- Kazakhstan and Hungary as outperformers, boom in Southeast Europe and Georgia –
by Andreas Männicke, Managing Director of ESI East Stock Informationsdienste GmbH (www.eaststock.de) and publisher of the EAST STOCK TRENDS.
Since the FED ordered a pause in interest rates on 20 September, most world stock markets have been on a downward trend, with the exception of some stock markets from Eastern Europe. The FED kept the option open for another rate hike, which unsettled investors. Bond prices plummeted. Now there is even the threat of a bear market if economic data deteriorate further. The indices on Wall Street and the DAX already fell sharply last week, but gold also got caught in the downward pull. A shutdown in the USA was averted at the last minute, but the Americans are now no longer allowed to send money to Ukraine.
Against the falling global stock market trend, however, some stock exchanges in Eastern Europe were not only able to hold their own, but even rose to new highs for the year. The stock exchanges in Bulgaria (BTX +30 per cent), Croatia (CROX +29 per cent), Romania (ROTX +21 per cent), Kazakhstan (+38 per cent) and Georgia all rose to new highs for the year last week, while the DAX fell from 15,900 to 15,358 index points since the beginning of September and Wall Street was also very weak. But the Budapest Stock Exchange also did very well, with a gain of 33 per cent. Far too few investors, however, take advantage of the great opportunities on the stock exchanges of Eastern Europe because they are treated very stepmotherly by the Western media.
Risk-averse investors can now purchase high-potential shares from Kazakhstan directly online via the broker Freedom Broker if they open an account beforehand, which is easily possible online at this link: https://freedom24.com/invite_from/2952896 . Russian ADR or original shares are still not tradable because of the sanctions, but there could be new opportunities with Russian ADR soon, which you can now buy at discount prices via the broker Zerich Securities Ltd from Cyprus. Gold and silver producer Polymetal, for example, has already risen by over 50 per cent after it was delisted on the London Stock Exchange and has now been made tradable on the AIX in Kazakhstan. Interesting stocks in the OTC market are the discounter Fix Price and the IT stock VKontakte (more on this in the new stock letter EAST STOCK TRENDS (www.eastststok.de). However, you also have to open an account for these shares, which can be done easily under this link: https://trade.mind-money.eu.
Andreas Männicke also gives his assessments of the new opportunities in Eastern Europe in this unfriendly environment in his stock market letter EAST STOCK TRENDS (www.eaststock.de) and in his new EastStockTV video, episode 218 at www.YouTube.com . Andreas Männicke will also give presentations on this topic at the Berlin Stock Exchange Day on 21 October in Berlin and at the Hamburg Stock Exchange Day on 11 November in Hamburg.
FED unsettles investors
After the FED’s interest rate decision on 20 September, which did not raise interest rates but kept the option open for further rate hikes, investors were very unsettled. But along with inflation worries came economic worries. China is no longer the world’s economic locomotive and still has major problems in the real estate sector, which may soon also occur in the USA, especially in commercial real estate. But the high oil price could also fuel inflation again worldwide.
It may well be that the central banks, with the highest interest rates in decades, are overshooting the mark and causing a recession through overly restrictive monetary policy. Bond prices have already collapsed. The FED’s withdrawal of liquidity of almost USD 100 billion per month is particularly dangerous, because this money will then also be missing from the stock market. This could also trigger a liquidity crisis at some banks. Therefore, a defensive investment strategy is advisable now.
Record yields on government bonds cause concern
The T-bond future fell to a new low for the year of 113 (at the beginning of September it was still at 120) and the Euro-Bund future to 128.7 (at the beginning of September it was 133), which means that US yields and yields in the Eurozone have now risen to a new record level. With a certain time lag, this could trigger a new banking crisis in the USA, especially as the imbalances in banks in the bond sector are already enormous. A stock crash cannot be ruled out in October either, especially since there has already been – almost unnoticed – a bond crash. The imbalances at banks are likely to get bigger and bigger. Soon, excessive corporate debt will take its revenge. Especially in the case of a recession, many “zombie companies” will then be at risk of insolvency. Due to the high yields, the payment burden of the state will also increase, which could lead to a conflagration similar to the one in March, when two medium-sized banks in the USA went bankrupt.
Shutdown postponed, but no more money for Ukraine!
Add to this the geopolitical tensions and the seemingly never-ending Ukraine war, which is becoming very expensive for the West. In the USA, a shutdown, i.e. a budget freeze, could only be averted in the last minutes at the weekend. However, a new budget has now been agreed temporarily for only 45 days. Accordingly, the Democrats are now no longer allowed to send money to Ukraine, which is a sensible measure. The last shutdown was in 2019 and lasted 34 days and brought a minus of 0.2 per cent in GNP.
It’s time for a ceasefire in Ukraine
But there was apparently enough money before for the Ukraine war, which the Americans are helping to fuel with constant arms deliveries. Joe Biden’s reputation is increasingly weakened. Trump could win the presidential election in the US and then the Ukraine war would quickly be over. It is also now high time for a ceasefire before the Ukraine war escalates further and spreads to NATO countries.
DAX and S&P indices correct sharply, but gold also weak
Most of the indices of the major world stock exchanges corrected sharply in September. However, August and September are also statistically usually very bad stock market months. The DAX 40 index fell from 15,900 to 15,358 index points and the S&P index from 4500 to below 4300 index points. This means that the world stock markets are also very battered from a chart point of view and investors are very unsettled. However, financial investors said goodbye to gold ETFs, with gold no longer being the “safe haven”. The gold price fell below the support of 1900 USD/ounce and is now also in a short-term downtrend.
New highs for the year on the stock exchanges in Southeast Europe: +21% with the SETX index!
Contrary to the falling trend on most major world stock exchanges, some stock exchanges in Eastern Europe not only held their ground but even rose to new highs for the year. 10 stock exchanges from Eastern Europe are already among the 30 best performing stock exchanges in the world. However, since the Western media treat the stock exchanges from Eastern Europe very stepmotherly, very few investors take advantage of the great investment opportunities in Eastern Europe. However, shares from Eastern Europe are not very liquid and only a few are tradable over the counter on stock exchanges in Germany.
However, it is possible to cover the region of Southeast Europe and individual countries via index certificates. The stock exchanges from Southeast Europe (Serbia, Slovenia, Croatia, Romania, Bulgaria) developed very positively, which investors can cover via a SETX index certificate or a Balkan fund. The SETX index even reached a new annual high of 1722 index points on 30 September, which means a plus of 21.43 percent since the beginning of the year. The Vienna Stock Exchange has also long provided some art products for shares from Southeast Europe, some of which are also tradable as index certificates.
Add pepper to your portfolio with shares from Hungary: +33% with the HTX index!
Despite all the prophecies of doom, the Budapest Stock Exchange has performed best among the Central Eastern European stock exchanges with a plus of 33 percent. The pharmaceutical stocks Egis and Richtiger Gedeon were in strong demand. But the oil stock MOL is also very promising. At the same time, Hungary is almost in recession and has the highest inflation rates in all of Europe. Until the summer, the Warsaw stock exchange was still the front-runner with a plus of over 20 per cent. Since August, however, the Warsaw stock exchange has also corrected strongly. The Prague stock exchange also corrected slightly, but not as sharply as the Warsaw stock exchange.
Stock exchanges in Kazakhstan as top performers: +38% for the KTX-Index!
Individual country indices performed even better, such as from Bulgaria with the BTX index (30 percent) and Romania with the ROTX index (+21 percent). However, the KTX index for shares from Kazakhstan has performed the best so far with a plus of 38 percent, whereby the uranium producer Kazatomprom caused a sensation with a price increase of over 40 percent in September alone. However, the fast-growing FinTech bank Kaspi.kz continues to be a source of great joy.
Georgia booms
The Bank of Georgia in Georgia also reached a new all-time high. Georgia’s GNP growth was as high as 10 per cent last year, making Georgia one of the fastest growing countries in the world last year. The country even benefited indirectly from the Ukraine war, as many wealthy Russians fled to Georgia. Property prices rose sharply. The Bank of Georgia share is also in the sample portfolio of the East STOCK TRENDS stock letter (www.eaststock.de), as is Kazatomprom.
New opportunities also in the OTC market with Russian shares
Risk-averse investors can now buy opportunity-rich shares from Kazakhstan directly online via the broker Freedom Broker if you open an account beforehand, which is easy to do online at this link: https://freedom24.com/invite_from/2952896 . Russian ADR or original shares are still not tradable because of the sanctions, but there could be new opportunities with Russian ADR soon, which you can now buy at discount prices via the broker Zerich Securities Ltd from Cyprus. Gold and silver producer Polymetal, for example, has already risen by over 50 per cent after it was delisted on the London Stock Exchange and has now been made tradable on the AIX in Kazakhstan. Interesting shares in the OTC market are the discounter Fix Price and the IT shares VKontakte (more on this in the new market letter EAST STOCK TRENDS (www.eastststok.de). However, you also have to open an account for these shares, which can be done easily under this link: https://trade.mind-money.eu.
First inform, then invest
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, Southeast Europe and the CIS republics (Kazakhstan Georgia), whereby the respective stock indices were all up in 2023. In 2023 year, 10 stock exchanges from Eastern Europe were among the 30 best performing stock markets in the world, with 9 clearly outperforming the DAX. So it is still worthwhile to look beyond Eastern Europe after the Ukraine war.
Order now a trial subscription (3 issues by e-mail for only 15 €) of the monthly stock letter EAST STOCK TRENDS (EST) with another Ukraine/Kazakhstan/Russia special and a dividend 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 Letter. The last EST was published on 29 September 2023.
TV/radio notes: The next radio interview on Börsen Radio Networks is on 2 October 2023, but also note the new interview by Marco Fröleke with Andreas Männicke about the new investment opportunities in Eastern Europe on his You-Tube channel “Die Zeitenwende” from 28 September 2023. You can download all radio and TV interviews in the video archive at www.eaststock.de, including the last video on EastStockTV. By the way: have you already subscribed to the EastStockTV YouTube channel?
Lecture notes: Andreas Männicke will give a lecture at the Berlin Stock Exchange Day on 21 October in Berlin and also at the Hamburg Stock Exchange Day on 11 November 2023 in Hamburg on “New Opportunities in Eastern Europe, especially in Kazakhstan”.
If you are interested in new Eastern stock exchange seminars “Go East” in Frankfurt/m or other cities, please contact the EST editorial office (www.eaststock.de).