Connect with us

Global Affairs

Cold War in the Financial Markets

 2 min read / 

Headlines scream globally. Another disastrous fatality for Malaysian Airlines, following the crash of flight MH17 in Ukraine on route from Amsterdam to Kuala Lumpur. Various sources from the US intelligence authorities to the BBC have reported a ‘surface-to-air’ missile brought down the plane. Of course, it will not be known until a full inquiry has been conducted by the UN Security Council to understand the arising issues at hand. However, from a legal perspective, it is the state that has accountability in which the accident or incident occurred. Yet, such an international disaster will conflict to such legislation, and will inevitably spark an international inquiry.

Financially, the Russian stock market suffered the repercussions, suffering huge losses from 0.5% to 3.8%, as a result of the US’ hard sanctions placed against Russia’s financial markets and major banking institutions. Namely, these are the prohibition of US firms to provide financing to major Russian banks and energy firms. The danger of this is heightening a sense of fear and tension across US and European markets. Western financial markets, particularly those trading in London and New York, must tread with caution if they are to make profits from ‘shorting’ the Russian stocks. More importantly, it possibly alludes to the end of future money-making opportunities in Russian financial markets, announcing a West/East divide.

Hilary Clinton, former Secretary of State, stated and possibly suggested that Russia’s economy should be weakened in an interview on The Charlie Rose Show: “If there is evidence linking Russia to this…Europe should be inspired to do three things. One: toughen sanctions – making it very clear Russia should pay a considerable price, particularly in finance. Two: accelerate efforts to find alternative methods to Gazprom (Russia’s third largest bank).” She further points out that Russia’s economy has not diversified, providing examples that it is largely dependent on natural resources.

The effect of Obama’s administration in placing these sanctions will likely cause fear across the global financial markets. This could ignite a political war against Russia, and cause the markets to become extremely unpredictable and volatile. Having just recovered from the crisis in 2008, and with growing tensions amidst the housing bubble (alluding to a pre-financial crisis); such an event could remain a turning point in sparking a crisis beyond the public’s fears. Confidence is key – that ingredient is lacking heavily.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Asia

Japan Is Behind Bitcoin’s Rise

Japan Bitcoin

Deutsche Bank released a research note saying that Japanese investors account for bitcoin’s meteoric rise.

Deutsche Bank analysts have said they believe that individual Japanese foreign-exchange (FX) traders are instead moving towards leveraged cryptocurrency trading in the search for astronomical returns. Already, Japan makes up 50% of the world’s leveraged FX trading and Nikkei recently said that 40% of cryptocurrency trading was denominated in yen throughout October and November. Evidently, the Japanese are growing tired of years of ultra-low interest rates and are turning to the blockchain to boost their savings.

Keep reading |  1 min read

Global Affairs

Breakfast Briefing: Disney Buys 21st Century Fox and Snap’s Studio

Disney Fox

Disney Buys Up Murdoch Assets

Disney has bought assets in Rupert Murdoch’s empire in a deal worth $66bn.

Editor’s Remarks: 86 year-old Rupert Murdoch is set to rapidly downsize his business holdings by selling 21st Century Fox to Disney. Before the sale goes ahead, Murdoch’s Fox News will complete its planned acquisition of the 61% Sky that the company does not already own. Once complete, Sky will join other Murdoch assets such as Hollywood studio 21st Century Fox in Disney’s expanding portfolio. Disney CEO Bob Iger has confirmed he will remain in his position until 2021 and also consider a position for James Murdoch after the acquisition is complete.

Delta Opts for Airbus

Delta Air Lines bought 100 jets from Airbus instead of its rival, Boeing.

Editor’s Remarks: In a deal worth over $12.7bn, the budget North American airline chose to back Airbus by buying a large order of its A321neo jets. The airline will take delivery of the single-aisle planes in 2020 and has retained the option to purchase a further 100 jets. Meanwhile, Boeing will be licking its wounds as it now turns elsewhere to offload its 300 brand new Max 10 737s. The deal follows another large order of Airbus planes by Delta in 2014, when the carrier purchased 50 wide-body aircraft for $14bn. The last time Delta bought a major order of Boeing planes was in 2011, when it purchased 100 737s.

Capita Crashes 14%

The troubled UK outsourcing giant plunged 14% after it announced that 2017 had been subdued.

Editor’s Remarks: Capita has plunged 68% over the last two-and-a-half years as it has suffered setback after setback relating both to the quality of it services and increasing competition for big ticket contracts. The company announced that although 2017 has been in line with expectations, contract wins have come in below expectations. The sharp fall in Capita’s share price reflects how the UK stock market is presently hyper-sensitive to even the faintest whiff of a profit warning. Capita’s collapse is a huge blow to Neil Woodford, the prominent UK fund manager, who has suffered similar falls in a number of his other large holdings since the Brexit vote.

Japan Is Behind Bitcoin’s Rise

Deutsche Bank released a research note saying that Japanese investors account for bitcoin’s meteoric rise.

Editor’s Remarks: Deutsche Bank analysts have said they believe that individual Japanese foreign-exchange (FX) traders are instead moving towards leveraged cryptocurrency trading in the search for astronomical returns. Already, Japan makes up 50% of the world’s leveraged FX trading and Nikkei recently said that 40% of cryptocurrency trading was denominated in yen throughout October and November. Evidently, the Japanese are growing tired of years of ultra-low interest rates and are turning to the blockchain to boost their savings.

Snap Opens Online Studio

The studio will enable brands to build adverts that individuals users can include in their own snaps.

Editor’s Remarks: Snapchat is adding another trick to its repertoire by allowing users to add branded animations to the existing arsenal of augmented reality lenses This is not a wholly new innovation as advertisers can already sponsor lenses, although there is a hefty minimum spend of $300,000 and a current need to work closely with Snap’s design team. However, the new studio will enable advertisers to create their own adverts, which will then need to be accepted by Snap before they are given the green light. The move is part of Snap’s wider efforts to diversify their revenue streams.

 

Keep reading |  3 min read

Asia

Japanese Startup Ispace Raises $90m

Ispace

Ispace Inc raised $90m from Japan’s largest corporates in a bid to reach orbit by 2019. 

Ispace is backed by Japan Airlines, Tokyo Broadcasting System Holdings and also government-backed Innovation Network Corp. of Japan. The company plans to sell advertising space on its spacecraft, which will then feature prominently in distributed images. However, Ispace also envisages the use of rovers that will offer a “projection mapping service”, which will essentially produce a tiny billboard on the surface of the moon. This is the latest announcement in what is rapidly shaping up to be a wider commercialisation of space exploration. Elsewhere, SpaceX and Blue Origin are developing reusable rockets, while Planetary Resources intends to mine asteroids.

Keep reading |  1 min read

Trending