Corporate events

Element ONE


Issuer: ELEMENT ONE LTD 
ISIN Number: VGG299771086
Issue Description: USD CL B SHS
ISO CFI: CICXXX

On the 1st of August 2019, World Gold Council published a Gold Demand Trends report for the first two quarters of the current year. The report indicates highly active purchase activity conducted by Central Banks (foremost Russia, China and Poland). In August prices for gold have recovered to the level of April ’13 and broke through US$ 1,550/oz.

Despite FED official statements on the temporary cut of the interest rate, Central Banks and market participants decided to hedge the risk against rescission and Trade War between the US and China. As a reminder, the US Dollar to Chinese Yen pair exceeded $7 per Yen for the first time in a decade, whcih led to devaluationby 4% of Chinese national currency during last month. China made it crystal clear that even under manipulations with currency exchange rates, it would stand for its national interests.

Besides, British private financial institutions invested in Gold ETFs as much as three-quarters of total US ETF supply with gold as underlying. The main objective is to protect GBP assets in case of no-deal Brexit.

EURUSD pair sank to the level lower than 1.10, due to ECB announcement of cutting its main interest rate, the deposit facility, by ten basis points to -0.50% and the restart of its bond-buying program (20 billion EUR p/month) at the start of November.

S&P500 Index performance in August was following the downtrend, decreased by 1.81%. At the same time, our Element ONE fund boosted NAV indicator by 2%, with the help of short positions in the portfolio. As an example, one of the positions was short on Interactive Brokers (IEX: IBKR) shares, which was closed at $46.5. Deal return rate — 9.64% for 24-day duration or 146.6% of annual rates of return.

In spite of global economic uncertainty, our fund plans to close a number of short positions till the end of September’ 19 and accumulate several oversold securities.

Mining.VG


Issuer: RAM Data Technologies INVT LTD
CUSIP Number: G7369L 106
ISIN Number: VGG7369L1067
Issue Description: EUR CL C SHS
ISO CFI: CICJMS

During August, cryptocurrency market was comparatively stable, continuing the correction movement since June high. Etherium mining difficulty was following the upward trend and vary between 2.15P and 2.34P, while the exchange rate of second largest coin has fallen from $218 to $172 in the end of the month.


Mining.VG fund share price performed in a slightly negative manner, with -0.82% loss including accumulated coupons and payoffs. As for today, our team is actively testing the new mining pool Ezil.me, which allows to earn Zilla coin in addition to Etherium. We assume the change in mining pool will increase return p/RIG indicator. In August, the majority of RIGs worked on Nicehash with periodical change in algorithms, switching from Ethas to Cuckatoo31.
Financial company On Capital (https://oncapital.us), which specializes in IPO investments and corporate bond market, was acquired by British holding Raison Global. The purchase price is not disclosed. During September On Capital will be integrated into the business processes of Raison Asset Management, the investment infrastructure will be provided by this company. In the future, On Capital is going for rebranding - services in the retail market will be provided under the new name Amaday.

«Our company has been working in the field of providing asset management services in Europe and the CIS countries for more than five years. We will do our best to make the process of company unification easy and enjoyable for our new customers and so that they only experience the benefits of this event. Investment protection will become even more reliable as our investment management company works in accordance with the requirements of the most influential market regulators, and On Capital’s successful management strategies and technologies will be preserved.» - says Alexander Zaycev, managing director of Raison Asset Management.

Raison Asset Management is licensed by BVI Financial Services Commission (FSC) and registered by the US Securities and Exchange Commission (SEC) as investment advisor, meets the requirements of the European Securities and Markets Authority (ESMA) and is a member of FINRA.

Element ONE


Issuer: ELEMENT ONE LTD 
ISIN Number: VGG299771086
Issue Description: USD CL B SHS
ISO CFI: CICXXX

In early July, the U.S. Department of Labor published a strong labor market report for June 2019. Non-farm sector employment grew by 224,000 over the month, hourly average wages rose by 3.1% in annual terms.

On July 10, the SPX index for the first time in history exceeded the mark of 3,000 points in anticipation of a rate reduction.

On July 19, gold futures began to consolidate above the $1,450 per ounce, returning to May 2013 values. The tension of the trade conflict is forcing investors to shift into defensive assets.

On July 31, the Federal Reserve System lowered the rate by 0.25% for the first time since 2008, but Fed Chairman Powell emphasized in his statement that this rate reduction is not the beginning of a new cycle of reduction the cost of borrowed capital.

The Element ONE fund in July showed a negative result - the share price fell 3.07% to $1,496.5. In the middle of the month, we opened a short position on Interactive Brokers (IEX:IBKR) for hedging longs. On July 19, we added a long VMware stock position (NYSE:VMW) to the portfolio, breaking through the moving average (50), which, in our opinion, has every chance to end the year with a result above $195 per share. Unfortunately, half of the securities had to be closed with a stop-loss at a price of $165 per share. However, we are looking at the company's unique decisions with positive eyes and plan to average the position in September.

Mining.VG


Issuer: RAM Data Technologies INVT LTD
CUSIP Number: G7369L 106
ISIN Number: VGG7369L1067
Issue Description: EUR CL C SHS
ISO CFI: CICJMS

In July 2019, bitcoin was not so volatile compared to previous periods - its price ranged from $9,000 to $13,000, only once breaking the upper limit of the specified price range. By the end of the month, BTC fell in price by just over 6% of the month’s opening, ending the month in the region of 10,000 US dollars.

The month turned out to be not the richest in bright events - the regulators' claims to Facebook were mainly discussed regarding their crypto project Libra. A number of local and international companies informed about the start of using BTC to accept payment for services and products, as well as their participation in the creation of exchanges, wallets or cryprtocurrencies. For example, Norwegian Air will sell tickets for bitcoin, Daimler AG (which includes the Mercedes-Benz concern) is developing a cryptocurrency wallet for cars, and Roma, Juventus, PSG football clubs plan to launch their own cryptocurrencies.

In July 2019, Mining.VG, like the cryptocurrency market, showed a negative trend compared to June 2019 - minus 1.53%, taking into account accumulated and paid coupons. In July 2019, the mining fund added the Cuckatoo31 algorithm for 1080ti video cards, which allowed to increase revenue for this type of cards by 10-15% relative to bitcoin. However, the negative trend of the ETHBTC pair did not allow to derive the proper benefit from a partial transition to the specified algorithm. The fact is that a large amount of equipment runs on the ethash algorithm and sells this power for Ethereum mining, getting Bitcoin for it. Thus, with a drop in the cost of Ethereum relative to Bitcoin, the profitability of video cards decreases, in July the decrease in the ETHBTC pair amounted to more than 30%. In addition, in July, the Ethereum mining difficulty increased by 5% from 2.1P to 2.2P, which at constant power yielded a reduction in remuneration. All this was reflected in a decrease in mining remuneration in euro equivalent from 12.8 thousand euros in June to 9.7 thousand euros in July 2019.

At the same time, we see the completion of the corrective movement of cryptocurrencies, which began at the end of June. The fund continues to store major reserves in BTC, which is a stabilizing factor in the medium term.

We also made minor technical improvements on the website and now we display the fund’s yield chart taking into account the accumulated and paid coupons for the convenience of fund’s investors.
RAISON ASSET MANAGEMENT temporarily stops sending monthly newsletter to customers' emails due to the change of service provider as well as the switching to a new scalable service for greater coverage and better fault tolerance compared to the previous provider.

We plan to resume sending monthly newsletter in September 2019. We also invite you to take part in a short poll:

How do you find the newsletter in its current format?


Element ONE


Issuer: ELEMENT ONE LTD
ISIN Number: VGG299771086
Issue Description: USD CL B SHS
ISO CFI: CICXXX

The US market in June showed the best month since February 2019. The S&P500 Index has grown more than 6 percent.

One of the reasons for the rally is a monetary policy easing. The Fed at its meeting on June 19 left the key rate at the current level and hinted at one or even two reductions of the rate in this year.

The day before the Fed meeting, the ECB President Mario Draghi made it clear to markets that the rate cut was one of the tools to stimulate the economy and he could use it.

On June 21 and 27, the Federal Reserve published the results of stress tests of banks and financial institutions, which was conducted in two stages. According to the results of testing, all the largest banks have a sufficient level of capital, allowing them to function in the event of a hypothetical recession. This was another positive sign for stock markets.

Element ONE fund added about 6% in its capitalization for the month mainly due to long positions in stocks.

On June 19, we sold Brookfield Renewable Partners L.P. (NYSE: BEP), receiving a yield of 6.4% in 27 days, profit taking was associated with a possible correction after paying dividends. Protective instruments in the portfolio reduced volatility, but slightly lagged behind the index.

Now we are considering the purchase of a stock of VMware (NYSE: VMW), traded by multipliers below the sector. The company offers unique cloud solutions. In addition, we plan to open a short position in the overvalued, in our opinion, Interactive Brokers company.
 

Mining.VG


Issuer: RAM Data Technologies INVT LTD
CUSIP Number: G7369L 106
ISIN Number: VGG7369L1067
Issue Description: EUR CL C SHS
ISO CFI: CICJMS

In June 2019, bitcoin continued to grow in price - by the end of the month BTC added almost 26% of the price on June 1, closing on June 30 at a mark in the region of 10,700 US dollars. Within the month, the bulls could not overcome the important mark of $14,000 although all the prerequisites for this existed several times came up close to it. Positive news background and important events in June contributed to the continuation of the uptrend. In the middle of the month, Facebook finally announced its Libra cryptocurrency, which gave a powerful signal to the entire market. Even despite the presence of claims from state regulators to Facebook in connection with the specified announcement and correction at the end of the month, the market continues to maintain an optimistic attitude.

We believe that the current correction is short-term in nature, reflecting the rules of the wave theory, and is an omen of the continuation of further growth of the cryptocurrency market.

In the event of the absence of extremely negative events, the price of Bitcoin will most likely test resistance around $14,000 during July-early August and, if it breaks through successfully above the aforementioned mark, it can move to $17500-18000 in the short term. US in the short term.

Mining.VG fund in June 2019 compared with the previous few months showed a slightly worse trend - + 0.02%, taking into account the accrued coupon (-0.68% at book value, in which coupons are reflected in the debt section). This is primarily due to the transition to an advance settlement system for electricity and, as a result, a significant one-time payment in June, which affected the book value of assets. However, the advance payment system will make it possible to slightly reduce the cost of electricity, which in the future should have a positive effect on the fund's profitability.

It is important to note that in the second quarter of 2019, the Fund received income in the form of remuneration for servicing blockchain networks in the amount of about 34 thousand euros, which is 2.7 times more than the revenue for similar activities in the first quarter (about 14 thousand euros). According to the results of the 2nd quarter, the fund's clients received coupons, the size of which was also on average 3 times higher than in the 1st quarter of 2019.