Making money: what the experts think
● China’s Nasdaq The launch in Shanghai of Star Market, a new Nasdaq-style stock exchange focused on tech stocks, “was accompanied by wild speculation”, said Nils Pratley in The Guardian. Every stock surged in value and one, the chipmaker Anji Microelectronics, “rose 520%” from its float price. The authorities “would be well-advised to calm proceedings”. China, after all, has been down this route before with an exchange called ChiNext, which was “tarnished” by scandals. Star Market has launched “with the promise of higher governance standards”, but it will be interesting to see “how it copes with its first bear market”. Still, the timing of this launch is impeccable, said Lex in the FT. Tensions with the US mean “Chinese unicorns are turning away from New York”; meanwhile, investment cash is flowing into China. Some $70bn of inflows are expected in August. Star Market “should help soak” that up.
● Golden days Great news for “gold bugs”. The price of the precious metal has hit its highest level in six years, said Jasper Jolly in The Guardian. Gold hit a new peak of $1,452.60/oz last week, as investors braced for an interest-rate cut by the US Federal Reserve, and sought a safe haven from global political tensions. Demand has been boosted by the fact that sovereign bonds – another favoured safe haven – have become so popular that the safest are now “negative yielding, meaning that investors are effectively paying for the privilege of lending money”.
● Growing momentum
It’s not just the usual “rent-a-cranks” who are making the case for gold, said Tom Stevenson in The Daily Telegraph. Influential investors are also piling in. Ray Dalio, who heads the $150bn firm Bridgewater Associates, has been “touring the TV studios” talking about a “paradigm shift” in markets as “ever more desperate” central banks resort to measures that devalue paper currencies. Gold, after all, is “a great diversifier” – an important consideration when “bonds and shares have started moving in lock-step”. The easiest way to gain exposure is via an exchange-traded fund which tracks the price. Alternatively, invest in mining shares: either directly, or via a fund like Investec Global Gold.