- Eastern European stock markets are booming –
US President Donald Trump is causing new excitement almost every day, either with new decrees or new tariffs. The 25% increase in tariffs for Canada and Mexico has been suspended for a month, but the 10% increase in tariffs on China has been maintained. China reacted angrily with counter-tariffs of 15% for oil and gas imports from the US. But be careful: if you annoy China too much, a trade war could turn into a real war over Taiwan before the end of the year. Trump now also wants to take over the Gaza Strip and turn it into a holiday paradise. But he also wants to resettle 2 million Arabs there, which Jordan and Egypt are not willing to go along with. He is also threatening to wipe out Iran. Trump has already managed to get rid of the Panama Canal toll for US ships.
As for the war in Ukraine, Trump has a plan to end the war by coming to an agreement this spring. It remains to be seen whether this can be achieved so quickly. At the security conference in Munich from 16 to 18 February 2025, the new US plan is to be presented by special envoy Keith Kelogg. If Trump actually succeeds in ending the war in Ukraine this year, equities from Ukraine in particular, but also from Poland, should benefit. That would be the ‘Trump Trade 2.0’. Already, equities in Ukraine rose by 37% and in Poland by 16%, far more than the DAX with +8.8%.
But the KTX Local Index for equities from Kazakhstan has already risen by more than 30% last year and by 4% this year. Kazakh shares are a good alternative to Russian shares, which could also be discussed again after the end of the war in Ukraine and, above all, the end of US sanctions. Investors willing to take risks can purchase Kazakh shares directly online from the broker Freedom Finance (Freedom Broker) in Cyprus, provided they open an account there first, 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 246 at www.YouTube.com. You can also register for free with the new BRICS TV channel on YouTube and order the new stock market letter BRICS Trends by emailing: info@eaststock.de. You can watch the second BRICS TV video here and subscribe: . 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 number 42. Here is the link: https://www.vtad.de/wp-content/uploads/2024/11/vtad-news-42.pdf
Trump cleans up at USAID in the USA
The new US President Donald Trump is now making headlines almost daily, keeping the world and investors on tenterhooks. Trump is also cleaning up in the USA and, via Elon Musk, is having thousands of government officials in various agencies fired. According to Trump and Musk, the US development agency USAID is a swamp of corruption and bribery. Of the more than 10,000 employees, only 380 are to remain. It is also alleged that Ukrainian media outlets have been supported with USAID funds, which are now supposedly facing closure. US singers and actors are also said to have travelled to Ukraine to support Zelensky. Whether this was paid for out of their own pockets or out of USAID funds is currently being investigated. But be careful: there are also fake videos in circulation here, which were probably deliberately put into circulation by Russia. A lot is possible with AI these days.
Where have $100 billion in aid to Ukraine gone?
Of the $177 billion in US funds approved by the US Congress, only $76 billion is said to have arrived in Ukraine. If this is true, a committee of inquiry is needed not only in the US Congress, but also in the EU and even in the German Bundestag. Who is actually monitoring where the billions in aid from the EU budget and also from the German federal budget, which are financed by taxpayers, are going exactly? Ukraine is still one of the most corrupt countries in the world and strict controls on the ground would have been necessary here anyway.
Is Argentine President Javier Milei a role model for Trump and Musk?
Trump and Musk are now carrying out a clean-up of unpopular government officials, taking a similar approach to Argentine President Javier Milei, who also wants to symbolically cut down rotten trees with a chainsaw. But he also wants to clean up the government apparatus in order to allow more market economy and less state to come into its own. Trump and Musk are now taking a very similar approach. This will cause a lot of excitement and protests in the US. There will certainly be new attacks against Trump this year, because Trump is now making new enemies through his aggressive policies. This is not only the case domestically, but also with foreign countries, such as the Iranian Revolutionary Guard. There was already an assassination attempt during the election campaign, which Trump only narrowly survived.
The customs war with China enters the first round
The tariff increases of 25% against Canada, 25% against Mexico and 10% against China have already caused a great deal of excitement, although the tariff increases against Canada and Mexico have been suspended for one month due to help in the fight against the drug mafia. Trump is also threatening the EU with tariff increases, which would in turn force the EU to respond with increased tariffs on US goods. China has already responded promptly by raising tariffs on US oil and gas products, some agricultural products and cars. If the US oversteps the mark here, Chinese President Xi may feel compelled to take Taiwan, which could shake the US semiconductor and chip industry. A Taiwan war cannot be ruled out this year, which would have a significant impact on the global economy. But the Taiwan war will not come until the second half of the year at the earliest.
Trump threatens sanctions against the International Court of Justice in The Hague
But Trump is also threatening sanctions against the judge and staff of the International Court of Justice in The Hague if US citizens are convicted there. Last year, for example, Israeli President Netanyahu was convicted of war crimes, as was Putin. The EU and the German government are furious about these threats from Trump, who does not comply with international courts. Trump wants a carte blanche for all US citizens, which already speaks volumes. Trump wants to set the rules for the world that everyone should follow. What a farce.
When will the bottleneck of ‘rare earths’ occur!?
The USA wants to expand world domination with all its might. But this will also be a fight for raw materials and resources. Trump knows this very well. That is why he wants to annex Greenland. And Trump wants to get raw materials like rare earths from Ukraine in exchange for billions in US aid. However, over 90% of rare earths come from BRICS countries and over 70% from China. Sooner or later, this could come back to haunt Trump if he overdoes the trade war with China.
BRICS are against US world domination
The BRICS countries, which have formed to prevent the US from dominating the world, are against the US world domination. The BRICS countries still operate without their own currency like a toothless tiger. But that could change if a new BRICS currency, possibly crypto-based, is launched. As a precaution, Trump threatened to increase tariffs by 100% for all those who participate in such a BRICS currency. However, the BRICS countries are not a homogeneous community and are partly at odds with each other, so that so far there is no danger for the USA. In the event of war, however, this could quickly change.
Trump wants to take over the Gaza Strip – an absurd idea?
Trump’s suggestion at the meeting with Israeli President Netanyahu that the US take over the Gaza Strip and ‘voluntarily’ resettle the two million Palestinians in Jordan and Egypt caused even more excitement, especially in the Arab world. Jordan and Egypt immediately rejected the proposal. But German politicians also consider the proposal to be absurd and contrary to international law. Trump wants to conjure up a holiday paradise for everyone in the world out of the ashes and create thousands of new jobs. Netanyahu was enthusiastic about the proposal and immediately offered his help.
Does Trump want to bomb Iran via Israel?
Trump also authorised the shipment of the infamous GBU34B bombs, the so-called MOAB, to Israel, which can destroy Iran’s nuclear facilities. 11 tonnes of bombs are to be sent to Israel. Trump is threatening Iran with total destruction if there is a murder plot against him by the Iranian Revolutionary Guard. Iran is not pleased with the developments in the Gaza Strip and Trump’s proposals. It is also not pleased with developments in Syria, where Israel has now taken air supremacy. So even after a period of calm, there could be a new war between Israel and Iran, but it will be more intense than the previous ‘symbolic exchange of blows’. It will also be interesting to see how Syria will develop and what influence the US, in combination with Israel, will have there in the future, with Israel having already taken air supremacy in Syria, much to Iran’s chagrin.
Trump wants to end the war in Ukraine quickly – but at what cost for Ukraine?
But Trump is also obviously putting pressure on the Ukraine war to end quickly. Allegedly, the US special envoy for Ukraine and former US General Keith Kellogg wants to make a proposal at the security conference from 16 to 18 February on how the Ukraine war can quickly (by Easter?) be ended. According to this, Russia may keep the areas in eastern Ukraine and Ukraine may not join NATO. In return, Ukraine will receive security guarantees from the EU that Ukraine will no longer be attacked. The EU will then also be solely responsible for the reconstruction work, with the USA continuing to send weapons to Ukraine, for a price, of course. The USA is partly responsible for the fact that there has been such a long war in Ukraine at all. The German taxpayer would be the one to suffer as a result.
Trump calls for presidential elections in Ukraine
The US is also quickly demanding new presidential elections in Ukraine because the elections were suspended due to the war. That is why Putin does not want to negotiate with Selinskyi, because he is not considered a democratically elected president. Zelenskyi’s term of office formally ended on 20 May 2024. Due to the war, President Zelinskyi refused to allow new elections to take place, which would also be impossible in eastern Ukraine. The Pentagon is very dissatisfied with Zelinskyi. But there are now also protests in some cities in Ukraine against Zelinskyi, who is now calling for peace negotiations with Russia.
Putin will also demand that the US sanctions against Russia be lifted. Putin also demands security guarantees for Russia. Anything is possible and subject to negotiation. However, Trump wants to receive raw materials such as rare earths from Ukraine in return for billions in aid to Ukraine. If Trump manages to implement this, there will be a strong increase in stock prices in Ukraine. However, the negotiations could also fail if Putin does not see his security interests safeguarded. Then there is even the threat of an escalation in Ukraine. The devil is often in the details, especially when it comes to where the borders are and how they are to be protected.
DAX and gold at new all-time high
So far, the world’s stock markets have shown little sign of being impressed by the possible geopolitical dangers. It is only striking that the price of gold reached a new all-time high of 2867 USD/ounce on 5 February, along with the DAX. On 6 February, the DAX rose to a new all-time high of 21,900 index points, but corrected by 0.7% to 21,787 index points on Friday, which still represents a gain of 8.8% since the beginning of the year. Wall Street has also remained very calm so far. The Dow Jones Industrial Index almost returned to its old all-time high of 45,000 index points from early December 2024, but corrected by almost 1% on Friday to 44,303 index points.
Eastern European stock markets are booming: now comes the Trump Trade 2.0
As in the previous year, many stock markets in Eastern Europe performed even better than the DAX and DJI, with stocks from Ukraine leading the way this time, with the UTX index rising by 37.6% to 77 index points, with some agricultural and commodity stocks in particular skyrocketing. However, stocks on the Warsaw Stock Exchange (Poland) were also in high demand, with the Polish PTX index rising by 16.2%, both of which are good harbingers of the ‘Trump Trade 2.0’, i.e. advance bets that Trump can end the war in Ukraine in the first half of 2025. But stocks from Hungary (+9.9% on the HTX Index), Lithuania (+9.3% on the MSCI Lithuania Index) and the Czech Republic (9.1% on the CTX Index) can all outperform the DAX40 (+8.8%) and, even more so, the DJI (+4.5%). You can read about which Eastern European stocks are particularly promising in the East Stock Trends stock market letter (www.eaststock.de)
The CECE index (which includes Poland, the Czech Republic and Hungary) has already risen by 12.66 per cent, while the SETX index (for South-East Europe) is up 8.2 per cent. You can continue to rely on banks from Eastern Europe, as the CECE Bank Index has already risen by 12.3%. But don’t forget the promising stocks from Kazakhstan (+4%).
Freedom Broker offers market access to Kazakhstan
The KTX Local Index for Kazakh stocks has already risen by 30% last year and 4% this year. You can also buy Kazakh stocks directly online through the Cyprus-based broker Freedom Finance, which has the advantage of quickly adding the sometimes very high dividends to your portfolio. 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 this year if Russia stops the export of uranium to Russia. It is easy to open a counter-account 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 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 exchanges from Eastern Europe were among the 30 best-performing stock markets in the world, with 5 clearly outperforming the DAX. In 2024, 9 stock exchanges in Eastern Europe were once again able to outperform with a strong increase. And at the beginning of the year, there were already 6 stock exchanges in Eastern Europe that clearly outperformed the DAX. It is therefore still worth looking beyond the end of one’s nose 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), which includes another Ukraine/Kazakhstan special and a dividend special, as well as lots 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 was published on 31 January 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. You can download all radio and TV interviews from the video archive at www.eaststock. de, including the last video in EastStockTV, episode 246. By the way: Have you already subscribed to the new YouTube channel – BRICS-TV, in addition to the YouTube channel EastStockTV?
Reading tip: 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 Andreas Männicke’s free newsletter 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.