Investing

Long duration trades are fading into the background because of tighter monetary policy. Markets have adjusted swiftly and find themselves in the middle of the cycle. The volatility that accompanies this is not necessarily disastrous, said Steven Vandepitte (pictured), asset allocation strategist at ING Private Banking. 

Vandepitte believes that the US faces three to four interest rate hikes at most. 

Queen Máxima of the Netherlands has called on European financial supervisors to review financial services for their health impact and urged the banking, payments and investment industries to do more to make sure that their clients make well-informed decisions.

As the year of the tiger starts, it is time to get excited about Chinese equities, writes InvestmentOfficer/FondsNieuws columnist Han Dieperink.

Today, the year of the tiger starts. A year ago at the start of the year of the ox, it was time to swap Chinese stocks for Chinese bonds. Economic growth had peaked and so did the earnings cycle. Moreover, Chinese stocks had risen sharply during the first year of the corona crisis.

It may be only 8 years away, but many representatives of Luxembourg’s financial centre have clear visions of a 2030 of higher technology but also a commitment to ESG values, but which may be a challenge to bring about.

Investors are watching the recovering raw materials market with suspicion. There is even a commodities supercycle on the way, according to Jeffrey Currie, the global head of the commodities research department at investment bank Goldman Sachs.

Currie  is not alone in this expectation. According to the Dutch research bureau Alpha Research, which carried out a survey among 58 asset managers, 46 per cent gave a buy recommendation.

In periods of low interest rates, high stock market prices and persistent inflation, the usually volatile commodity markets are once again in the sights of investors. This is also the case now, but this time there is another complicating factor: 100,000 Russian soldiers on the border with Ukraine, which the US president expects to invade the neighbouring country.

2021 was one of the worst calendar years for emerging markets in the last decade, according to senior manager research analyst Ronald van Genderen of Morningstar, in his contribution for this week. Only 2013 saw a (narrowly) bigger loss. That year, the market was hit by concerns about the so-called “taper tantrum”. The situation today is similar, with increasing concerns about rising inflation that may trigger interest rate actions by Western central banks.

Private banks in Luxembourg have seen their assets under management double since the 2007-8 financial crisis, according to a survey conducted by KPMG and the Luxembourg Bankers’ Association (ABBL). The report observed that growth at Luxembourg’s private banks in 2020 outpaced growth at their counterparts in Switzerland.

Private banks held 508 billion euro in assets at the end of 2020, up 9 percent from 466 billion euro a year earlier and more than double the 225 billion euro held at the end of 2008.

In the medium term, the green transition may further fuel inflationary risks, according to ECB board member Isabel Schnabel in an interview with the Financial Times last weekend. Rising energy prices, she said, may require the ECB to do more to hold back increases. She urged portfolios to increase their investments into real assets. 

The two oil crises of the 1970s are notorious. In 1973, the oil price went from $3 a barrel to $12 a barrel in two weeks, and in 1979 the oil price rose from $12 a barrel to $33 a barrel. OPEC’s power was great in the 1970s. OPEC’s market share is now rising. This year, moreover, demand for oil will exceed supply for the first time.

Last year, oil prices already rose by 50 per cent. A new oil crisis is in the offing.