Date Issued – 22nd November 2024
Asian Stocks Rise on Nvidia Earnings and Bitcoin Rally
Asian stocks tracked Wall Street gains on Friday, buoyed by Nvidia’s strong earnings and a surge in bitcoin prices.
Key regional benchmarks, including Japan’s Nikkei 225 (+1%) and South Korea’s Kospi (+1.2%), advanced, while Hong Kong’s Hang Seng
and China’s Shanghai Composite saw slight declines. Nvidia’s robust demand for AI chips propelled U.S. markets, with the S&P 500
rising 0.5%, while bitcoin briefly surpassed $99,000 before retreating. Crypto markets rallied further on news of SEC Chair
Gary Gensler’s pending resignation, fueling optimism for a lighter regulatory stance.
Investors should balance exposure to high-growth sectors with defensive assets, as geopolitical and inflation risks persist.
Adani Group Faces Downgrade Amid U.S. Indictment Fallout
S&P Global Ratings has downgraded its outlook on three Adani Group entities from stable to negative, citing concerns over funding
access following U.S. bribery charges against founder Gautam Adani. The indictment accuses Adani and seven others of a $265 million
scheme to bribe Indian officials for power-supply deals. Adani Group has dismissed the allegations as baseless and pledged legal
recourse. S&P warned that the charges could erode investor confidence, raise funding costs, and disrupt the group’s ambitious growth
plans, given its reliance on equity and debt markets. Adani Group stocks and bonds extended losses for a second consecutive session.
Investors should monitor funding access and refinancing challenges for highly leveraged firms like Adani Group, as these could signal
broader market vulnerabilities.
Market Update
BOJ Likely to Raise Rates in December as Yen Weakens, Trump Victory Fuels Inflation Expectations
A Reuters poll suggests the Bank of Japan (BOJ) will hike interest rates at its December meeting, with 56% of economists
predicting a raise to 0.50% amid yen depreciation and a strengthening economy. The poll also notes that Donald Trump’s election
victory could push the BOJ to act further, as inflationary policies in the U.S. might stoke global inflationary pressures. BOJ
Governor Kazuo Ueda highlighted the risks of keeping rates too low as Japan moves toward sustained wage-driven inflation. By
March 2025, 90% of analysts anticipate rates will reach 0.50%, with some forecasting further hikes to 0.75% in early 2025.
potential implications for yen strength and export competitiveness. Investors should watch for opportunities in Japanese financials
and exporters sensitive to currency movements.
Gold Soars as War Risks Intensify, Euro Slumps
Gold surged 4.5% this week, its largest weekly gain in eight months, as geopolitical tensions escalated. Russia fired a hypersonic
missile at Ukraine and lowered its nuclear weapons threshold, triggering safe-haven demand. Meanwhile, shares of Hunan Gold Corp.
surged by their 10% limit for two consecutive days following the discovery of significant gold resources in China’s Hunan province.
The find, estimated at 300 tons with deeper potential reserves, highlights China’s role as the world’s largest gold consumer.
Elsewhere, the euro fell to a 13-month low amid Europe’s economic and political challenges, Brent crude climbed 4.5% on supply concerns,
and Bitcoin hovered near $100,000, adding to market volatility.
Investors should consider gold mining stocks and ETFs as a hedge against uncertainty, while remaining cautious on euro-denominated
assets amid Europe’s fragility.
Three BofA India Bankers Exit Amid Stock Offering Probe
Three senior Bank of America dealmakers in India, including Debasish Purohit, co-head of investment banking, have left amid an
internal probe into allegations of misconduct tied to stock offerings. Transactions under scrutiny include a $178 million share
sale by Aditya Birla Sun Life Asset Management in March. Indian regulators began investigating the matter in September, raising
questions about compliance practices. Bank of America has yet to comment or name replacements for the departing bankers.
compliance issues tied to capital markets activity, particularly in regions with heightened regulatory scrutiny, as such risks could
impact financial institutions’ reputations and operations.
Conclusion:
This week’s market developments underscore the complex interplay of geopolitical risks, regulatory challenges, and shifting
economic landscapes. As investors navigate these uncertainties, a balanced approach that combines growth-oriented investments
with defensive strategies appears prudent. Opportunities may arise in sectors like technology and gold mining, while caution
is warranted in regions facing heightened regulatory scrutiny or political instability. Ultimately, staying attuned to global
events, monitoring key risk factors, and maintaining a diversified portfolio will be essential for weathering the volatility
ahead and positioning for long-term success in an increasingly dynamic investment environment.
Upcoming Dates to Watch:
November 22, 2024: Japan National CPI release
November 28, 2024: Eurozone Economic Sentiment Indicator release
Find below some of our Buy/Sell Recommendations. Balfour Capital Group is a distinguished global boutique investment management firm with $400 million AUM and over 1000 Clients.
Disclaimer: This post provides financial insights for informational purposes only. It does not constitute financial advice or recommendations for investment decisions.