Yevhen Pentsak's advice: the dollar doesn't diminish, so be it demeaned

Tags: investment portfolio, exchange rate, real estate, NBU, crysis, fund market, Yevhen Pentsak

This week’s headlines: banks’ sector balancing on the brink of downfall, continuous scheming for power at the top, property keeps still, vacation-related expenses gaining pace in Ukraine.

Politics: as we had anticipated the political intrigue around BYT and PR happened to devaluate up to the level of routine power scheming and eventually resulted in reciprocal accusations and later personal acquittal. Disturbing pres Yuschenko’s equanimity had been aimed first of all at his probable stumbling over banana skin, and that was one of the tricks in his opponents’ game. A most delightsome goal for any observer now is getting to know the underlying cause of collapse for the negotiations. It may well be that some invisible power players have entered the game to give the naughty politicians a good slap on the wrist. Carrot-and–stick technique is still in the issue internationally and especially in Ukraine which has stayed amid the financial crisis tension for quite a while. Arseny Yatseniuk is going to compete with Yanukovich once both of them have made the second round of election. The role of the former in this game is quite ambiguous: he either is supposed to distract Tymoshenko’s constituent body from her or to set up a jumping board for the 2015 election campaign, who knows?

Stock market: everyone is awaiting summer correction here. Bank sector is supposedly to give way most dramatically. Banks’ overdues have increased as much as ten times as sources from the banking community say. Economy’s revival will allegedly start up with the recovery in metallurgy sector, thus Azovstal and Alchevsk metallurgy plant tickers will be the options for an interesting summer play. Threats like political turmoil, problems of the economy at large and bank sector in itself have kept slowing down the Ukrainian Eurobonds. Gold drifted from $980.00 to $955.00/troy ounce.

Real estate: there’s a steady decline trend here and the price of sort of UAH4700 per square has ceased to be any more attractive either for public or for resellers. Further drop of prices down to the level of UAH 4000.00 per meter square is highly expected here as averaged down by the creditors’ (mostly banks’ and investors’) pressure.

Currencies: $/€ is hovering around 1,4 and $/UAH will remain at UAH7,5 point. in my opinion, in order to get the market moving NBU has to play some “wave game”, that is, it has to initiate a vague dollar decline (say, less 10 kopek per week) so as to rig the realty market through funding it with the cash which now is resting outside the bank system and swing further dollar buy-out not later as mid august. That will ultimately provide for some “jump board” for the dollar to rally in autumn. Volatility in the heterogeneous market is urging the players to take steps, big time.

So, we keep holding to the usual portfolio mix of:

  • 35% - UAH,
  • 30% - dollar,
  • 30% - euro,
  • 5% - gold (bar and paper).

See also:

Мысли среди недели: индуктивные и дедуктивные методы исследования фондовых рынков

Очень часто мне приходится дискутировать о применимости тех или иных финансовых теорий к текущему анализу рынков, осуществление на его основе прогнозов и инвестиционных решений. Еще чаще мне приходилось наблюдать за спорами теоретиков и практиков на финансовом фундаменте. Меня всегда удивляло, почему они спорят? Ученые и исследователи используют общепринятые модели, описанные во всех классических учебниках, их знает каждый магистр по финансам. Почему выводы этих моделей не нравятся практикам?

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