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August performance of Element ONE

Element ONE
Issuer: ELEMENT ONE LTD 
ISIN Number: VGG299771086
IssueDescription: USD CL B SHS
ISO CFI: CICXXX


Elemеnt ONE investment fund performed +1,27% during August 2021

  • Share price — $1 907,17.
  • Investment in Datto (NYSE: MSP) was susccefuuly closed with a +5,86% return for 6 months.
  • Investment in Coinbase (NASDAQ: COIN) finally performed a return of +3,7%. 

5 best-performing companies in our portfolio

  1. Li Auto (Nasdaq: LI)
  2. Republic Services (Nyse: RSG)
  3. Progenity (Nasdaq: PROG)
  4. Immunome (Nasdaq: IMNM)
  5. Semtech (Nasdaq: SMTC)

In the independent rating of investment analysts — invest-idei.ru, Raison Asset Management is ranked 3rd out of more than 50 companies.

USA

The S&P500 index closed trading in August at another all-time high, increasing from $4389.50 to $4520.50, thus showing an increase of 2.98%.

The news background in August was negative: an increase in the incidence of the delta variant, Hurricane Ida and the withdrawal of US troops from Afghanistan, but these events had practically no effect on the stock marekt.

The market has positively reacted to Jerome Powell’s speech at Jackson Hole. Powell announced that “it would be wise to start slowing down the pace of asset purchases this year” if the economy continues to recover. At the same time, he noted that premature tightening of monetary policy is dangerous, and there is no talk of raising interest rates.

Based on the latest labour market data (see below), we expect the Fed to begin phasing out the stimulus program with some delay — perhaps from November or December. Most likely, the Fed will first want to see stronger data on the labour market.

The latest statistics on the two main benchmarks of the Fed: inflation and the labour market

Change in the number of employed in the non-farm sector (August): actual — 235K, previous — 1053K (revised from 943K).

Change in the number of employed in the non-farm sector (August) US

Unemployment rate (August): fact — 5.2%, previous — 5.4%.

Unemployment rate US 2021

Consumer price index (CPI) (YoY): fact — 4.3%, previous — 4.5%.

Consumer price index CPI USA 2021

US GDP deflator (q/q): actual — 6.2%, previous— 6.1%.

US GDP inflator 2021

European Central Bank

Inflation in the Eurozone jumped in August to its highest level since 2011.

European Union inflation rate

European Union inflation rate 2021

Core inflation, which excludes volatile items such as energy and food, reached 1.6%, the highest since August 2012.

EU core inflation rate

EU core inflation rate 2021

Key comments from ECB representatives

Philip R. Lane:

  • ECB intends to maintain favourable financing conditions throughout the European region;
  • The European Central Bank stands ready to respond to any market disruption.

Ollie Ren:

  • ECB will continue to buy assets even after the Fed starts to wind down;
  • ECB, most likely, will not decide on changing the parameters of the PEPP (Pandemic Emergency Purchase Program) at the September meeting.

Robert Holzmann:

  • ECB should start discussing the issue of phasing out the asset purchase program.

Yiannis Stournaras:

  • ECB is taking a more cautious approach to ending support than other global central banks.

The next ECB meeting will take place on September 9 in Frankfurt.

Russian Federation

Central Bank of the Russian Federation: “The main directions of the unified state monetary policy for 2022 and the period of 2023 and 2024”.

Basic scenario

The progressive growth of the world and Russian economies continues, which is stimulated by the vaccination and recovering pandemic situation. The GDP growth rate in 2021 is expected to be 4.0–4.5% and from 2022 it will stabilize in the range of 2–3%. Annual inflation is expected to return to the target by the end of 2022. In this scenario, the average key rate for 2022 will be in the range of 6–7% per annum. As inflation expectations decrease and inflation decelerates, the key rate will return to the long-term neutral range of 5–6% per annum.

Alternative scenarios: strengthen of pandemic, global inflation, financial crisis. More information you can find on the Bank of Russia website.

The basic scenario planned for the next years

The basic scenario of state monetary policy of Russia planned for the next years

Central banks rates

  • FED: 0,25% (previous 0–0,25%)
  • ECB: 0% (previous 0–0%)
  • CBRF: 6,50% (previous 6,50%)

Commodities market

The overall commodity market, represented by the Invesco DB Commodity Index Tracking Fund (ETF), fell 1.30% from 19.5 to 19.18.

In June, the price of gold futures (GC) fell 0.79% to $1,818.10 at the end of the month.

The supply chain problem in the global economy continues to worsen.

Major chipmakers predict that supply shortages could last until the end of next year.

Gas prices in Europe have broken the record again, exceeding $700 per thousand cubic meters. The gas component in energy inflation is growing rapidly in the G7 countries.

G7 countries inflation

Energy inflation in G-7 economies

Oil market

Futures on the WTI oil in August depreciated by 6.69% to $68.50 / bbl.

OPEC+ countries have agreed to increase oil production by 400 thousand barrels per day every month, starting in August, until the pre-pandemic production is restored. This will reduce the risk of higher inflation in the context of a recovering global economy.

The next OPEC+ meeting will be held on 4th of October.

US Minstry of Energy forecast

World liquid fuels production and consumption balance. US Ministry of Energy forecast.

 SPAC

Global regulators are joining together to look into SPAC legislation.

46 securities regulators have joined the SPAC Network, set up by the International Organization of Securities Commissions to exchange information.

Key focus points:

  • SPAC — a useful alternative to initial public offerings or simply exploiting loopholes?
  • Do investors in the current environment receive a higher rating through SPAC?
  • What kind of disclosure is needed?

SPAC status by years of IPO

SPAC 2021

Total attracted funding

SPAC 2021

Source: https://spacinsider.com/stats/

IPO

The North and South American IPO market has seen a marked decrease in activity, with deals and revenues more than halving in the second quarter compared to the first quarter.

IPO market activity by quarter

IPO market activity by quarter

The index of shares of Chinese companies traded in the United States fell 30% after the announcement of an investigation against DiDi Global Inc. (DIDI).

Nasdaq Golden Dragon China Index

Nasdaq Golden Dragon China Index fell

Chinese companies planning to go public in the US are facing increasingly detailed SEC questions about their offshore corporate structures. SEC Chairman Gary Gensler asked staff to “take a break” in the case of already approved IPOs using the VIE structure.