In a year marked by trade wars and political instability, Saxo Bank, the leading Fintech specialist focused on multi-asset trading and investment, has announced American technology firms as the most traded among its UAE based clients in 2018.
Saxo Bank’s most traded stocks list reveals UAE investors favoured US technology stocks, with Tesla Inc. ranked number one, followed by Netflix Inc., Microsoft Corp., Amazon.com Inc. and NVIDIA Corp.
For investors and traders this past year was a long roller-coaster ride with new all-time-highs and a spike in volatility. This offered both opportunities for the savvy trader and revealed the importance of proper risk management and a well-diversified portfolio.
Peter Garnry, Head of Equity Strategy, commented “2018 started crazily with the best January in decades and then swung into mayhem in February. What came next was even more surprising. The US equity market came back with lightning speed, erasing more than half of the losses and looked solid until mid-March when the market sold off again, touching the lows from February. Panic was in the air, but things stabilised and US equities managed to stage a new all-time-high in September despite growing tensions between the US and China”
“However, under the surface cracks were spreading in emerging markets as China’s equities slipped into bear market territory and the stronger USD and oil price hammered the consumer in emerging markets.
“Sentiment accelerated to the downside taking down the S&P 500 by -20.2% at the low point. Trump’s aggressive stance against China also played its part in souring sentiment.”
The most traded stocks in Saxo Bank globally with % return 2018 are Facebook Inc. (-25,7%) , Amazon.com Inc. (+28,4%) , Alibaba Group Holding Ltd. (-20,8%), Tesla Inc. (+6,9%), and Apple Inc. (6,79%).
Peter Garnry comments on the five most traded stocks among Saxo Bank’s clients:
The stock was down 25.7% in 2018 as Facebook experienced its annus horribilis moving from scandal to scandal. Investors are increasingly worried about future profit growth as the founder and CEO Mark Zuckerberg has indicated that profit margins would likely come under pressure as the company invest more in security of its platforms. Capital expenditures have been rising almost 400% since 2015 outstripping the rise in cash flow from operations. As a result, Facebook’s valuation has declined to levels just around the average for the S&P 500 Index. You may say that Facebook has finally matured both as a technology and publicly listed company. This year Facebook will likely continue to be a closely watched stock as it’s one of the strongest consumer brands in modern time but also in the crosshair of regulators and politicians looking to score populist points with the electorate.
Amazon
The everything store Amazon had another good year in 2018 with the stock up 28.4% as profit and revenue continued to grow at a healthy pace. However, sentiment changed in Q4 with the stock experiencing it biggest drop since 2016 falling 26.2% as investors began to discount lower growth. Regulation and scrutiny of Amazon’s business practices have been a constant theme in 2018 and will likely continue into 2019. Investors have also lately begun worrying about its international business which is not growing as fast as its US business and has lower profitability. Amazon is an iconic brand and widely recognized by retail investors so expect Amazon to be one of the most traded stocks again in 2019.
Alibaba
2018 was neither the best year for China nor its companies. Alibaba, the country’s largest e-commerce business, saw its shares down 20.8% last year as evidence continued to show that the Chinese economy was slowing driven by many factors including the tariffs on goods exported to the US. Alibaba has long been viewed as a way for investors to get exposure to China’s fast growing consumer economy. The Chinese growth story is here to stay so expect a lot of interest in Chinese equities again in 2019.
Tesla
There is probably no other company like Tesla that creates drama and headlines like it was an assembly line. The stock was up 6.9% but the journey was probably one of the most volatile with the share price reaching anything from 244.59 to 387.46 as investors were constantly trying to digest information about growth and rumours about Tesla’s financial health. With its famous founder Elon Musk at the helm creating constant headlines we expect the drama good and bad at Tesla to continue in 2019 as the company begins its delivery of Model 3 cars to the European market and aims to begin producing Model 3 cars in China later this year.
Apple
The former favourite stock and company that could do no wrong had a pivotal year in 2018. Apple shares were down 6.8% as news began to surface that demand for its new lineup of iPhones was not as strong as expected. It all culminated in the surprise negative cut to revenue guidance in early January where the CEO Tim Cook acknowledged that demand was lower than estimated and especially in China its key market for future growth. With China on the general agenda among investors in 2019, Apple with its exposure to China will certainly be closely watched by investors.
