Hello dear readers! Today HNFC publishes its first Newsletter for you. We hope you’ll enjoy it and do not hesitate to leave a comment or make some critics as we sure need to improve our skills. Let’s move to our Newsletter and here is the weekly update from HNFC: Syria, US, Warren Buffet and Arts.
Critical state in Eastern Ghouta
Bachar-Al-Assad struck again on Saturday March 3rd. The Syrian regime stepped up land-attack missions against the rebels in Eastern Ghouta, Syria. This area, which has suffered from bombings for more than 4 years, is knowing one of the most critical states ever. More than 375 000 refugees are trying to survive despite the inhuman circumstances.
To remind you, the region of Goutha is located in the east of the Syrian capital Damas. It has been a rebel stronghold and a target of daily bombings and chemical attacks since 2013. Dozens of civilians are victims of numerous food and medicines shortages. Since summer 2017, the region is supposed to be one of the “de-escalation areas” set up after an agreement between Russia, Iran (the Syrian regime’s main support) and Turkey. But bombings have never stopped. At the beginning of 2018, the Syrian regime began to launch violent air offensives upon the Syrian population.
Today and more than ever, civilians are threatened and shamefully abandoned. In 2017, UNICEF already denounced the worst food crisis since the beginning of the war, with 11,9% of the children under 5 years old suffering from strict malnutrition. At the beginning of February, the United Nations declared that they have “obvious proof” of the Syrian regime using chlorine during the attacks in the Goutha enclave. Last Tuesday, the UN asked the Syrian regime to stop bombings and denounced that six hospitals were destroyed in the past few days. The NGO “Médecins sans frontiers” also denounced a “terrible medical disaster” in the rebel enclave. According to the organisation, 15 of the 20 hospitals supported by Médecins sans frontières have been bombed. On Thursday March 8th, Syrian authorities still prevented aid convoys, sent by the United Nations, from passing.
Two days after the adoption of the Security Council’s resolution about a 30 day-ceasefire in Syria, the Russian President Vladimir Poutine ordered the establishment of a daily “humanitarian truce” in Eastern Ghouta. Unfortunately, this truce didn’t last a week since the Russian regime has helped Bachar-Al-Assad during the last Saturday attacks.
The international community never fails to denounce the Syrian regime’s attacks on his own people, but it doesn’t change anything. The French President Emmanuel Macron, and the UN secretary-general Antonio Guterres both announced their “serious concern” about Syria’s critical state. Emmanuel Macron asked his Iranian counterpart Hassan Rohani on Sunday March 4th to “apply the required pressure” on Bachar Al-Assad’s regime in order to put an end to these attacks.
However, according to the Syrian Observatory of Human Rights, the Syrian army supported by Russia and Iran succeeded to get a quarter of Ghouta back. Even the American President Donald Trump blames the attacks: he just assimilates them as “a humanitarian disaster” and declared that the Syrian regime and Russia are responsible for the Syrian people’s huge harrowing pain.
Donald Trump announcement about protectionists measures:
After campaigning for his truly loved America and its economy, Donald Trump is making significant movements toward a more protectionist economic policy.
Indeed, on the first of March, he announced surprisingly that a new tax policy is going to beimplemented next week. Steel and Aluminium are going to be respectively taxed at 25% and 10%. By justifying this decision because of the poor looking of the American industry in this sector, Donald Trump is clearly putting producers and the commodities’ market under pressure. Canada, South Korea, Mexico and Brasilia are amongst the top suppliers of steel for the USA and will undeniably face a decrease of exportation. Actually, it is the whole economy which is concerned. Germany, Russia, the EU and many more countries are worried about this decision and also about the possibility of the incoming ones. What is the next sector to be brutally regulated? Oil? Coal?
What is sure is that Donald Trump is decided to make significant economic decisions to protect its country and to destroy what he sees as “a potential threat for the US economy” as he remains convinced despite several criticisms even from his own party.
Economists present the situation as a potential commercial conflict between the USA and the world… Not sure there will be a winner.
“Social Good Week”
“Internet cannot be limited to web giants and their corporate approaches because we do not believe that they have the promised social impact”
From March 7th to 14th, 18 French cities welcome the “Social Good Week”, organized mainly by “HelloAsso.com”, a French crowdfunding website dedicated exclusively to the funding of association projects.
During this week, there will be debates, initiation to coding methods or training on connected objects. The topic is how new technologies related to Internet can serve the public interest. There will be also a presentation of “Meet your buddy 2.0”, an online initiative from Singa or also on “How homeless people use numeric resources”.
These events show a new trend in the modern economy: more and more entrepreneurs in technologies are concerned by their social implication and impact. Universities and Business Schools are aware of those evolutions and already offering Master degree oriented on this subject. Also, governments are moving toward this direction (see the second part). Thus, we are witnessing the birth of “social entrepreneurship”.
Press box from social oriented leaders to make the French government aware
This week, four leaders of social oriented organizations wrote in a newspaper about the draft of a new French law: “Pacte”. The purpose of this law is to simplify the transmission rules, promote access to financing, develop employee incentives and reform the corporate purpose. In brief, to help SMEs to grow within the context of international competition.
It should also enable companies to improve their social and environmental responsibilities if they want to, thanks to the creation of a new corporate status: mission-based company.
Hence, the government encourages the engagement of citizens, consumers, investors in a positive way. It also secures companies conduct actions other than profit-seeking to be able to do it within a secure legal structure. This is a step forward in corporate social and environmental responsibility. This new mission-based company status will enable many companies to get engaged in a more responsible economy.
However, the “Mission-based company” must not interfere with the legal and financial framework of social and solidarity companies which already exist. The creation of a new status should not destroy another.
FED President, Jerome Powell’s assessment worries Wall Street.
Jerome Powell, the US Federal Reserve’s president worried Wall Street last week after his testimony about the pace of interest rates rises. Saying that the US economy is strengthening and the wages are getting higher, Jerome Powell suggested that a faster hike of the interest rates will be done by the American Central Bank. This rise will aim the 2% inflation. The inflation rate in the US was about 1,5% but the FED president estimates that the economic growth notably due to the new fiscal policy will increase the inflation rate to the 2% targeted and even above.
After this announcement, last Tuesday, Wall Street known a notable decline. The market is worried about more interest rates increase than the 3 expected in 2018. The hike in the interest rates increases the debts’ cost for companies, explaining the regress of Wall Street.
Warren Buffet leaving Kraft, new aggressive acquisition politic?
The American billionaire, Warren Buffett has declared he’s leaving the board of the food-and-beverage giant “Kraft Heinz” because of his willing to reduce his travel commitments. The fact that Warren Buffett is leaving is seen as pivotal for the future of the company. The billionaire has always been against a politic of aggressive acquisitions wanted by the second major member of Kraft’s board, 3G Capital. Indeed, 3G has built up empires such as Burger King in food through bold and aggressive acquisitions. The retirement of Warren Buffett will therefore impact the food industry and the financial markets.
There are rumours about acquisitions of Danone, PepsiCo and Mondelez International. These rumours have already impacted the financial markets, with Danone which has gained 2% in the CAC 40 for example.
How Art will dominate the luxury investment sector in 2018
Art investment is expected to be one of the top luxury investment sector in 2018, despite its huge downfall in the early 2010s. A shining symbol of this resurgence has been the sale by auction of Da Vinci’s famous Salvatore Mundi for a record $450M on the 15th of November 2017. Art has known though times before reaching this peak. Fine Art is a world for wealthy people and after being hurt by the 2008 crisis, the sector suffered. Despite resisting for a few months through the storm, from the beginning of 2009, the market saw a drop of 30% in its overall volume and was a victim of series of high-profile disputes, court auctions and authenticity issues leading to a fall-off in attendance at Art auctions. Hence, major auction houses like world-famous Christie’s and Sotheby’s were forced to make substantial changes to their business models, taking more risks and dismissing large groups of employees. The good news is that art quickly recovered from a disastrous year 2009. From 2010 to 2016, art knew 6 strong years growing to approximately 13% a year. It has a lot to do with the strong entrance of Chinese investors in the market, helped by their government expansionary monetary policy.
Recently, the Luxury Investment Index made by high end estate agent “Knight Frank”, showed that art had the second highest performance percentage over the last 12 months, right after fine wine. Rich people have returned to the market according to Knight Frank.
When it comes to Art sold at auction, value increased by more than 16% over the past year only. Andrew Shirley, author of the Luxury Index, is confident about art’s future: “We are predicting that art will comfortably overtake wine as the best-performing asset class this year”. According to him, the Salvatore Mundi auction is the first of many more selling, “There are plenty of selling for £50M, $100M, $200M, the confidence is definitely back.”
What does it mean for the painting you recently bought to match your sofa and coffee table? Its value may very well increase in the next few years.
Don’t hesitate to comment, share or like the Newsletter! If you have any adjustments to propose please feel free! See you next week ;)
Edited and Corrected
by Vee Venski
This article is not a promotion of financial investment. Investing money in financial instruments is risk-reward process. Losses and gains are part of financial investment process. Only invest money you can afford to lose.