CAPEX.com

FADI REYAD

Market Analyst at CAPEX.com– MENA Region

Q How would you describe the services provided by CAPEX.com and what are the markets that you cover?

We are dedicated to providing a trading experience that meets traders’ unique needs. As one of the companies that uphold the values of transparency and trust, we provide the best security standards to protect your money. That’s why we keep clients’ money with trusted banks, using the most advanced technologies and secure communications. Accordingly, we only allow the use of internationally recognized deposit and withdrawal methods.

We designed our trading conditions to meet the needs of all traders, including professional ones, with competitive spreads, fast execution, and price transparency always.

At CAPEX.com traders can trade over 2000 financial instruments, from all continents North America, Europe, Asia, Australia, and Africa.

Our clients can trade 9 different asset classes, including stock shares, bonds, ETFs, commodities, indices, and Forex.

Q What makes CAPEX.com different from its competitors?

Investing in education always pays off. Our clients take advantage of the opportunity to access educational materials, tools, and the right knowledge to enable them to trade the markets with the advantage of providing the necessary information they need.

Our clients get the chance to identify and make the most of every opportunity on our powerful platforms, which are equipped with a comprehensive suite of award-winning tools. With CAPEX.com every trader will enjoy:

• Highly reputable and strong regulator Abu Dhabi

Global Markets (ADGM)

• Super-fast and reliable execution services

• Risk management tools to protect your money

• Advanced charting options for more efficient trading decisions • Powerful research tools in collaboration with reputable platforms such as Trading Central and

TipRanks

• Strong support

• First-hand events

• Local bank accounts

Q How has technology changed the trading landscape?

The last century marked a shift in the way people perceive money and how they relate to financial initiations, paving the way for the new Fintech industry.

The two main points that are worth mentioning here are as follows:

• Rules have changed dramatically which represents a paradigm shift

Where the minimum amount required to start investing is at an absolute low. Traders can start with as little as $100. Also, the evolution of technology eliminates the need for a bank or a broker as the services can easily be replaced by online platforms or mobile apps.

• The power of technology – accessibility

Financial research information is now widely distributed over the internet, as opposed to brokerage firms. The investment technology and products become commonly accessible to everybody, not just to experts or the wealthy.

Q How do you see the future of trading?

“Opportunities like never before” would be the headline for the future of trading in favour of all different types of traders. Today’s trading volumes are larger than ever, mainly because more people are joining the markets and becoming traders.

Moreover, most recently Fintech technology has helped to deliver a highly effective and efficient trading experience to all different types of traders from beginners to sophisticated ones. A direct conse-

quence is that the number of millionaires increased substantially between 2020 and 2021.

Artificial intelligence (AI), emerging technologies, and Blockchain technology are expected to be dedicated to building innovative solutions for traders around the world, also to make a move to automation, and to provide clients with the best execution.

Q What are the challenges investors encounter under current market conditions?

The current market conditions can be challenging for all different types of traders in the following areas:

• Lack of knowledge

• Inability to understand market movements during unusual economic situations, such as the one we are currently witnessing

• Highly volatile market, which requires knowledge and experience to survive

Q In light of the changing monetary policies worldwide, what are the trends in the forex market?

Most central banks made the shift in their monetary policy from quantitative easing to tightening policies. It started with interest rates hikes as we saw with the Bank of England which raised the interest rates in June for the fifth time in a row by 25 basis points to 1.25%. But what also encouraged central banks to make this move is the current inflation levels, which is almost at an all-time high, and near the highest levels in decades.

Recession fears have also been added to the menu of challenges alongside the central banks’ plan to raise interest rates. Recession fears are growing, and are being supported by the forecasts recently published by Citigroup Bank which stated that “increasing interest rates could increase the probabilities of a global recession by 50%”.

On the one hand, the tightening policy taken on by the U.S Federal Reserve is putting pressure on stocks. Particularly some speculative stocks which have shined since the Corona pandemic started.

On the other hand, buying the dip resumes to be the strategy which many investors are following even with the current drop in US indices. It is also notable, that market sentiments are witnessing a slight shift to the positive side, after the markets already priced in most of the negative news that happened since the beginning of 2022.

Q Will the current tensions in Europe change the energy markets and how?

Oil prices are hovering around the $110 mark, which is a repetition of the 2014 scenario due to increased demand and reduced concerns about the strength of supply.

Last month, the price of Brent crude, breached the $120 barrier once again ever since the Russian Invasion of Ukraine started. In this context, analysts, and experts of the American investment bank Goldman Sachs, raised their expectations for oil prices to average $135-a-barrel during the upcoming 12 months. This confuses policies aimed at combating high inflation rates that have reached their highest levels in major economies, especially in the United States and Germany.

To understand this more, let me explain the main reasons behind the expectations of oil prices climbing in the upcoming 12 months:

• High demand for oil

Although travel and airports have not yet reached pre-coronavirus levels, they have largely managed to withstand the outbreak of the Covid-19 virus so far, which has increased the demand for jet fuel in Europe.

• Obstacles to oversupply

The “OPEC Plus” alliance, consisting of members of the Organization of the Petroleum Exporting Countries (OPEC) and its allies, is working to increase the targeted monthly production by 648,000 barrels per day during the months of July and August. This might not be enough especially with Russian oil still being under global sanctions. Russia is the second-largest producer in the “OPEC Plus” alliance.

This would make the heavyweight OPEC countries, especially Saudi Arabia, the UAE and Iraq, the only ones able to increase production within a short period. These countries however could soon face the problem of reaching their maximum capacity of supply.

• Russia and Ukraine war

Geopolitical tensions were the main cause for fluctuations in the oil and energy markets this year (2022) after Moscow’s invasion of Ukraine as well as affecting the strong jump in crude prices. Experts predict oil prices could exceed the $140-per-barrel barrier a scenario which shows they believe the RussianUkraine situation will not be solved anytime soon, especially with the United States and Europe siding with Ukraine.

Oil prices are being forecasted to rise in the upcoming 12 months, and the strength of the dollar is said to increase the cost of a barrel of oil to importing countries. Most countries worldwide are starting to take the shift toward renewable energy into consideration. Where a global fuel price hike is eroding demand, and the global economy is witnessing pressure as a knock-on effect from high prices.

Although the share of renewable energy in the global mix was very limited in the precrisis era, the OPEC Long-Term Oil Outlook for September 2021 indicates that these clean sources will be the fastest growing in the period from 2020 to 2045.

However, OPEC expects the share of oil in the global energy mix to decline to 28.1% by 2045, compared to 30% in 2020.

Q In your opinion, which financial markets have growth potential in the current market conditions?

Since March 2020 financial markets in general are witnessing unusual volatility. Many of the current market movements are not making sense for most traders due to mixed market conditions. However, areas of potential can still be seen in the current market conditions, in different asset classes such as:

• Oil sector

After over 42% gains since the beginning of 2022, Bank of America Strategists say valuations are still attractive after the 2022 rally. Where energy stocks are one of the best options to consider, even after a 40% gain this year, while all other S&P 500 sectors are showing losses.

• EV stocks

The top sectors to have a positive outlook are electric vehicle stocks. Where UBS Bank last month raised its forecast for Tesla stock to $1,100, which represents an increase of 50% from its current levels and is seen as a recommendation from them to buy the stock. Also, the Swiss Bank sees Tesla’s operating outlook as stronger than before. They also forecast a vertical integration of semiconductor and battery businesses will achieve super profitability in the coming years.