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March performance of Element ONE

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

Elemеnt ONE has performed -6,85% in returns during March ’21

  • Fund’s share price — $1 733,56.
  • We expect an increase in price of SPAC shares after merger deals closure, which is going to positively affect the fund’s share price.

The depreciation of the fund’s shares is caused by increased position in SPAC, which we mentioned in the January report. Most of the companies at the agreement stage and during the correction dropped to their basic values of $ 10 per share. There can be no further decline in these securities before the merger since the base value of the shares is secured by cash in the company’s accounts. Following the close of the merger deals, we expect the value of SPAC shares to rise.

Best 5 performing SPACs:

  1. Cinemark (Nyse: CNK)
  2. Immunome (Nasdaq: IMNM)
  3. Moderna (Nasdaq: MRNA)
  4. Acuity Brands (Nyse: AYI)
  5. D.H. Horton (Nyse: DHI)

As of April 1, 2021, the public idea Datto (Nyse: MSP) was trading with an allowable drawdown of 6.5%.

In the independent rating of investment analysts  invest-idei.ru Raison Asset Management is ranked 6th out of more than 50 companies.

S&P 500

In March, the S&P 500 index appreciated by 3.94%, increasing from $3817.2 to $3967.5. During the month, the index has peaked at $3978.5.

US government accepted the second-biggest stimulus program in its history, which has increased fears that the overheating economy will lead to earlier than expected rate hikes. Fears were reflected in the growth of long-term Treasury bond yields. Nonetheless, the Fed says it will keep interest rates close to zero until the US economy reaches its peak employment rate and inflation rises above 2% for some time.

CURRENCIES

Dollar index USD (DXY) has increased by 2,57% during March.

According to IMF (International Monetary Fund), the share of the dollar in world foreign exchange reserves in the fourth quarter of 2020 fell to about 59%, which is the lowest level in the last 25 years.

In the fourth quarter, the euro’s share in official foreign exchange reserves rose from 20.5% to 21.2%, while the yuan’s share rose to nearly 2.3% from 2.1%.

In March, the American currency strengthened against the Russian ruble by 1.71%. The exchange rate at the end of the month was 75.645 ₽/$.

CRISIS AND MEASURES OF SUPPORT

  • US FED Chairman Jerome Powell: The Fed will support the economy as long as it takes, we will use all the tools to stimulate the economy.
  • The US Senate passed a $ 1.9 trillion stimulus package.
  • The Fed plans to continue purchasing open market operations from $ 120 billion a month until the targets for employment and inflation are reached.
  • Treasury Secretary Janet Yellen presented a report on Biden’s stimulus package.
  • Key elements of the corporate tax plan include raising the US corporate tax rate from 21% to 28%, and introducing minimum taxes on both foreign and domestic income.
  • Profitable companies will no longer be able to use tax breaks to completely liquidate their federal tax accounts, and they will have to pay at least 15% of the profits presented in their financial statements.
  • Biden’s plan intends to eliminate all special subsidies for oil and gas present in the tax code, including deductions from the cost of drilling.
  • Biden’s administration expects to receive an additional $ 2.5 trillion in taxes over 15 years to fund infrastructure projects.
  • ECB: Extensive stimulus remains necessary.
  • QE volumes have been extended for a year.
  • ECB expects the rate to remain at the current level or even drop until the inflation rate returns to the 2% target.
  • ECB will accelerate the purchase of assets from next week under the PEPP program. Funds received from the redemption of securities under the PEPP will be reinvested until at least 2023.
  • The Bank of England is ready to increase QE if required. Additional support due to COVID-19 from the UK government will total £ 65bn current and the following year.
  • The IMF supports the introduction of a global minimum corporate tax rate.

CENTRAL BANK RATES

FED: 0,25% (previous: 0–0,25%)

ECB: 0% (previous: 0–0%)

CBRF: 4,50% (previous: 4,25%)

UNEMPLOYMENT RATE

USA: 6,0% (previous: 6,2%).

Russian Federation: 5,7% (previous: 5,8%).

European Union: 8,3% (previous: 8,1%).

China: 5,5% (previous: 5,2%).

FORECASTS

  • The Fed has improved its forecast for the unemployment rate in the United States in 2021 from 5% to 4.5%, in 2022 — to 3.9% from 4.2%.
  • A temporary increase in inflation of more than 2% is likely to occur this year.
  • The IMF has improved the forecast for the dynamics of world GDP in 2021 by 0.5 percentage points, expects growth by 6%. The forecast for 2022 has also improved, but the IMF warns that there are significant differences between countries: North America and China are leading the recovery. Germany, France, Italy and the UK are lagging behind.
  • This will be the largest growth since 1980 — after a 3.3% contraction last year, which was the worst peacetime fall since the Great Depression.

RUSSIAN FEDERATION

  • The Ministry of Economic Development expects a slowdown in annual inflation in April. According to the Ministry of Economic Development of Russia, the peak of annual inflation was passed in March. Starting from April, the annual inflation is expected to slow down by exiting the low base.
  • According to the results of April, inflation, according to the Ministry, will be 0.5–0.6% m/m. This corresponds to the range of 5.5–5.6% in annual terms.
  • The volume of the National Wealth Fund in March increased (in rubles) by 250 billion rubles, totalling 13.8 trillion rubles.
  • The Russian Federation may reduce its borrowing plan for 2021 by 500 billion rubles ($ 6.8 billion) — from 3.7 trillion rubles down to 3.2 trillion rubles. Due to the fact that the economy is beginning to recover from the recession and the budget receives additional revenues from the rise of oil prices.
  • The government is introducing constant monitoring of prices for consumer goods and services in Russia in order to respond in a timely manner to their potential growth.
  • Central Bank Chairman Elvira Nabiullina: “We believe that we will come to a neutral rate of 5–6% during the current three-year period based on our forecast.”

GOLD

In Match, the price of gold futures (GC) fell by 0,99% and amounted to $ 1,715.6 at the end of the month.

Bottomed at $1673.3

During the first quarter of 2021, gold has depreciated by 10,09%. SUch sharp price drop was stimulated by a sustainable capital outflow from Gold ETFs and on global vaccination.

OIL

In March, a slight correction was observed in the oil market, futures for the WTI mark fell by 4.5%, closing the month at a price of $ 59.16/b.

The OPEC+ meeting ended with an agreement on a gradual increase in oil production by 350,000 barrels each in May and June, and 450,000 in July.

In March, the Suez Canal was paralyzed for several days by a grounded container ship. Approximately 185 ships were stuck in anticipation. The downtime of the Suez Canal results in losses for world trade in the amount of $ 9.6 billion for each day of traffic.

COVID-19

  • The European Commission announced the beginning of the third wave of the pandemic in Europe.
  • The Europen Court of Human Rights has recognized compulsory vaccination as legal. This is the first court decision on the issue of mandatory vaccinations.
  • WHO has published a report on the origin of COVID-19 following a mission of specialists to Wuhan: the version of the laboratory origin of the coronavirus is extremely unlikely. The exact source of the coronavirus has not yet been established. 

ELEMENT ONE HEDGE FUND REPORTS FOR PREVIOUS MONTHS