Monday, May 20, 2024

Bloomberg: A major Emirati company is betting on “recession fears” in US stocks


Agency quotes Bloomberg On Wednesday, a senior Emirati royal family-owned investment firm said it was “short selling” U.S. stocks amid growing fears that a recession could hit markets, in what people described as an insider.

Operation is by location Investopedia Economics Investing in assets with a view to making a profit in the event of a decline in the value of the assets.

The site describes the process as “betting against the market” in order to profit when prices fall, as opposed to the traditional long-term investment process, which is based on buying assets and then selling them at higher prices after they appreciate. increases.

According to the Arab Investment website, the short selling process takes place by an investor borrowing shares at their current high price, then selling them to gain their value, then buying them back and returning them to the lender when their value declines.

An investor makes a profit if expectations of a price decline are met, but faces a loss if stock prices rise, and for this reason the process is also described as “betting against the market”.

According to Bloomberg, the company, known as the Royal Group, is headed by Emirati National Security Adviser Tahnoon bin Saeed Al Nahyan.

The company mainly invests in commodities and cryptocurrencies.

The group, which plans to pour up to $10 billion into U.S. and European stocks and other assets hit by fears of a global recession, helps manage the world’s largest family fortune through a sprawling array of subsidiaries, Bloomberg reported in October.

Insiders told Bloomberg that the company profited from some of its investments in U.S. markets late last year and revised its stock buyback list there.

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They said the group will increase its presence in the US when ratings improve and signal the Federal Reserve is gearing up to cut interest rates.

It was not immediately clear which stocks or sectors Royal Group is betting on. Company officials did not respond to Bloomberg’s requests for comment, according to the agency.

Bloomberg said, “The company hopes to take advantage of volatile market sentiment following the collapse of four US lenders, and expectations of a global slowdown.”

Bloomberg Economics expects the U.S. to slip into recession in July — two months earlier than previously expected.

Nadia Barnett
Nadia Barnett
"Award-winning beer geek. Extreme coffeeaholic. Introvert. Avid travel specialist. Hipster-friendly communicator."

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