The Secondary Market, a look back at 2017 and what’s current and on the horizon in 2018

In the last few years we have seen an up-turn in companies and private investors looking for off-market options to move equities.

The beauty of the secondary market is that when a corporation, fund, trust or bank owns large amounts of stock spread over various investment vehicles, there comes the time to want to cash in on profit but also the necessity due to certain statutes of limitation to have to cash in on profit or loss.  Using the open market runs the risk of adversely affecting the market price if large amounts of stock are traded, especially if the said entities own more of the particular stock spread over different investment vehicles.

This is where Global Business Brokers come in and facilitate.

We also have many private clients that at some stage need liquidity from certain individual positions, and have various reasons for using a Business Broker and not dealing with high street brokerages, we are able to facilitate this by offering positions to our equity buyers and also to new prospective clients.

The secondary market is thriving and as our client base grows so does Global Business Brokers reputation for being reliable source to sell quickly.

We are able to basically buy ‘Publicly traded stock in a private capacity’

Last year was a successful year for our Accredited Buyers.  We were involved in Nintendo through the Pokemon Go craze and also were able to acquire shares in Facebook, offering them to new prospective clients and also Walt Disney co. Offered to our long-term existing buyers, all of these positions at the time at discount to the trading market price.

Outlook for 2018

As many of you know my sentiments for this year are Asian based we will be acquiring Chinese shares trading on the Hang Seng – Hong Kong.

The paradox of Chinese shares

The shares of Chinese companies are, at the same time, called some of the ‘Best’ and some of the ‘Worst’ market investments out there.

Let me explain, these companies have issued shares both inside and outside China, but by far the preferred investment for international investors are H-Shares trading on the Hang Seng.

H-shares are doing especially well because Chinese investors are sending their money out of China. One of the ways to do that is buy equities through the Shanghai-Hong Kong Stock Connect.

Few want A-shares, shares of Chinese companies traded on China’s exchanges. In 2017, the widely followed Shanghai Composite Index fell 14.3%. The Shenzhen Composite was off 13.0%, and the ChiNext down 20.5%. These were among the years worst performing global indexes.

H-shares, sold in Hong Kong and measured by the Hang Seng China Enterprises Index, were up only 1.4% at the end of the trading year, however, these stocks have had, in effect, two separate years. The first, January through February 12, was a disaster, with the index down 22.3% during that period. After that the H-share index surged 30.5% at years end.

The H-share index has had a good run during months of accelerated capital outflow, much of it occurring from July 2017 onward.

This is where our current situation falls into place, we have over the course of this year and beyond into 2^nd quarter 2018 unique opportunities to have access to Hang Seng trading equity, this is due to various statute of limitations coming to their conclusions from Asian banks that hold held equity in a company with dual listings on both exchanges. This equity was paid to the banks in return for loans taken out by the company in the 2000’s. Due to our networking abilities and contacts within the industry we will have access to positions that will not only be attractive to our existing preferred buyers, but we will be entering into a global marketing campaign to attract new buyers into Global Business Brokers and show them a new way of working, with our saying, less paperwork, less hassle and more profit.

Our existing preferred clients will be notified of upcoming positions and as always we look to contact us when looking to sell any position(s). For all prospective clients, go to our contact us page to subscribe to our monthly newsletter.

Dr. Timothy Windsor

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