Daily Brief – Reparation Loan

Reparation Loan

3.5 years in, and the EU is gradually reaching agreement on how to assist Ukraine financially – well almost. Admittedly, the principle of seizing a countries’ frozen assets is ground-breaking, but so was the 2022 Russian invasion of Ukraine and the seizing of land and assets. In case you are unaware, the proposal is for a EUR140 billion reparation loan to be made to Ukraine using Russian frozen assets primarily from Euroclear, the Brussels financial repository and clearing house where the bulk of the cash and securities are lodged . This week in Copenhagen all the EU premiers have come out in favour except for Belgian PM Bart de Wever as understandably, he does not want Belgium to be the sole defendant to any future retribution and legal action from Russia. EU Commission President Ursula Von der Leyen is trying to soothe, but something rather more than a vagueish statement that we are right behind you will be necessary before Euroclear releases those funds.

EUR/USD 1.1713.

Chinese Yuan

The inexorable rise of the Yuan continues as reported by the Bank for International Settlements. In 2019, it was in 8th position of the most traded global currencies but jumped to 5th place in 2022; the latest BIS Triennial Survey shows the Yuan still in 5th position with its share of trading up to 8.5%. In fourth place is the British Pound at 10.2%. The top 3 places belong to the USD at 89.2% which incidentally is up from 88.4% which is one in the eye for the USD doomsayers. In 2nd place is the EUR at 29.4% and in 3rd is the JPY at 16.8%. While all the anecdotal evidence is that Central Banks are repositioning themselves in USD given the USD negative mood music from POTUS, the fact remains that USD still reigns supreme and it is the CNY which should be watched. Back in 2013 it accounted for just 2% of the global FX market. 2028 could well see the Yuan overtake GBP.

EUR/JPY 172.55.

Hong Kong Property

On the back of a roaring stock market, the Hong Kong property market is equally hot. 66 companies have raised a total of just under USD 23 billion on the stock market in the past year and some of that is feeding through into the property sector. 3 properties have changed hands this year for price tags in excess of HKD 1 billion or USD 129 million. So if you discover either the deeds to a HK property down the back of your sofa, it might just be a nice surprise or, if equally you find the odd HKD 1 billion then you might want to climb abroad the Hong Kong property train but ever mindful that Hong Kong has a history of price corrections that are not for the faint hearted investor.

GBP/USD 1.3419.

Iechyd Da

A warm welcome not only in the hills, but in the ports of Wales as the Principality if not actually challenging the Caribbean cruise business is drawing in the punters with 80,000 visitors passing through Welsh ports in the past year of which 50,000 have docked in Holyhead and almost all have visited Anglesey. The Irish Sea may be bracing as opposed to balmy but this is not putting off the cruise companies nor their customers with even more expected in the next year.

EUR/GBP 0.8728.

Brenda Lee Day

This day in 1987 BL had a day named in her honour in her hometown Lithonia Georgia on the back of having 29 songs feature in the Billboard Top 40 between 1960 and 1967 including this one Sweet Nothin’s:

Uh-huh, honey
Alright

My baby whispers in my ear
Mmm, sweet nothin’s
He knows the things I like to hear
Mmm, sweet nothin’s
Things he wouldn’t tell
Nobody else
Secret, baby
I keep ’em to myself
Sweet nothin’s
Mmm, sweet nothin’s

We walk along hand in hand
Mmm, sweet nothin’s
Yeah, we both understand
Mmm, sweet nothin’s
Sittin’ in the classroom trying to read my book
My baby give me that special look
Sweet nothin’s
Mmm, sweet nothin’s

Ah, sittin’ on my front porch
Mmm, sweet nothin’s
Well, do I love you? Of course
Mmm, sweet nothin’s
Mama turned on the front porch light, sayin’
“Come in darling, that’s enough for tonight”
Sweet nothin’s
Mmm, sweet nothin’s
Sweet nothin’s
Mmm, sweet nothin’s

Have a Great Weekend!

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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