Upload
others
View
0
Download
0
Embed Size (px)
Citation preview
Investment OpportunitiesIn A Growing Crisis
Nicholas Tan (CMT, CFTe)
Associate Director LFX and CFD
Alternative Products
UOB Kay Hian
2
Current coronavirus crisis1
2
3
5
Impact on the global financial market
Market outlook during this crisis
Trading strategies and ideas
4 Investment opportunities during this crisis
2
Themes
Background On Coronavirus
Asia• China
• Japan
• South Korea
Europe• Italy
• France
• Germany
• Spain
USA
3
About The Coronavirus
4
Impact Of COVID-19
Asia• China
• Japan
• South Korea
Europe• Italy
• France
• Germany
• Spain
USA
Economic Impact
• Lockdown of towns
• Shutdown of factories
• Tourism
• Travel restriction
5
Impact Of COVID-19
Top 10 Economies of the World1. USA
2. China
3. Japan
4. Germany
5. India
6. UK
7. France
8. Italy
12. South Korea
% Share of Global Economy
USA
China
Japan
Others
Source : Investopedia
6
Impact Of COVID-19
• Drastic slowdown of China’s economy
- Caixin Services PMI 26.5 vs previous 51.1
• Lockdown of Europe
- Lockdown, travel ban, closures of border
• US economic slowdown
- Expectation of economic slowdown led to almost zero US
interest rate
• Japan economic slowdown
- Second stimulus package
7
Impact Of COVID-19
Expectation of a global recession
• Massive responses from government and central banks
- Fed cut interest rate to almost zero
- Government stimulus to offset virus impact
• Economic fallout has outpaced responses
• Economic fallout to produce global recession that is worse
than 2008?
8
Market Outlook During These Periods
Equity Market Decline
9
Market Outlook During These Periods
• Equity market declines
• US dollar strengthens
10
The Dollar Index
US dollar declines as US
equity market declines.
Dollar has strengthened
since 3rd March 2020
on funding pressure.
11
Investment Opportunities During Crisis
Equity Market Decline
12
CFD Indices
1. Dow Jones Index
• US30
2. S&P 500 Index
• US500
3. Nasdaq Index
• USTEC
1. Hang Seng Index
• HK50
2. Nikkei 225
• JP225
3. Australia Stock Index
• AUS200
Asian Stock IndicesUS Stock Indices
13
1 point in DJIA = US$1 Opportunities exist in trading CFD Indices
14
Investment Opportunities During Crisis
Investment Opportunities During Crisis
15
Gold Product Specification
Standard Contract Size
• 100 oz per contract
• Gold price US$1,500/oz
• Contract size $1,500 x 100= US$150,000
• Every $1 movement = US$100
16
Gold Trading Fee
Trading Fee
• No commission
• Typical US$0.30 - 0.33
• US$30 - $33 on 1 Standard contract
17
Worries Over COVID-19
Gold rallied while Dow dropped 1800 points
18
Correlation Gold And Equity
Inverse Relationship
• Dow Jones Index declines
• Gold tends to rally
Used as a hedge to reduce portfolio volatility by fund managers
Retail investors can switch from equity to Gold
Buy Gold ETF or Gold miners’ shares
19
The Currency For China
• Renminbi or Yuan
• USD/CNY- Official exchange rate
- Fixed by PBOC
- Fluctuation within a band from fixing (mid-rate)
• USD/CNH- Since 2010
- Deliverable offshore Yuan
- Rate differs from CNY
20
USD/CNH Trading Characteristics
21
Trading With The Chart
22
Analysis Steps
1. What is the trend?
2. Where is the support/resistance?
3. Momentum study
• Can price go to the next support/resistance?
4. Decision – Where to enter/exit?
23
24
Questions & Answers
24
Disclaimer
No part of this document may be reproduced or copied in any
form or by any means without prior written permission/consent
of UOB Kay Hian.
No warranty or representation, express or implied, is made
with respect to the information set out in this proposal, nor will
UOB Kay Hian be responsible for the consequence of reliance
on any opinion or statement set out herein.
2525