Market Summary Presentation Day 13th October 2020.

Reference Day: 12th October 2020

Are to Cover Areas of Equities, Bonds, Commodities, Forex Exchange, Etc.

Asian Markets

Equities

1. The Chinese stocks rose on the hopes that XI shall announce reforms in Shenzhen
a. It is said that president XI is expected to prepare plans to make southern part of
china into a global technology hub. An official address is to be expected on
Wednesday, and we are to keep close eye on the CSI Index and the Technology
stocks listed on it as these shall be positively impact. Example based on positive
expected outlook in president XI address we have seen stocks such as Xiaomi Corp
rose 8.4%.

2. Chinese equities are also to be kept under a watchlist for a positive rise
a. This is said due to a scheduled meeting taking place in October for China’s
Communist Party. It is said that they are to derived policies that shall yield positive
gain in Chinese Equities. The policies shall be in favour to reinstate growth within the
Chinese economy, as a reform to recover from the coronavirus pandemic.

3. A positive bet on the gaming industry

a. New generation of consoles shall see a surge in prices for console games, the
industry generating revenue of 159.3 B in revenue in 2020. Reports have surfaced
that the pricing on games releasing on the newer generation console is said to have
a price rise, and with the current covid-19 situation, the gaming industry has a seen
a tremendous growth in the demand of its services. Stocks to keep a track on
include:
i. Take-Two Interactive – Has 18b in market cap and has seen a 30% growth in
past 12 months.
ii. Activition Billazard – Is the largest gaming developer in the US and with its
user performance being excellent in the 2 nd quarter of 2020, with 28million
active users, and stock has risen around 51% in the past 12 months
iii. Sony – High anticipation on the release of its next gen console releasing in
November 2020, we could see a positive outlook for the stock, and over the
past 12 months the stock has risen 26%.

4. The Plan is set into motion to Merge China’s Two Largest Live Streaming Platform, Huya
and DouYu, whereby strengthening Tencent’s Position in China
a. Tencent holds more than a third in both the company, with the merger we could see
the tech giants position strengthen in e-sports and gaming and in the New Company,
Tencents voting power will be 67.5%.
A growth could be seen in the price of Tencent, once the merger takes place,
together with the new company extending its service beyond live streaming.

Forex

1. Sell on a dollar based on the US Elections being won by Biden, and a Vaccine Delay
 a. Based on the currently situation the US dollar may topple back to the lows of 2018,
based on Joe Bidden winning the US Election and a delay in the Corona Virus
Vaccine. As per Bloomberg reports, a blue wave US elections and news on vaccine
may probably lead to the 2018 lows on the DXY index. Also, to note is the ICE US
Dollar Index has fallen more than 3% in 2020 and it is trading at 93, this is credited
to the Federal Reserve’s monetary stimulus and very low-level interest rates.
Compared to 2018 it is predicted that it may well trade at 4% lower than 89 in 2018.

Over the coming weeks Goldman, UBS Asset Management, Invesco Ltd, are
projecting a weaker dollar as Biden increases his lead over Trump, in less than three
weeks to election day. It is quite in favour to short the US Dollar against currencies
that are volatility weighted basket that consist of currencies such as Mexican Peso,
South African Rand, and the Indian Rupee. While a buying recommendation is given
on Canadian, Australian and Euro currency against the greenback. A positive long
recommendation is given for the yuan through the Chinese government bonds being
unhedged.

2. Decrease in the Value of Australian Dollar amid reports of China Suspending Purchase of
Coal
a. Based on the news that Chinese companies have received verbal notice to stop
buying Australian Coal, thus the Australian Dollar value has slid due to this.
i. A shorting of the Australian Dollar is feasible.

Commodities

1. Australian Coal Mining Industry takes a Dive

a. The Australian coal mining industry is set to take a dive, as Chinese firms are given a
verbal notice on to stop imports Australian Coal. However, the Australian Government
has not been notified of a formal statement, but reports have surfaced on the S&P
Platts.

Shares in coal mining companies have tumbled yesterday Monday 12 th October 2020,
the Largest Australian Mining company dropping by 6% at close which is Whitehaven
Coal Ltd. A formal notice is far. The Australian Coal industry is already facing a 17b
export loss. If the restrictions are imposed the Australian coal industry could see a
further drop of 14b in value. Also, to note is that Australia’s trade relations could be
further harmed with this move, as this year the relationship worsen due to multiple
diplomatic disputes.

However, the verbal moves to impose restrictions on Australian coal, could see a
positive rise to the value of local miners in China, as the Communist Party would
eventually pump stimulus into the economy, and increasing investment in renewable
energy.

Whitehaven is currently trading at $0.98

A watchlist is to be kept closely, on the renewable energy stocks in China

 2. Brent Crude fell 52cents to 42.33 a barrel and the WTI was down 58cents at 40.02
a. The oil prices fell as Libya’s largest oil fields force majeure was lifted, and the
Norwegian strike affecting production ended, together with US producers began
restoring output after hurricane delta.
A projection that the oil decline shall decline, and the production restoring shall hold
the oil slide. However, the strict COVID 19 trade restrictions could still impact the
global demand.

Bonds

a. Indian state bonds dropped around 35 basis points, as the Reserve Bank of India
announced plans to buy those instruments.
i. The State Government bonds with 20-year maturities that were yielding
around 7.05-7.15% before the bimonthly policy announcement, are now
trading at 6.7-6.72%.
ii. This decision has triggered a rally in state bonds.

2. JSW Steel raises 500 million via offshore bonds

a. This could come in handy, if the pandemic were to hasten consolidation in the
industry. The high yield bonds obtained an order book of about $1.5b. The proceeds
would be used for both repaying high cost debt and other business purposes. A long
on the JSW steel shares would be a favourable trade for the day.