Economy & Capital Markets:

On June 15h the effect Federal Funds Rate was raised to an average of 1 5/8ths %, with its projection for the year-end raised to 3.4%. US 10 year bond yields are now hovering around 3% after the bond price had fallen 17% from its highs, whilst the S&P 500 has fallen 25%. Belated quantitative tightening of $95bn per month will only make a small dent in the over ample money supply that would allow growth and employment to be maintained. If the Federal Reserve Bank were to increase further projections it would reflect badly on stock-markets.

Irrespective of inflation expectations, global governments’ social program, to removed self-reliance by, encouraging the labour force to abstain whilst borrowing from their children, have made a serious dent in productivity that make recession probable.

Expectations of Republican gains in the November 8th mid-term congressional elections, remain.

On 24th February, Russia launched a large-scale invasion of Ukraine, several significant trading partners imposed varying financial restrictions on Russia. Crude oil prices remains elevated but are still half of 2008 highs.

In April, the Peoples Bank of China reduced the reserve ratio for financial institutions by 0.25% leaving it at a weighted 8.1%. In May, the reserve requirement ratio for foreign currency deposits was reduced by 1% leaving it at 8%. A RMB200 bn facility at 1.75% to finance 60% of loans by banks for sci-tech innovation was launched. A RMB 40bn facility at 1.75% was launched for financing the loans to elderly care institutions. A further RMB100 bn was released making a total RMB300m facility, to finance clean and efficient coal for electricity.

The ECB intends to raise interest rates by 0.25% in July and again in September. The asset purchase program will only invest maturing principal payments. 3mth EIBOR is expected to rise to 1.6% by 2024, and EU10 year bond yields to 2.1%. Real GDP growth is expected above 2% though to 2024, with unemployment above 6%.

Kings’ Portfolio (Global Mega Cap Long/Short Equity Investing):

Following a disastrous first quarter, the strategy has now outperformed US & Global equity market indices in both absolute and risk adjusted returns for the year. Year to date, the strategy has fallen 16%, with unfortunately 10% occurring in the last 10 trading days of the quarter. In the last quarter long pound sterling contributed a 4.95% a loss to the portfolio, long Valaris (offshore – energy) 1%, long RPC (USA – energy) 0.89%, long Paladin Energy (Australia) 0.85% and long CNX Resources (USA – energy) 0.64%. A residue short position in Brilliant Motors (China automotives), that is held is at profit, was removed from exchanges in the USA and awaits the lifting of suspension in Hong Kong to liquidate. A position in Everaz & its spin off Raspadskaya (Russian steel & coal) is suspended in London, although most of the value has already be depreciated.

Belsize Strategy (Macro & Global Futures Trading):

In May 2021, with the advancement of the firms AI abilities, this long-standing strategy that provided excellent returns during the 2007/8 financial crisis restarted. Following calibration of the artificial intelligence, in the final third of 2021 the strategy eked out a profit but, Q1 2022 had a small loss. Further refinement have led to sustained profit generation in Q2 2022.

Private Equity Strategy (Illiquid Investments):

In 2021 Q2 the firm added five position (including reservations) to its first venture capital investment in 2019. Sector breakdown now stands at: 29% media & entertainment, 22% communications, 18% real estate, 18% finance and, 8% food and beverage. The technology breakdown in the portfolio consists of 60% apps, 20% hardware, 10% sharing economy and 10% e-commerce. The firm makes no positive discrimination except for the combination of good ideas and teams, however the initial investment was to a female managed business and, we have further invested in one black and two Latin managed businesses. The female managed business was found to be providing false sales reports and, was acquired for stock in a company with a larger consumer base at an unknown valuation.

Crypto Currency Strategy (Inter-day Trading):

Due to the rapid development of the firm’s proprietary AI, in June 2021 a crypto trading strategy was initiated, across 11 currencies each with a market capitalisation over $1Bn. In the second month of 2022 a loss was recorded that erased the profits from the previous 10 months. The strategy has been trading flat since then.

Artificial Intelligence & Technology Development:

The firm continues refinement of existing techniques and adoption of best practice. Human language analysis to identify non quantifiable impacts on capital markets, is in further development. The firm also looks to develop consultancy and possibly software offerings to non-financial firms. A huge database to assist with venture capital and private equity investment opportunities is being processed.

Firm Operational Update:

Since 2015 the firm has been maintained as a Californian Registered Investment Advisor (RIA) within FINRA and SEC USA government oversight. The firm will seek to establish a US firm to provide a regulatory umbrella for existing clients. Until that time client assets will be managed on a casual non-professional basis, with reduced contractual liability.

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