Eastern European stock markets are booming, but hardly anyone is involved

New opportunities with Russian ADR/GDR via Freedom Broker

The stock markets of Eastern Europe are still being neglected by the Western media. Yet the stock markets of Eastern Europe have repeatedly proved to be clear outperformers compared to German and even American equities. While investors in the USA are concentrating on the “glorious 7 AI stocks” such as Microsoft and Nvidia, the selection of well-performing stocks in Eastern Europe is much larger. Only a few investors have so far taken advantage of the great opportunities on the stock markets of Eastern Europe, which have now also risen to new annual highs. The HTX index of the Budapest Stock Exchange, for example, has already risen by 41% (!) in euros to a new high for the year, with the Warsaw Stock Exchange (38%) rising even more in recent weeks following the opposition’s election victory. Shares from Kazakhstan (+37%) are still proving to be a good alternative to non-tradable Russian shares.

Some Russian ADR/GDR can now be converted back into original shares if the investor has previously obtained an exemption permit from the Bundesbank and opened a rouble account in Russia. Risk-averse investors can now also buy promising Kazakhstani shares directly online via the broker Freedom Broker 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 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 new 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 221 at www.YouTube.com.

Falling inflation rates and bond yields boost global stock markets despite high geopolitical risks

Despite the continuing threat of escalation in the war in Israel and the never-ending war in Ukraine, global stock markets rose sharply last week due to the recent sharp fall in US inflation rates and the possibility of the Fed continuing to pause interest rates. Yields at the long end fell in both the US and Europe, which gave the stock markets a strong boost. No one now believes that the Fed will raise interest rates on December 13, nor will they afterwards. Once again, the stock markets in Eastern Europe performed particularly well, although far too few investors are taking advantage of the great opportunities on the Eastern European stock markets because they are still being neglected by the Western media.

Eastern Europe as a clear outperformer

The CECE index, an artificial product of the Vienna Stock Exchange with Poland, Hungary and the Czech Republic on board, reached a new annual high of 1,782 index points last week, representing an increase of 33% since the beginning of the year. Although the Dow Jones Industrial Index (DJI) also reached a new high for the year at 35,254 index points, it has only risen by 9.38% since the beginning of the year. The DAX has also made significant gains in recent days, rising to 16,397 index points, but this also represents a rise of “only” 16.55% since the start of the year. Only the NASDAQ Composite Index with the “glorious 7 AI stocks” was able to keep pace with Central Eastern Europe and has now risen to 14,304 index points, which represents an increase of 37.72% since the beginning of the year. Without the glorious 7 AI stocks, however, the NASDAQ index would only have risen at a very below-average rate.

Paprika in the portfolio with Hungarian shares

In Eastern Europe, shares on the Budapest Stock Exchange rose the most, with the Hungarian HTX index up 41%, followed by the Warsaw Stock Exchange with the Polish PTX index up 38% and the Prague Stock Exchange with the Czech CTX index up 16.5%. In Hungary and Poland, the strong national currency meant that there were not only price gains on the stock exchange but also high currency gains, so that bond purchases with high bond yields were also worthwhile there. All the stock exchanges mentioned more or less clearly outperformed the DAX in euro terms.

Stocks from south-eastern Europe and the Baltic states on the upswing

However, most stock exchanges in South Eastern Europe and the Balkan region as well as shares from the Baltic states (Estonia, Latvia, Lithuania) also performed very well. Shares from Croatia with the CROX index rose by 32%, shares from Bulgaria with the BTX index by 27% and shares from Romania with the ROTX index by 25% since the beginning of the year. All the Eastern European stock markets mentioned clearly outperformed the DAX or the DJI. The SETX index for shares from South Eastern Europe also rose by 23.66% to 1754 index points.

“Bargains” with Russian ADR/GDR on the OTC market

Although Russian ADR/GRD cannot be traded on Western stock exchanges due to the sanctions, 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 over 40 percent to the prices on the Moscow Stock Exchange in some cases.

Some Russian ADR/GDR can now be exchanged for original Russian shares again, as long as the investor receives an exemption permit from the Bundesbank. However, when converting to original shares, you will need a rouble account, which Freedom Broker can set up for you. 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 Kazakhstan shares, whereby Kazakhstan shares are currently a good alternative to Russian shares. The KTX index for shares from Kazakhstan has already risen by 36.37 percent to 742 index points since the beginning of the year. In addition, Freedom, Broker offers attractive fixed interest rates (up to 6.15% 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 Christmas 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

Russian companies rethink

Some Russian companies now want to go to the Kazakhstan stock exchange, which is friendly from a Russian perspective, as the Russian gold and silver producer Polymetal has already done. Polymetal’s share price on the AIX in Kazakhstan has already risen by 50 percent from USD 2.7 to USD 4.07, although the price potential is far from exhausted, especially as gold and silver prices are now on the upswing.

Gold and cryptocurrencies up, oil down

The price of gold rose to a new high for the year of USD 2070/ounce, which is very close to the old all-time high, and silver rose to USD 25.5/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, and Russian oil shares have recently fallen somewhat. OPEC decided 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 therefore fell to USD 79/barrel and the WTI oil price to USD 74.2 after the OPEC conference. Cryptocurrencies such as Bitcoin and Ethereum remain in demand, each reaching new highs for the year

When will there finally be diplomatic solutions to the war in Israel and Ukraine?

Although the Ukraine war 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. Behind the scenes, negotiations are reportedly already intensifying, with the USA also involved. NATO membership for Ukraine is allegedly no longer a taboo subject from the Russian point of view, as long as Russia is given the guarantee that no NATO missile system or NATO offensive weapons may be positioned in Ukraine.

If the stalemate situation persists, there is little point in continuing to fight, 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 now about the background and development of the Ukraine/Russia crisis as well as the future recovery potential of undervalued shares 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 9 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 November 24, 2023.

TV/radio notes: The last radio interview on Börsen Radio Networks was on October 2, 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 September 28, 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 )

 

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EST Stock market letter

The stock exchanges of Central and Eastern Europe have been among the top performers among the world’s stock exchanges since 1998. In recent years in particular, many CEE stock exchanges have performed far better than the established Western stock exchanges. In 2019, for example, the Moscow Stock Exchange not only clearly outperformed the DAX and DJI, but also ranked among the 30 best-performing stock exchanges in the world.

Many investors have so far criminally neglected the CEE stock exchanges. Yet the selection of promising stocks is growing. Eastern Europe still has its future ahead of it.

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  • looks not only at the established eastern stock exchanges, such as Moscow, Budapest, Prague and Warsaw, but also at the second-tier countries and the CIS republics
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  • draws attention to risks and distinguishes between conservative and speculative investment options.

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