Week In Review

  • The Wall Street Journal pointed out this Monday that China has steadily increased its purchases of US crude oil since May.
  • Bloomberg announced this Tuesday that Singaporean sovereign wealth funds, GIC and Temasek will participate in the Ant Group IPO, with the former reportedly making a $1 billion investment.
  • It was reported this Wednesday that over 400 million Chinese are vacationing domestically during the Golden Week holiday. Thus, it is no surprise that consumption plays are performing well this week.
  • On Thursday, Ping An Insurance-backed company Lufax Holdings filed for a New York Stock Exchange listing under the ticker LU.

Key News

Let’s not bury the lead: THE STRONGEST SINGLE DAY OF PERFORMANCE FOR THE RENMINBI VERSUS THE US DOLLAR IN 15 YEARS! The renminbi (RMB) moved $0.09 versus the USD last night! You might remember how China “devalued” its currency back in August 2015. Last night’s move was almost the same magnitude as 2015, but the other way around! Regardless, back then the headlines SCREAMED about the “devaluation” for weeks. Don’t get me wrong, Summer 2015 was awful as China’s Mainland stock market fell and then the currency drop left a Grand Canyon-sized wrinkle in between my eyebrows. However, with such a strong move to the upside, I would have expected at least a few headlines covering the RMB’s historic positive move last night… (For my friends in Europe & UK, the appreciation wasn’t as pronounced versus the Euro or Pound.)

While I have your attention, I will point out the growing disparity between MSCI’s
definition of Chinese A-Shares and domestic indices such as the CSI 300. MSCI added mid-cap stocks to its definition of A-Shares in November 2019. My colleagues and I have been pounding the table about how the mid-caps gave MSCI’s

Views of Ottawa, Ontario and the Canadian parliament buildings. (Photo by: Matthew Bailey/VWPics/Universal Images Group via Getty Images)
Views of Ottawa, Ontario and the Canadian parliament buildings. (Photo by: Matthew Bailey/VWPics/Universal Images Group via Getty Images)

New home prices are up in most Canadian cities, despite the devastating economic effects of COVID-19, while resource-based markets continue to struggle.

Ottawa is the country’s hottest housing market for new builds, excluding condos and apartments, according to data in Statistics Canada’s New Housing Price Index. The agency says new house prices rose 5.3 per cent between February and August, due to strong demand and low supply.

The nation’s capital was already riding a wave of momentum before the virus, with a 9.5 per cent annual increase in February. Statistics Canada says the pre-pandemic strength may have been attributable to a foreign buyers tax in Toronto and Vancouver. 

Jason Ralph of Royal LePage Team Realty agrees with the assessment.

“New build home sales in Ottawa are being driven by an extremely tight resale market.  Many buyers are looking to buy new instead of competing in multiple offers with the potential of paying well above the asking price,” he told Yahoo Finance Canada.

“Ottawa has also seen a rise in investors looking for an alternative to Toronto and Vancouver, with the Foreign Buyer Tax still in place. To top it off, interest rates are historically low creating an incredibly strong market in the Nation’s Capital.”

Sumit Beri, works and lives in Ottawa and also thinks low interest rates will help push prices higher. He bought a new build last month as an investment.

“I didn’t want to get into bidding wars for older homes, so I thought buying a new build would give me more bang for my buck and capitalize on the appreciation of the home in a year,” he told Yahoo Finance Canada.

Beri says his decision had nothing