- G20 summit in disarray –
At the G20 summit on 18-19 November in Brazil, Joe Biden’s surprising decision to now also authorise the firing of American intermediate-range missiles called ATACMS at Russia was the dominant topic, at least behind the scenes, with many of the presidents present there not at all satisfied with Biden’s decision. The African Union was also invited for the first time, and it was also very critical of Biden’s decision. Many African countries have long been considering joining the BRICS because they want a just, multipolar world order and not one dominated by the United States. They also see the United States as partly responsible for the war in Ukraine through NATO’s eastward expansion and its ‘co-opting’ of Ukraine since the 2014 coup.
The world’s stock markets have not yet reacted to the new threat of escalation in Ukraine and Israel. All the talk on Wall Street is about Nvidia’s good but controversial numbers, not the increasing geopolitical dangers. The stock markets in Eastern Europe have also remained stable so far and some of them have even managed to outperform, although Putin is threatening to use supersonic missiles against those countries that authorise the use of medium-range missiles, including the UK with its Storm Shadow missiles, one of which has already reached Russia. In Germany, this could now become an election issue, as Merz and Lindner are in favour of using Taurus missiles, but Scholz still isn’t.
The stock markets in Eastern Europe also continue to be very encouraging, especially the Balkan region (Serbia +34%, Slovenia +31%), Hungary +(27%) and Kazakhstan (+32%) as a good alternative to Russian equities. But Ukraine (+25%) could also become a very interesting investment country after the war. Investors willing to take risks can purchase shares in Kazakhstan directly online from the broker Freedom Finance (Freedom Broker) in Cyprus, provided they have previously opened 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 241 at www.YouTube.com. You can also register for free with the new BRICS TV channel on YouTube and subscribe to the new BRICS Trends stock market letter at 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.
G20 summit divided over Ukraine war
The G20 summit on 18-19 November showed once again that Russia is not isolated, as the West, and in particular the USA, has always sought to be. In the final declaration, Russia was not condemned as solely responsible for the war in Ukraine, as the USA and the UK would have liked, because many presidents of other countries see it quite differently. Many countries at the G20 summit feel more connected to the BRICS countries. At the G20 summit in Brazil, the unexpected decision by Joe Biden to authorise the launch of American medium-range missiles directly at Russia, which the UK immediately joined, was the focus of discussions. Many presidents are against Joe Biden’s bold decision because it could lead to a new, threatening escalation or even to a 3rd World War.
US President Biden opened Pandora’s box and created a major escalation risk.
Joe Biden has now decided to use American ATAMCS against Russia, opening Pandora’s box because Putin now also wants to deploy 10,000 soldiers from North Korea to retake the Kursk region. Great Britain and France already approved the delivery of medium-range missiles to Ukraine, only German Chancellor Scholz does not want to take this risk of escalation with the Taurus missiles. A British Storm Shadow missile has already killed 13 North Korean soldiers, which has now angered North Korean President Kim. North Korean President Kim is now ready to send as many as 100,000 soldiers to Russia.
Chancellor Scholz maintains his opposition to the delivery of Taurus missiles to Ukraine.
At the G20 summit, Chancellor Scholz confirmed that he continues to oppose the deployment of Taurus missiles for precisely this reason, while Chancellor candidates Merz and Lindner are in favour of the deployment of medium-range missiles. The majority of the population in Germany is against the deployment of medium-range missiles against Russia because this could have a boomerang effect. However, 13 soldiers have already died and many have been injured in North Korea due to a British Storm Shadow missile. Macron has now also officially approved the delivery and firing of French medium-range missiles at Russia, adding fuel to the fire just like Joe Biden.
This could now even become a significant election campaign issue, where Scholz could profile himself as a ‘peace chancellor’. Many people in Ukraine are now also in favour of negotiations because the unnecessary deaths of people at the front must finally come to an end and the Ukrainians finally want to live in peace. There are also hopes that Trump, after his swearing-in on 21 January, can actually bring about a ceasefire and peace in Ukraine. Until then, however, the mutual firing of medium-range missiles could still be dangerous and very bloody for both sides.
Putin threatens to strike back at the West
Putin has now made it clear that he is targeting those countries that authorise the firing of medium-range missiles at Russia with his new hypersonic missiles, namely the United States, the United Kingdom and France. Putin already sees himself at war with the UK, which vehemently supports the deployment of British Storm Shadow medium-range missiles. Six American ATAMCS and a British Storm Shadow have already attacked ammunition depots, mainly in the Kursk region, although most of the missiles were intercepted. However, a number of North Korean soldiers have already died in the Kursk region.
Putin reacted immediately by sending a hypersonic missile of the Orschink type to the city of Dnipro for the first time to destroy an ammunition depot there. Selinskyi said. Putin now wants to use Ukraine as a ‘testing ground’ for his new Orschink hypersonic missiles, which supposedly cannot be intercepted by any missile defence system. He called for a corresponding reaction from the West. Putin, for his part, has declared that he will now have a whole series of Orschink missiles made ready for combat.
Putin wants to create new facts by the time Trump is inaugurated.
Putin also made it clear in an address that he now has the right to target all countries that allow medium-range missiles to be fired directly into Russia with his new hypersonic missiles, which could also be equipped with nuclear warheads. Putin sees Russia’s very existence as threatened. Putin is therefore threatening to use nuclear weapons again if the West continues in this way. We have not been this close to a Third World War for a long time! We can only hope that Putin waits until 21 January 2025 and then initiates peace talks with Trump and Selinskyi. But a lot can happen before then, which is probably also the calculation of Joe Biden shortly before the end of his term in office, after which he will have nothing more to say. But Putin will try to create new facts in his favour by 21 January, i.e. to regain the region of Kurs and to advance further in the Donbas region.
Netanyahu convicted as a war criminal
But the war in Israel could also escalate further, as Israel continues to bomb civilian installations in Gaza, where many innocent families are dying, which is madness and a war crime. The International Court of Justice in The Hague has finally, after a long and thorough investigation, officially issued an arrest warrant for Israeli Prime Minister Benjamin Netanyahu and former Defence Minister Yoav Galant for obvious war crimes. Netanyahu does not recognise the arrest warrant. In his opinion, he supports Hamas terrorism and is allegedly ‘anti-Semitic’. The USA does not want to recognise the arrest warrant, nor does Hungarian President Orban, who has now even invited Netanyahu to Hungary.
Trump could escalate the Iran conflict
Since Trump is a friend of Netanyahu, he will not recognise the arrest warrant either. Under Trump, the conflict with Iran will intensify. Trump wants to prevent Iran from being able to build nuclear missiles at all costs. Therefore, he wants to bomb the nuclear facilities if necessary. He does not want to jeopardise the existence of Israel. Next year, we may see a new conflict here, but also with China due to his rigid customs policy, as he wants to increase tariffs on Chinese products by 60%.
Global stock markets are reacting calmly.
So far, the world’s stock markets have ignored the increasing geopolitical risks and the risks associated with a change of power due to Trump, although bond yields in the US have already risen sharply following Trump’s election victory, which is exacerbating the US debt problem and reducing the financial leeway for the new Trump administration, some of whose members have questionable track records, next year. Tesla shares rose by as much as 40% after Trump’s election victory, but all seven ‘magic US stocks’ rose sharply.
Nvidia with new impressive record figures, but…!
The new business figures of US companies were the subject of heated discussion on Wall Street last week, with the new record revenues and profits of Nvidia receiving particular attention. A few days ago, Nvidia rose to a new all-time high of almost USD 150 and, with a market capitalisation of USD 3.6 trillion at its peak, is now by far the most market-heavy company in the world. Nvidia’s profit rose by a remarkable 109 per cent quarter-on-quarter to USD 19.3 billion, which exceeded expectations, yet the stock market reacted very calmly with only slight price losses.
With a price-earnings ratio of over 50, Nvidia is not exactly cheap either. There are also rumours that the figures have been partially embellished, as future claims or orders are already being declared as sales and profits. Some even think that this is a second ‘Enron case’, but so far this has not affected the price. The price has already tripled this year. But the company that earns the most in the world is still Saudi Aramco, with annual profits of USD 150 billion. However, Saudi Aramco has a market capitalisation of ‘only’ USD 1.7 trillion, which is about the same as all 40 DAX companies combined.
Cryptocurrencies are going through the roof because of the ‘Trump trade’
After Trump’s election victory, not only did the US stock indices rise to new all-time highs, but so did the Bitcoin. Since Trump also relies on cryptocurrencies through his advice to Elon Musk and wants to make the USA a ‘Bitcoin country’, the Bitcoin rose to a new all-time high of over 100,000 BTC/USD, which represents an increase of 165% in one year. By contrast, Ethereum has not risen as sharply as Bitcoin, with Ethereum ‘only’ rising 65% in one year to USD 3276. Solana even rose by 343% in one year to USD 252.
But the most significant increase among the market-heavy cryptocurrencies was that of Ripple, which rose by 158% (!) from 0.55 to 1.43 USD since Trump’s election victory, simply because Ripple’s board met with Trump for a discussion, but not because of new, innovative applications. This year, thanks in part to the Trump trade, many new crypto millionaires and even a few new crypto billionaires have been born. On the other hand, $1.2 billion was lost this year to crypto fraud, mostly using the Ethereum blockchain.
Wall Street stable near all-time highs
The S&P index has already risen by 26% to 5965 index points this year and the NASDAQ Composite Index by 28.7% to 18,944 index points. On Friday, Wall Street also trended favourably and pulled the DAX up with it, which, at 19,322 index points, managed a plus of 15.2% since the beginning of the year. The EuroStoxx50, however, rose by only 6.1% to 4789 index points. As in the previous year, however, some stock markets in Eastern Europe performed significantly better.
Some Eastern European stock markets clearly outperform the DAX
If Trump’s peace initiative is successful, the Ukrainian stock market in particular will have a lot of recovery potential with a proverbially bombed-out price. The UTX index for Ukraine equities has already risen by 25 per cent this year. Equities from Serbia have even risen by 34 per cent since the beginning of the year, with equities from Kazakhstan up 32 per cent and equities from Slovenia up 30 per cent. But stocks from Romania and Croatia also pleased investors with a gain of 12 per cent. The SETX index for equities from Southeast Europe is still up by 19% as of 21 November. The CECE bank index for banks from Eastern Europe is also up by 18%. Only the Warsaw Stock Exchange has been very weak so far and is slightly in the red. The shares of the Budapest Stock Exchange also surprised with a year-to-date gain of 19% in euros and 27% in forints, and the Prague Stock Exchange with a gain of 17%, all of which outperformed the DAX by 15.2%. 5 stock exchanges in Eastern Europe have already clearly outperformed the DAX again.
Freedom Broker offers market access to Kazakhstan
You can also buy shares from Kazakhstan directly online through the Cyprus-based broker Freedom Finance, which has the advantage of quickly getting the sometimes very high dividends into your portfolio. For example, Halyk Bank even has a dividend yield of 16% and a return on equity of 34%. But with Freedom Broker, you can also get interest rates of over 8% on your USD savings account and over 6% on your euro savings account. It is easy to set up a counter-account online using the following link: https://freedom24.com/invite_from/2952896 If you need advice on exchanging Russian ADR for original shares, Freedom Broker, which also has a branch in Berlin, is also the right place to go. In addition, Russian ADRs can be selectively purchased at discount prices over the counter.
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 to Eastern Europe.
So order a trial subscription now (3 issues by email for just €15) of the monthly market letter EAST STOCK TRENDS (EST) with another 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 18 October 2024.
TV/radio references: On 5 February 2024, Andreas Männicke was interviewed by Carola Ferstl in Money Talk about gold, commodities and the new opportunities in Eastern Europe. All radio and TV interviews can be downloaded from the video archive at www.eaststock.de, including the latest video in EastStockTV, episode 241. By the way: Have you already subscribed to the new YouTube channel – BRICS-TV, in addition to the YouTube channel EastStockTV?
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 Exchange webinars and BRICS webinars, please also register.
You can now also subscribe to Andreas Männicke’s free newsletter with the latest news on the world and Eastern stock markets and on the BRICS at www.eaststock.de.