Flow Traders Investment Competition: Trump Grabs All Attention, Again

A spectacular week has passed in the Flow Traders Investment Competition. While the S&P 500 remained flat (-0.03%), over the week, this does not mean that nothing has happened in the world. On the contrary; the world has experienced a lot of commotion, disbelief and excitement last week. The Dow ended the week about 1% lower than Monday morning, whereas the Eurostoxx 50 gained over 1.5%.

The week started with a summit where President Trump met with North Korea’s chairman Kim Jong-un on Tuesday. In Singapore, the two world leaders negotiated over potential peace agreements and the denuclearisation of the Korean peninsula. Both leaders signed a non-binding letter of intent, stating their agreements on these issues. What this exactly means remains to be seen, but commentators agree that the hand-shaking approach that Trump takes, is preferred over an approach of fire and fury. The relatively friendly approach has more potential to avert potential war and reach a peace agreement, they argue.

When Trump returned to the US, he imposed tariffs on over $50 bn. worth of Chinese goods. Where people were hoping on de-escalation with regards to a potential trade war between the two world powers, this action could lead to the exact opposite.

As if this was not enough spectacle already, Adyen, a Dutch online payment company, had its IPO on the Euronext, raising billions of capital for the company. As only a small part of the equity (15%) was up for sale, only institutional investors could register for the IPO, with many of them failing to obtain shares of the rapidly growing company. The demand for shares was huge. This already became apparent during the ‘road-show’ that the board typically makes before the IPO of a business. Meeting rooms had a lack of capacity, and investors were sent away as the rooms became too crowded. It was therefore no surprise that the stock went up when it became available for the general public. No-one had expected the shares to jump over 80% percent, though, even doubling during intraday trading. With an introduction price of €240 per share, Adyen wanted to prevent a Snapchat scenario, where the price would be too high to maintain. Instead, Adyen, for now, will be added to the list of IPO’s such as Twitter (+74%) and LinkedIn (+109%).

So what happened in our own competition? At the top of the competition, Borsa Valori seems to have started the attack for the second place. Although Primus’ returns are much higher, Borsa has made a nice profit without too much volatility. Furthermore Conquistadores Capital is continuing its winning streak. Even though they did not make the most profit, last week, they won four spots by gaining over 4%. Invequity, however, has lost 10 places in the ranking. Their investments in crypto trackers have cost them over 7% of losses last week.

Written by Joppe de Bruin