Political movements dominated headlines in a week of mixed performances in financial markets worldwide. While movements in the top and bottom of the ranking have occurred very rare of late, the centre remains full of activity. Just as Metrics Fund was losing the most the week before, this week it made a comeback by advancing two places and gaining a decent return.
ATC Investments achieved the highest return of the week, thanks to its position in Alibaba. The Chinese e-commerce giant, who provides a comprehensive range of services to buyers and sellers on the internet, gained more than 10% after announcing annual revenue growth forecasts of 45 to 49 percent. Its founder Jack Ma, who once allegedly was the only one rejected by a fast-food restaurant out of a pool of twenty four applicants, has risen to become the richest man of China by revolutionising the country’s e-commerce market.
Equity indices in the United States were hitting record highs until a sell-off of technology stocks late in the week. The biggest names including Apple, Microsoft, Facebook and Alphabet all declined significantly on Friday. Although no single unambiguous cause can explain the phenomena, investors could just be taking profits after a recent rally. B.R.O.O.D. Beleggers sure did, making 20% on Advanced Micro Devices in just one month. Skybridge closed its position in Visa Inc. with a 10% positive difference after five months .
British prime minister May lost the Conservative party’s majority in the House of Commons after an election she called herself two months ago expecting to win a landslide victory. While she tries to solve the impasse of a hung parliament by appealing for support from minor political parties, the Pound Sterling’s initial fall of more than two percent against the Dollar has been pushing the FTSE 100 higher.
Quite another story is that of French politics. After Emmanuel Macron surprised the world by becoming the youngest French head of state last month, his political party En Marche! (On the move) might gain an absolute majority in parliament without having held a single seat before. After the first election round, a second round will follow next saturday in which the president can secure the strong mandate he needs to push through policies.
Fixed Income investors, after reacting to final polls of the French parliamentary elections with lowering the risk premium on French sovereign bonds, are now looking forward to an expected interest rate rise by the FED next week.
Written by Lemeng Li