always looks to the future.
Freedom Broker offers market access to Kazakhstan
The KTX Local Index for Kazakh stocks has already risen by 30 per cent this year. You can buy Kazakh stocks directly online through the Cyprus-based broker Freedom Financ, which has the advantage of quickly crediting the sometimes very high dividends to your account. For example, Halyk Bank even has a dividend yield of 16% and a return on equity of 34%. The world’s second largest uranium producer, Kazatomprom, could benefit from Russia stopping the export of uranium to Russia next year. A counter-opening is easily possible online at the following link: https://freedom24.com/invite_from/2952896 If you still need advice on how to exchange Russian ADR for original shares, Freedom Broker, which also has a branch in Berlin, is also the place to go. In particular, if the US sanctions are lifted, trading opportunities on the Moscow stock exchange may arise again, but this remains to be seen.
Inform yourself first, then invest
Find out more about the background and development of the Ukraine/Russia crisis, but also the future recovery potential of undervalued Eastern European equities. There are also new opportunities in the Baltic states, Southeast Europe and the CIS republics (Kazakhstan, Georgia), with the respective stock indices all up in 2023. In 2023, 12 stock markets from Eastern Europe were among the 30 best-performing stock markets in the world, with 5 clearly outperforming the DAX. In 2024, 9 stock markets in Eastern Europe outperformed again with a strong plus. So it’s still worth taking a look beyond your own backyard at Eastern Europe.
So order a trial subscription now (3 issues by email for just €15) of the monthly market letter EAST STOCK TRENDS (EST), which includes a further Ukraine/Kazakhstan/Russia special and a dividend special, as well as a lot of background information and new investment suggestions such as the ‘share of the month’ and lucrative certificates at www.eaststock.de, there under Börsenbrief. The last EST appeared on 27 December 2024.
TV/Radio Notes: On 5 February 2024, Andreas Männicke was interviewed by Carola Ferstl on Money Talk about gold, commodities and the new opportunities in Eastern Europe. On 5 December 2024, Andreas Männicke was interviewed by Heinrich Leben on Börsenradio Networks about the new opportunities in Eastern Europe, particularly in Ukraine after the end of the war. All radio and TV interviews can be downloaded from the video archive at www.eaststock.de, including the latest video on EastStockTV, episode 243. By the way: Have you already subscribed to the new YouTube channel – BRICS TV, in addition to the EastStockTV YouTube channel?
Reading note: in the new issue of VTAD News No. 42, Andreas Männicke provides a detailed report on BRICS as a new investment opportunity.
Seminar note: If you are interested in new Eastern Exchange seminars ‘Go East’ or a BRICS seminar in Frankfurt/M or other cities, please contact the EST editorial team (www.eaststock.de ). If you are interested in Eastern stock market webinars and BRICS webinars, please also register.
You can now also order the free newsletter from Andreas Männicke with the latest news about the world and Eastern stock markets and the BRICS at www.eaststock.de. Please also register at info@eaststock.de if you are interested in a new BRICS newsletter from Andreas Männicke.