Emerging markets, cannabis and Max

The midterm elections in the USA are over and the Democrats have taken control of Congress. This has resulted in weakness in the US$ and thus a strengthening of the rand to below R14/$ (at time of writing 8 November). As mentioned in our previous newsletter, equity markets performed well after these elections in the past and we can only hope for more of the same this time around.

For those of you who are wondering what happened to Bitcoin, the 2017 star performer, the answer is nothing. After its gigantic fall from $20 000 it is currently hovering around $6400. What is interesting, is that cannabis has taken its place very quietly. There are many states in the USA where recreational use is legal and even in SA you can use it in private. Some beer companies like Molson Coors are creating drinks in which they incorporate cannabis and then there are the pharma companies that use it, like Tilray in Canada where the share price went up 231% between August and October 2018. We live in a world where not only Artificial Intelligence will become a dominant force soon, but also where past taboos are becoming mainstream.

Back at home in sunny South Africa we are seeing a different kind of force developing according to Max du Preez. At a recent Old Mutual International conference he had only good things to say about the Ramaphosa/Mboweni team. He believes that although there are too many political speedbumps hampering transformation in SA after the Zuma devastation, things are changing and one by one the bricks of corruption an maladministration are being removed by this powerful team.

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