The early bird catches the warm

Monday, 06. February 2023
  • New opportunities also in Eastern Europe – 

This year, the world’s stock markets had one of the best starts in decades. Tech stocks in particular are in demand again. Nevertheless, the stock markets remain caught between monetary and geopolitical tensions, which can quickly lead to disillusionment. The Ukraine war can escalate and expand at any time, with the delivery of tanks and other weapons only prolonging the war and creating far-reaching potential for escalation. But the central banks could also burden the world’s stock markets with further interest rate hikes and liquidity withdrawal, which could then also lead to a recession or “stagflation”. The many strikes and high wage demands in Europe are also giving pause for thought. However, new IPO opportunities will open up again this year on the NASDAQ. Those with staying power are now also betting on so-called pre-IPOs, whereby the broker Zerich Securities Ltd from Cyprus is now opening up access to this also for small investors within the framework of a portfolio management contract. However, this requires opening an account with Mind Money at https://trade.mind-money.eu.

But new opportunities are now opening up in Eastern Europe as well. Although the war in Ukraine continues to be a burden, with Germany now also contributing to the escalation through tank deliveries, there are many undiscovered gems in Eastern Europe, especially in Poland, which even grew by 4.9 percent last year.

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 205 at www.YouTube.com.

World stock markets with a good start in January

World stock markets had a very good start to January. Tech stocks on the NASDAQ, which had been underperforming last year, rallied the most. The NASDAQ Comp Index closed with a minus of over 30 percent. Now, however, it has already recovered by over 10 per cent, doing much better than the S&P index, which is up 8.17 per cent to 2 February 2023. Tesla shares also had a dream start in January, rising 34 per cent in 4 weeks. Last year, however, the price was cut in half from over 300 to just 100 US dollars, partly due to the takeover of Twitter.

But the DAX40 index also already achieved a plus of 10 percent and the Tech-DAX of almost 15 percent (both until 2 February 2023). The DAX is now struggling with the 15,500 mark. But cryptocurrencies such as Bitcoin and Ethereum have also already risen by over 20 per cent since the beginning of the year. In contrast, gold/silver have only been able to make slight gains.

The central banks are now faced with the problem of combating the still high inflation with interest rate increases on the one hand, but not choking off the economy on the other. In the euro area, inflation rose by 8.5 per cent in the year, whereas 8.9 per cent had been expected. This is the lowest inflation rate since May 2022. Nevertheless, the ECB and the Fed raised the key interest rate by 0.5 basis points each, as expected. According to ECB chief Lagarde, energy prices will fall sharply, which means that inflation will also fall. The price of gas has already halved in the USA. But the Brent oil price also fell to below 80 UDSD/barrel. The economy will slowly recover, although the Ukraine war may again lead to price increases. The FED is now already at a key interest rate of 4.6 to 4.75 per cent. An interest rate of 5 per cent is expected to be the next rate hike. The ECB raised the interest rate to 3 per cent, but the ECB chief announced “only” a rate hike of 0.25 basis points for March, as inflationary pressure is decreasing. The euro against the USD si briefly at a new high for the year of 1.10 EUR/USD, but then fell back below 1.08 EUR/USD.

The Ukraine war could escalate in the spring, with the delivery of tanks only helping to escalate the war further. There are hardly any diplomatic efforts to end the war. Now even fighter planes are being demanded by Ukraine. If this continues, it could lead to a 3rd world war. Madness seems to know no bounds among politicians!

Eastern European stock markets can outperform

However, shares from Eastern Europe once again performed even better. The CECE index (with Poland, Hungary, Czech Republic on board) gained 8.2 percent since the beginning of the year (until 2 February 2023). The CECE index is an artificial product of the Vienna Stock Exchange for shares from Central Eastern Europe. The Vienna Stock Exchange also develops indices for the Czech Republic (CTX index), for Hungary (HTX index) and for Poland (PTX index). The CTX index for the Czech Republic has performed best so far with a plus of 15.84 percent, followed by Hungary with a plus of 7.21 percent for the HTX index and Poland with a plus of 5.5 percent for the PTX index, whereby the CTX index even clearly outperformed the DAX. But also the ROTX index for shares from Romania rose by 5.5 percent. Among the Eastern European stock exchanges, the Warsaw Stock Exchange seems to be the most promising this year, as there are many companies in the small and mid cap segment. Some of these shares, which were also presented in the stock exchange letter EAST STOCK TRENDS (www.eaststock.de), have already risen by more than 30 percent in recent months, such as Arctic Paper, Voxel, Movi Games and KGHM. Georgia stocks such as Bank of Georgia and Georgia Capital also remained very promising despite new all-time highs. It is still worth looking beyond the end of one’s nose.

New pre-IPO opportunities through Zerich Securities Ltd.

If you have staying power and a lot of patience, however, you should take a look at “pre-IPOs”, i.e. share purchases before a planned IPO. Normally, this is only something for very wealthy people or institutional investors. But the broker Zerich Securities Ltd. from Cyprus now also makes it possible for small investors to participate in a pre-IPO within the framework of a portfolio contract. As a rule, pre-IPOs are a much cheaper way to get shares in the company. All the big tech companies were once pre-IPOs, be it Alphabet, Facebook (Meta), Twitter, Netflix or many others. At the IPO, the price is often many times higher than at the pre-IPO. Per IOP, most companies are so-called “late private equities”, which means they have already successfully completed several capital increases and are almost ready for the stock market. However, further capital increases are also possible before the IPO. The IPO does not always happen immediately. Therefore, you have to have a lot of time and patience.

ConsenSys wants to go public

So now there is an opportunity to invest in the blockchain start-up company ConsenSys (www.consensys.net), ConsenSys is a leading software developer of Web 3.0. Web 3.0 is the third generation of internet services for websites. The goal is to create intelligent, connected and open websites. The company builds an ecosystem of consumer-facing products and business solutions using blockchain technology, here primarily Ethereum blockchain. ConsenSys’ main product is called “MetaMask”. It is the most widely used free digital blockchain wallet with more than 30 million active users. It is the most used crypto wallet in the world. You can use it to buy in shops, but also to exchange crypto assets including StableCoins (backed by another cryptocurrency, commodities, even gold or financial instruments or NFTs (non-fungible tokens). This is the most common application in Web 3.0, but ConsenSys has already launched many other helpful products such as Codefi, Infura, Diligence, Quorum and ConsenSys NFT.

Another product of ConsenSys is Codefi: Codefi are financial and commercial blockchain tools that allow to digitise commercial transactions and provide digital financial instruments, streamline business processes, create decentralised digital collaboration (digital networking), develop Nue blockchain solutions, users of this software are companies such as Société Generale, Binance, Crypto.com and various central banks.

ConsenSys also created the Infura software, which provides access to Web3 through API developers and access to the latest blockchain infrastructures. This helps 430,000 developers around the world to create new decentralised internet solutions.

Another product is Diligence, which includes comprehensive security checks and smart contracts tools for Ethereum. Diligence also helps developers, startups and companies to ensure that their applications run smoothly without any vulnerabilities, which is very important. There is also a product called Quorum, which offers blockchain solutions for businesses. It’s an open-source protocol that is designed to help startups use the best Ethereum applications right away. There is also the product ConsenSys NTF. This is a B2B platform for the development, integration and management of non-fungible tokens.

As you can see, ConsenSys has already launched numerous products that help to develop new business potential in a decentralised manner with the Ethereum blockchain, or even just to make business and financial transactions more efficient and cost-effective with the help of the internet. It thus also serves the Ethereum blockchain and decentralised financial products (DeFi).

There are different ways of monetisation for each product such as paid subscriptions to the service (like Infura), payment for implementation of business projects (Codefi, Dilligence), Staking, Liquidity Farming. Fees at crypto exchanges such as the so-called Gas Commission, investment portfolios (for assets of several hundred million USD), and consulting.

The company’s main revenues come from fees and transactions with MetaMask, where it already has revenues of around USD 200 million. In 2021, revenues were around USD 100 million mainly from users from MetaMask and from the trend with NFT and Defi.

It has raised USD 726.7 million in eight rounds of capital so far. In March last year, the company did a capital increase, raising USD 450 million. This alone doubled the market valuation from USD 3.2 billion (in October 2021) to USD 7 billion. In relation to the planned IPO, the share is now available at a discount. You can now buy ConsenSys at a price of USD 70 per share through Zerich Securities Ltd. under a portfolio management agreement with Zerich Securities Ltd or, Mind Money. Until ConsenSys is listed on the stock exchange, the share price should continue to rise strongly. Those who get in now will profit.

ConsenSys is based in Brooklyn, New York (USA). The company currently employs 50 people. ConsenSys was founded in 2014 by the co-founders of the Ethereum blockchain Joseph Lubin and 48 other investors. Ethereum is one of the most popular and most bought cryptocurrencies in the world. ConsenSys makes the software and the blockchain infrastructure and to enable the enterprise applications. It is about developing a decentralised financial infrastructure on the internet. ConsenSys already has over 2000 enterprise customers and partners around the world, including, among others. AWS, Microsoft, EY.WWF, P&G Société Generale, Binance, Crypto.com and Hitachi. With the help of ConsenSys, over 50 projects have already been implemented, many of which involve protection against cyber attacks, cyber security and auditing of the blockchain industry. Governments and central banks, as well as companies, are also working with ConsenSys to implement blockchain technologies. Cryptocurrencies and NFTs to integrate with them. If you want to participate in the Pre-IPO, you first need to open an account with Zerich Securities Ltd. or the Mind Money portal, which is very easy to do at https://trade.mind-money.eu or you can send an email to: info@mind-money.eu. Via this Mind Money portal you can also buy Gazprom bonds over the counter at a price of around 70, which could be a very lucrative business. The prerequisite for this in each case is the opening of an account and the conclusion of a portfolio management contract with Zerich Securities Ltd.

Participation in IPOs in the USA possible with Freedom Broker

Not only pre-IPOs are interesting, but also participation in IPOs in the USA. This is not only possible with Zerich Securities Ltd, but also with Freedom Broker. Here, too, excellent returns could be achieved in 2021. This could be repeated this year. In addition, one gets 3 percent interest on the USD account for the free liquidity. But also those who have questions about the Russian ADR are in good hands with Freedom Broker. Customers of Freedom Broker have already received the quite respectable dividends from Gazprom and LUKoil. More dividends will follow. Here, too, it is worth opening an account at https://freedom24.com/invite_from/2952896 .

Inform first, then invest

There are also new opportunities in Eastern Europe, where there are always outperformance chances. 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 Baltics, Kazakhstan, Georgia and Ukraine.

Review: In 2018, 10 stock markets from Eastern Europe were among the best performing stock markets in the world, all clearly outperforming the DAX and also the US stock market. The Moscow Stock Exchange was the clear outperformer among all world stock markets in 2019, with a gain of over 46 per cent in euro terms. However, the Bucharest Stock Exchange (Romania) also rose by over 32 per cent in 2019. The stock markets in South-Eastern Europe and also in the Baltic countries remained very stable on the plus side (Croatia +13 per cent). In 2020, 6 stock exchanges from Eastern Europe were among the 30 best performing stock markets in the world and last year even 11 stock exchanges from Eastern Europe. In 2021, shares in Kazakhstan rose by more than 80 per cent. Last year, 5 Eastern European stock exchanges, mainly from the Balkans, clearly outperformed the DAX, and this year there are again 4 Eastern European stock exchanges that outperformed the DAX. The CTX index for shares from the Czech Republic has already risen by 15 percent this year. So even after the Ukraine war, it is still worthwhile to look beyond the horizon to Eastern Europe.

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/bond special as well as with lots of background information and new investment suggestions such as with the “Stock of the Month” and lucrative certificates at www.eaststock.de, there under Stock Letter. The next EST will be published at the end of February 2023.

TV/radio notes: The last radio interview was on 12 November 2022 and before that on 31 October on Börsen Radio Networks. The next one is in early March on Börsen Radio Networks. Also watch the latest EastStockTV video on YouTube about the Ukraine war and the new outperformance opportunities in Eastern European stock markets. Every 14 days Mr. Männicke is also on YouTube at, “Finanzstammtisch” of Capital-Manager.com, last on 10 January 2023. 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?

 

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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.

Take advantage of your opportunities now!

  • analyses the most important trends on the CEE stock exchanges for you monthly on 30-60 pages.
  • 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
  • selects the most promising stocks for you from a fundamental and technical point of view and examines not only stocks but also other forms of investment such as funds, bonds, real estate, derivatives and certificates
  • draws attention to risks and distinguishes between conservative and speculative investment options.

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