We are glad to inform you that in October 2015 the assets value of the WellMax investment portfolio increased by 1.16%! Congratulations! Please find hereby our economic review of the previous month.
As usual, in October earnings from bond investments were basic to the WellMax portfolio ROA. Worldwide the bond markets of issuers showed good results in the previous month. Thus, we witnessed some pickup in the markets of China, Russia and Brazil. We used the favorable opportunities and carried out some purchases and changes of our bond portfolio.
The market of risk yassets traditionally tended to sharper alterations, but still we had given a correct forecast of it earlier. In October, the main in come from the risky securities management was determined by running down of the US biotechnological companies` stocks as well as price change for some raw materials assets, such as stocks of the Brazilian sugar manufacturers. Cycling changes of oil prices also contributed to our extra income.
The fall in value of biotechnological companies, which we talked about in our September review, continued in the first half of October. This decline was foreseen by our specialists even earlier – in July and August, as far as financial indicators of these companies significantly differed from indicators of companies in other sectors, including the e-commerce sector.
As we had expected, the US assets market suffered a correction, but then returned to the previous figures and firmed up.
Still, the accounting policy of the US monetary bodies continue irritating markets and investors in some way.
In the last month oil companies stocks carried out great price movements and this helped us to gain extra profit. We are closely following shale oil production. A possible further decline in its extraction allows expecting volatility heightening of oil prices together with oil companies` stock prices in the 4th quarter of this year and in the 1st quarter of the next year.
The Brazilian market continues witnessing significant price changes for assets, which are determined among others by climatic factors. The possibility of the El Niñonatural phenomenon also will influence the assets prices of the countries in the southern part of the Pacific region and can have an impact upon the world market of food.
As we had predicted in September, the Chinese authorities managed to stabilize the state economy. Anyway, the situation remains shaky, and the authorities are taking further steps. Itpossiblethatthe country leaders` statements regarding a necessary annual growth of 6.5% during the next few years demand additional stimulating measures. This kind of actions can lead to a certain yuan devaluation that will positively influence oil and other primary goods demand.
The same as a month before, the situation in Russia and Kazakhstan looks steady with a conserved probability of difficulties in these economies in 2016 and no vector of development suggested by the governmental bodies.
It should be mentioned that success of the Russian international policy made it possible to expect the return of foreign investment capital to the country. We witnessed the first signs of this process when Sberbank and Yandex quotes rose.
At the time in Russia some budget disbalance remains that leads to reduction of the Reserve Fund and the National Wealth Fund. The recent statements of the authorities and changes in pieces of legislations confirm expectations of a soon increase in tax control after private individuals` income.
It seems to be that the European economy and stock markets coped with just another chapter of challenges. The decisions made by the US and EU monetary authorities contributed to the recovery of optimism among the market participants. The influence exercised by the refugee issue upon the market sentiments lost some of its importance. The markets` attention is attracted by more common European questions related among others to elections in a few countries.