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Strength in global markets

Basically, markets have trended higher, China’s currency strengthened and safe haven assets weakened today due to increased hopes that the US and China would be able to resolve their current differences on trade after Trump and Xi held side talks at the G20 meeting in Japan.

Europe continued the strength shown by Asia as markets were taken somewhat by surprise by Trump saying that he would not introduce more tariffs on Chinese goods, plus he also seemed to pull back a bit on his tough stance on Huawei.

There is no deal in place currently, but markets are particularly sensitive to any news on trade talks given the generally negative effect that the current stand-off is having.

This is clearly a blip for the moment and any long-term moves will depend on the detail that any agreement may have.

China’s new stock exchange

The other thing I wanted to mention today was China announcing that it would be pouring billions of dollars of domestic savings into creating a new stock exchange based on the NASDAQ in an effort to reverse flagging investment in tech.

The new exchange, which is expected to kick off in a matter of weeks, aims to give Chinese tech companies a domestic alternative to listing on the NASDAQ.

In the past, Chinese companies have sought overseas listings because of less bureaucracy and political interference as well as the chance to gain access to international investors.

However, given the current climate, they may be more receptive to a domestic alternative given massive demand in tech powering the potential of huge valuations as well as not wanting to suffer from Trump’s anti-China whims.

Interestingly, the new exchange will allow short-selling – unlike the Shanghai and Shenzhen exchanges.

Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

Peter Watson

Peter Watson

Peter Watson founded Seiha Consulting, a career transition consultancy, after working in HR and four recruitment agencies. He was also a stockbroker for 13 years in London and Tokyo, advising some of the world’s biggest financial institutions on European and Japanese stock market investment. He started writing the Daily (previously known as “Watson’s WIFI”) to help candidates prepare for interviews – but soon found that many others wanted to read it as well!

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