- New opportunities with some Russian shares
On 11 and 12 July, the NATO summit will take place in Vilnius. There it will be discussed whether and when Ukraine should be admitted to NATO. In addition, the rearmament request for all NATO countries will be justified with the “enemies” Russia and China. Ukraine’s first large-scale attack has not been particularly successful so far. But Selenskyj is now demanding cluster munitions, which the USA also wants to send, and above all more medium-range missiles to be able to attack Russia’s supply routes directly. However, this could mean that Russia will also attack the supply routes in Poland directly. In any case, the anxious question now arises whether this NATO summit will not also bring World War 3 closer. It is urgent time for diplomatic negotiations, otherwise a point of no return will be reached, making diplomatic negotiations impossible and conjuring up a 3rd world war.
In the first half of the year, 10 stock exchanges from Eastern Europe were among the top performers on the world’s stock markets, with the Warsaw Stock Exchange leading the way with a 20 per cent gain in the PTX index. Russian shares are still not tradable on Western stock exchanges due to mutual sanctions, but some Russian shares will soon be tradable again over the counter via the broker Zerich Securities Ltd. from Cyprus. One example is the Russian consumer chain Fix Price, which made an IPO on the London Stock Exchange before the war. But before that, an account has to be opened, which can easily be done at this link: https://trade.mind-money.eu. In addition, the Russian gold and silver producer Polymetal can now be bought at rock-bottom prices on the AIX exchange in Kazakhstan through the broker Freedom Finance (or Freedom Broker). Polymetal is to be delisted on the London Stock Exchange by 17 July. An account with Freedom Broker can be opened quickly online via this link: https://freedom24.com/invite_from/2952896.
Andreas Männicke also gives his assessments of the new opportunities in his stock market letter EAST STOCK TRENDS (www.eaststock.de) and in his new EastStockTV video, episode 214 at www.YouTube.com.
Ukraine wants to join NATO as soon as possible
On 11/12 July, Ukraine’s accession to NATO will be discussed, but also how to help Ukraine to a military victory through further arms deliveries. It has already been decided to send FH16 fighter jets in autumn, with pilot training taking place on Polish soil. In addition, however, medium-range missiles capable of destroying Russia’s supply routes are now to be sent.
Attack on Zaporizhzhya nuclear power plant possible
However, this will further increase the potential for escalation in the Ukraine war in the summer/autumn. There is already a danger that Europe’s largest nuclear power plant in Zaporizhzhya will be damaged by a military attack, with both sides claiming at the moment that this is being prepared. This could then already trigger the NATO state of emergency, even if Ukraine is not yet in NATO. But then we would not be far away from a 3rd world war. Moreover, every NATO country is now supposed to rearm enormously and allocate at least 2 per cent of GNP to military spending.
The USA crosses more “red lines”
The arms lobby will be happy about new orders, but the money will be lacking in many other places. The question also arises as to whether the rearmament policy repeatedly demanded by the USA makes world peace more secure or whether this only serves to prepare for a third world war. The USA now wants to supply the old stockpiles of cluster munitions banned by 100 nations, which should be outlawed at the NATO summit. But since the USA is setting the tone at the NATO summit, there will probably be no criticism of this.
Equally reprehensible, but accepted without criticism, is the supply of uranium-containing tank ammunition, which the British have already done, but which the USA now also wants to do. This crosses old “red lines” just to help Ukraine to victory. The constant stoking of enemy images (Russia/China) also harbours the danger of escalation and is in no way conducive to peace. Significantly, the USA, Russia and Ukraine have not joined the decision to ban the use of cluster munitions, the so-called Oslo Accords. 123 states including Germany have signed the Convention against Cluster Munitions, which has been in force under international law since 2010. This success was decisively shaped by the International Coalition against Cluster Munitions (CMC), which achieved a ban treaty in 2008.
Double standards
And again and again, double standards: the USA itself rejects the International Criminal Tribunal in the Hague, but supports the conviction of Putin as a war criminal. However, the war crimes committed by the USA in many military operations, including in Iraq, remain unpunished. Turkey has still not agreed to Sweden joining NAT. This, too, will certainly be a topic of discussion at the NATO summit. But the image of China as an enemy will probably be further fuelled at the NATO summit and warnings of a Taiwan conflict will be issued. China now wants to strive for military cooperation with Cuba and position itself there, which is not likely to please the USA at all. The Cuba crisis in October 1962 remains unforgotten, which almost triggered a nuclear war due to Soviet medium-range missiles.
Ukraine war could weigh on world stock markets in case of escalation
So far, the world’s stock markets have reacted more to the economic data and the decisions of the central banks, with prices recently falling somewhat. However, if the Ukraine war escalates to the extent that NATO intervenes directly in the conflict – it has been doing so indirectly for a long time – and the danger of a third world war approaches, Ukraine will again become relevant for the stock markets. In this respect, too, one can only hope that the peace plans of China, the BRICS states and the African countries, which also addressed Putin at the St. Petersburg Economic Forum, will be heard more and that more room will be created for diplomatic negotiations.
Wagner Group in waiting position
The longer the war continues, the weaker Selinskyi’s position becomes, but also that of Putin. Pushing the Russians out of Ukraine would probably trigger a second coup attempt against Putin, which would then also be successful. It will also be interesting to see what orders the Wagner Group will soon receive. Quite a few experts assume that the Wagner Group will later attack Kiev from Belarus in order to tie up Ukraine’s military forces there. Kiev is only 100 km from the Belarusian border. Belarusian President Lukashenko has been warning of the danger of a 3rd world war for some time and he is pleading for an immediate ceasefire or at least the start of diplomatic negotiations before there are insoluble conflicts.
Outperformance opportunities in Eastern Europe: Poland +20 percent!
In the first half of the year, investors can be very satisfied with the performance of stocks. The DAX achieved a plus of 14 percent, the S&P index of 16% percent and the NASDAQ index of over 34 percent, whereby the NASDAQ was especially pulled up by stocks with the fantasy theme of AI, i.e. “artificial intelligence, such as Microsoft. Meta and especially Nvidia. The DAX corrected by 3.5 per cent last week, so that it is now “only” up 10 per cent. But investors in Eastern Europe should be very satisfied with the first half of the year. 10 stock exchanges from Eastern Europe were again among the best-performing stock exchanges in the world, with the indices from Poland and Croatia leading the way with over 20 per cent each. But also the CECE index (with Poland, Hungary and the Czech Republic in the boat) was able to gain almost 20 per cent and thus far more than the DAX.
New “bargain hunting” in Russia selectively possible again via Zerich Securities Ltd.
Russian shares are still not tradable on Western stock exchanges because of the sanctions, but nevertheless there are some new opportunities for very risk-averse investors. For example, the broker Zerich Securities Ltd from Cyprus now offers Gazprom bonds as well as some Russian shares at discount prices over the counter. However, investors would then have to wait for the war to end before selling again. A Russian share that can now be bought at discount prices is, for example, the consumer chain Fix Price, which dared an IPO in London before the war and is now suspended from trading there. But Yandex, Ozon and TCS Group will also have off-market opportunities to buy and sell their shares. However, it is only possible to buy the shares if you open an account with Zerich Securities Lt beforehand, which is easy to do online at https://trade.mind-money.eu.
Polymetal cheaper than ever
A good alternative now is to buy shares in the Russian gold and silver producer Polymetal, which is now also listed on the AIX in Kazakhstan. Polymetal is to be delisted on the London Stock Exchange by 17 July. Investors can now buy this share very cheaply in Kazakhstan at a price of USD 2.7 through Freedom Broker. The share is worth more than twice as much on the Moscow Stock Exchange, which now opens up a doubling opportunity in the medium term. However, the prerequisite here is also the opening of an account with Freedom Broker, which can easily be done under the following link: https://freedom24.com/invite_from/2952896.
New IPO Opportunities via Freedom Broker
Freedom Broker also allows investors to participate in IPOs on NASDAQ. Most recently, the Korean restaurant chain GEN (ISIN: US36870C1045N (ticker ENK.US) was floated on the NASDAQ stock exchange, followed by the pharmaceutical stock INTS (ISIN US45828J1034, ticker INTX.US), each of which saw price gains of 10 to 20 percent in just a few days. This is another reason to open an account with Freedom Broker, besides the interest rates of 3 percent on a USD account and 2.5 percent for a €-based trading account. Both brokers can also help you if Russian shares become tradable again or if you still have questions about Russian ADR and receiving dividends.
First inform, then invest
But there are also new opportunities in Eastern Europe in general, where there are always outperformance opportunities. Inform yourself now in detail about the background and the development of the Ukraine/Russia crisis but also about the future recovery potential of undervalued shares from Eastern Europe. There are also new opportunities in the Baltic States, Kazakhstan, Georgia and Ukraine.
The PTX index for shares from Poland has already risen by 21 percent this year, the BTX index for shares from Bulgaria by over 12 percent and the CROX index for shares from Croatia by 20 percent. So even after the Ukraine war, it is still worth looking beyond the horizon to Eastern Europe.
Order now a trial subscription (3 issues by e-mail for only 15 €) of the monthly stock exchange letter EAST STOCK TRENDS (EST) with another Ukraine/Kazakhstan/Russia special and a dividend/bond special as well as with a lot of background information and new investment suggestions such as the “Stock of the Month” and lucrative certificates at www.eaststock.de, there under Stock Exchange Letter. The next EST will be published in June 2023 with a special on Kazakhstan and Russian ADR/Russia.
TV/radio notes: The last radio interview was on 2 March 2023 and previously on 31 October on Börsen Radio Networks. The next radio interview is on 2 October 2023 Stock Exchange Radio Networks. Also watch the latest EastStockTV video on YouTube about the Ukraine war and the new outperformance opportunities for Eastern European stock markets. You can download the interviews and videos at www.eaststock.de, there under the heading “Interviews” as well as the videos of EastStockTV. By the way: have you already subscribed to the EastStockTV YouTube channel?