- Annual review and outlook for 2023/34 –
Most of the world’s stock markets have enjoyed an impressive year-end rally since November, with indices reaching new highs for the year. The DAX even reached a new all-time high in December, but Wall Street was also convincing, with the “7 glorious AI stocks” in particular catapulting the US indices upwards. This happened despite the fact that the economic outlook for the coming year is very gloomy and the geopolitical risks are still very high. This is known as a “crack-up boom”, which is only driven by a few stocks.
Most investors have even completely ignored the best investment region in the world, namely Eastern Europe. The stock markets in Eastern Europe were the most convincing. 12 stock exchanges from Eastern Europe are among the 30 best-performing stock exchanges in the world. Five stock exchanges from Eastern Europe clearly outperformed the DAX (+19 per cent) and the S&P index (+24 per cent). The CECE index, which includes Hungary, Poland and the Czech Republic, rose by 35 per cent and the SETX index for shares from south-eastern Europe and the Balkan region gained almost 30 per cent.
Risk-averse investors can now also buy promising shares from Kazakhstan (KTX index: +32 per cent!) directly online via the broker Freedom Broker or Freedom Finance if they open an account beforehand, which is easy to do online at this link: https://freedom24.com/invite_from/2952896 . Although Russian ADR or original shares are still not tradable due to the sanctions, new opportunities may now arise again with some Russian ADR/GDR, which you can now buy at discount prices on the OTC market via the brokers Zerich Securities Ltd or Freedom Finance from Cyprus. Interesting stocks on the OTC market are above all the Russian discounter Fix Price, which has now also gone public on the stock exchange in Kazakhstan, and the IT stocks VKontakte and Yandex (more on this in the stock market letter EAST STOCK TRENDS (www.eastststok.de). However, you also need to open an account beforehand, which is easy to do at this link: https://trade.mind-money.eu
Andreas Männicke also gives his assessment 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 222 at www.YouTube.com.
After the champagne mood comes the hangover mood in 2024
Investors on most global stock markets are already in a champagne mood before the turn of the year. The relatively low US inflation rates in November and the prospects of interest rate cuts by the Fed next year put investors in a virtually euphoric mood, but euphoria usually kills the bull market. The economic outlook for next year is rather gloomy and the money supply is falling, meaning that there will be less liquidity available for the stock markets next year. A final surge by investors despite a poor economic outlook and major geopolitical dangers is known as a “crack-up boom”, which is only supported by a few market-heavy stocks and which can continue for a while until investors realise that the positive sentiment was exaggerated. The still major geopolitical risks, such as a possible escalation of the war in Ukraine or the war in Israel, were ignored and regarded as a “non-event”, which may yet take its toll.
Stock market boom driven by only a few market-heavy stocks
Despite the recession and an incompetent government in many areas, the DAX reached a new all-time high in December and has risen by almost 20 per cent since the beginning of the year, with SAP and Siemens in particular driving the DAX upwards. In the USA, it was primarily the “glorious 7 AI stocks” such as Microsoft and Nvidia that drove the US indices upwards. However, second-line stocks were hardly in demand. The Russel 2000 Index was even down.
Eastern European stock markets as clear outperformers
Even better than the DAX, however, were five stock exchanges from Eastern Europe, which clearly outperformed the DAX, led by the Budapest Stock Exchange with a plus of 45 per cent on the HTX index and the Warsaw Stock Exchange with a plus of 41 per cent on the PTX index, with currency gains in addition to price gains on the stock exchange. The CECE Index, an artificial product of the Vienna Stock Exchange with Hungary, Poland and the Czech Republic on board, even achieved a plus of 35 per cent and the SETX Index for shares from south-eastern Europe and the Balkan region achieved a plus of almost 30 per cent, both significantly better than the DAX (+19 per cent) or the S&P Index (+24 per cent).
“Bargains” with Russian ADR/GDR on the OTC market
Russian ADR/GDR are still not tradable on Western stock exchanges due to mutual sanctions and expiring ADR/GDR programmes, and therefore neither are Eastern European funds, the Russian ADR/GDR. However, there are now incredibly low “bargain prices” on the OTC market for very risk-averse investors, which they can of course only take advantage of via the two brokers from Cyprus, Zerich Securities Ltd. or Freedom Finance (Freedom Broker), if they set up an account there in advance. Shares such as the IT stocks VKontakte (the Facebook of Russia) and Yandex (the Google of Russia), the consumer chain Fix Price or the personnel service provider Headhunter are traded at a discount of sometimes over 40 per cent to the prices on the Moscow Stock Exchange. If you want to take advantage of these opportunities in the OTC market with Russian shares, you must first open an account with Zerich Securities via the link https://trade.mind-money.eu or with Freedom Broker via the link: https://freedom24.com/invite_from/2952896 .
At Freedom Broker you can also trade shares from Kazakhstan, whereby shares from Kazakhstan are currently a good alternative to Russian shares. The KTX index for shares from Kazakhstan has already risen by 32 per cent to 717 index points since the beginning of the year. In addition, Freedom, Broker offers you attractive fixed interest rates (up to 6.15 per cent in USD), a variety of account models with fair conditions, direct access to 15 stock exchanges, internal exchange options in various currencies, a wide range of asset classes and a financial academy for beginners and professionals. If you deposit certain amounts from 5000 to 50,000 euros, you will also now receive some free shares worth 3 to 700 USD as part of a promotion if you register at the following link: https://freedom24.com/invite_from/2952896 and then go to this page: https://lp.freedom24.com/de/xmas
Gold and cryptocurrencies up, but oil down
Since the beginning of the year, the price of gold has risen by 13 per cent to USD 2062/ounce in US dollars or EUR 1869/ounce, which is very close to the old all-time high, and silver has risen to USD 23.77/ounce, which is admittedly still a long way from the all-time high of USD 50/ounce. In this respect, silver still has more potential for recovery next year. OPEC did decide on further production cuts. But next year, the USA is threatened by a recession and weak demand from China, so there are concerns about demand. The price of Brent oil fell by around 10 per cent in 1 year to USD 77/barrel and the WTI oil price to USD 71. Cryptocurrencies such as Bitcoin and Ethereum remain in demand, each reaching new highs for the year. Bitcoin (BTC) even rose by over 150 per cent in 1 year, most recently mainly due to the imminent approval of BlackRock’s BTC ETF.
When will there finally be diplomatic solutions to the war in Israel and Ukraine?
In the Ukraine war, Russia is now advancing with all its might and Ukraine is having problems holding its ground. Russia is now also bombing the infrastructure in various cities more aggressively. Ukraine lacks personnel and ammunition. It is doubtful that the requested FH16 fighter jets will become a “game changer”. Presidential elections will be held in Russia in March and Putin will probably want to create facts that are favourable to him by then. Presidential elections were also due to take place in Ukraine in March, but these have already been cancelled by President Zelensky due to the war, as were the parliamentary elections in October 2023 beforehand
Although the war in Ukraine seems to be unending due to the West’s willingness to continue supplying weapons and ammunition, it would make sense to bring about a ceasefire now so that no more young soldiers have to lose their lives on the front line. In a prolonged stalemate situation, it would make little sense to keep on fighting, but rather to seek compromise solutions that are acceptable to both sides through diplomatic channels. However, the same also applies to the Israeli war with a two-state solution in order to avoid an escalation into a Middle East conflict. The USA plays an important role in both negotiations, whereby the EU, and Germany in particular, has so far failed as a potential peacemaker by taking sides too unilaterally.
First inform, then invest
Find out more about the background and development of the Ukraine/Russia crisis as well as the future recovery potential of undervalued stocks from Eastern Europe. There are also new opportunities in the Baltic states, south-eastern Europe and the CIS republics (Kazakhstan, Georgia), with the respective share 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. After the war in Ukraine, it is therefore still worth looking beyond the horizon to Eastern Europe.
Order a trial subscription now (3 issues by e-mail for only €15) to the monthly stock market letter EAST STOCK TRENDS (EST) with another Ukraine/Kazakhstan/Russia 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, under Stock Market Letter. The last EST was published on 23 December 2023.
TV/radio notes: The last radio interview on Börsen Radio Networks was on 2 October 2023, but please also note the new interview by Marco Fröleke with Andreas Männicke on the new investment opportunities in Eastern Europe on his YouTube 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 in EastStockTV, episode 220. By the way: have you already subscribed to the EastStockTV YouTube channel?
If you are interested in new EastStock seminars “Go East” in Frankfurt/m or other cities, please contact the EST editorial team (www.eaststock.de )
You can also subscribe to Andreas Männicke’s free newsletter with the latest news on the world and eastern stock markets at www.eaststock.de .