Analytics, Direct Speech, Financial Services, Investments, Latvia
International Internet Magazine. Baltic States news & analytics
Saturday, 27.04.2024, 02:30
Rietumu Asset Management experts: natural disasters have not caused problems for investors
“Neither natural disasters nor
geopolitical cataclysm did shake the moral of investors and their confidence in
tomorrow. American stock indices set new highs, while the volatility and credit
risk premium stayed at record lows,” note RAM experts in the review.
North Korea tested nuclear
bomb and fired two ballistic missiles over Japan. In return, the United Nations
Security Council unanimously adopted a US-drafted resolution to impose new
sanctions on North Korea. The hermit state showed remarkable tact and diplomacy,
it threatened to sink Japan in ocean and reduce the U.S. to ashes and darkness.
Worth mentioning that escalation of conflict on Korean Peninsula did not
meaningfully influenced financial markets.
Unfortunately, last month was
full of natural disasters. Caribbean islands, Florida and Gulf Coast was
devastated by hurricanes, Mexico experienced the most severe earthquake in a
century, and countries from Southeast Asia have seen one of the worst flooding.
The brutal natural cataclysms likely costed dozens of billions in lost economic
activity and real estate damage. However, the negative effect won’t last long,
and the economies may even experience a bump in growth from rebuilding.
The natural disasters
accidentally eased the pressure on the U.S. Treasury. The Treasury would have
been unable to handle payments on national debt by the October due to a debt
ceiling and Senate impotence to negotiate new deal. However, the debt ceiling
was making the state hurricane relief bill impossible to pass – something that
the government could not afford. As a result, debt-cap suspension was prolonged
till December 8. Therefore, expect hot debates about debt-limit issue to emerge
at the end of year.
At the end of August, the
president of France presented labour market reforms. The aim of reforms is to
make labour market more flexible, increase productivity of the economy,
decrease unemployment and raise France attractiveness for start-ups and small
businesses. Policymakers are expected to vote on the reforms in September. Overall,
European economy continued bright recovery.
“Colorful autumn took place of
sunny summer in an endless cycle of the nature. The concept of the cyclical
nature of life – infinite rotation of death and life, destruction and creation,
goes back to the origin of current civilization. An ancient symbol of the
cyclicality of life – Ouoroboros, a serpent eating its own tail, first appeared
thousand years BC. Cyclicality is also inherent in financial markets. However,
in contrast to ancient philosophy, financial markets inherited one more key
trait – growth tendency. Therefore, despite various falls and rises, an award
always awaits patient long-term investors,” say RAM experts.
The review on RAM and the
current comments of the specialists can be found here.
Rietumu Asset Management (RAM) is part of Rietumu Bank, the leading private
bank in Latvia. The company provides professional asset management services.
RAM’s products and services are intended for a wide range of investors and are
designed to meet the specific demands and needs of each customer. In the
current market conditions, RAM’s specialists offer their customers the ability
to reach an effective yield to risk ratio.