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Wall St In Focus

With the NZX50 sitting mostly in the red to start 2021, Kiwis continue to turn to the US market as they look for innovation, liquidity and alpha, says Stake’s Bryan Wilmot.

7 October 2021

Kiwi traders are making the most of a hot market and I’d expect that trend to continue over the coming quarters.

The Nasdaq 100 and S&P500, up over 6 per cent and 4 per cent respectively to start 2021, have provided scores of avenues for Kiwis looking to make money while they sleep, through a wide range of stocks and ETFs (exchange traded funds).

Here’s a look back at January 2021, and a look ahead at what Kiwis can expect to be trading later this year.

New top spot

In a bit of a turnaround, there’s a new No.1 among Kiwis.

For the past 15 months, Tesla has stood firmly at the top of Stake’s most-traded lists around the world, but the five million inhabitants of Aotearoa changed that.

Bucking the trend of Stake traders globally, Kiwis traded Chinese electric car manufacturer Nio (NIO) more than any other stock in January. Not only that, Nio saw 45 per cent more trade volume than Tesla over the period.

Befriend the Trend

Kiwi traders continued to show how much they love momentum stocks.

Each stock in the top 10 most-traded list has gained at least 10 per cent since the start of the new year.

Such an approach certainly carries risk, because the quicker they rise, the quicker they can fall, but traders have been taking profit throughout the month as shown by relatively low buy-sell ratios.

Bye-bye, Big Tech!

Usually, a fixture of top-traded lists, big tech stocks have seen a contraction in trade interest on the Stake platform in New Zealand.

While Apple remains popular among Kiwis, names like Facebook, Microsoft, Amazon and Alphabet have fallen out of favour.

Since the US election, trade volume in dollars for these four companies has fallen by 42.2 per cent.

Big tech has been under the spotlight for some time now, constantly in front of courts and congress.

A general uncertainty around how President Biden may handle the companies, combined with a volatile six months of underperforming means the Nasdaq may have led to the decrease in interest in such companies.

10 Most Popular Stocks in January

(As of January 30, 2021)

1. Nio (NIO)

2. Tesla (TSLA)

3. GameStop (GME)

4. Apple (AAPL)

5. Churchill Capital Corp IV (CCIV)

6. Palantir (PLTR)

7. Marathon Patent Group (MARA)

8. FuelCell (FCEL)

9. Plug Power (PLUG)

10. Blackberry (BB)

New listings to keep an eye on:

Bumble

Having just filed for an initial public offering (IPO), which is its launch onto the stock market, the dating app Bumble looks to list on the New York Stock Exchange in mid to late February under the ticker code $BMBL.

What’s unique about Bumble is the power lies in women’s hands to make the first move. The proposition has been valued by users as the app has ticked past 100 million users across 150 countries.

In fact, during the lockdown period, their user base increased by 25 per cent. Founder and chief executive Whitney Wolfe Herd will be the youngest woman, at 31, to lead a company through the IPO process.

The female-focused dating app stays true to its model, backed by a 73 per cent female board.

The company has an early valuation estimate of US$6-8 billion.

Tinder, its close competitor, is already tradable through its owner Match Group ($MTCH) on Stake. This company, which also owns Match.com and Hinge, is worth US$36 billion.

Roblox

Roblox is the biggest game you’ve never heard of.

It's played by 75 per cent of American children aged between nine and twelve, says CNN. With over 150 million monthly active users, the game sees more players than both Call of Duty and Minecraft.

Founded in 1999, Roblox has taken some time to gain popularity and reach the public markets.

In November last year, the company’s executives decided to postpone listing it, to “work with our advisers to see how we can make ... improvements” to its market debut.

Earlier in January, the company announced it was in a position to carry out a direct listing in the coming quarter.

Coinbase

They say the best way to make money in a gold rush is to sell shovels, not search for gold. In the case of cryptocurrencies, that means investing in the exchange, not in the currency.

The recent rally in the price of Bitcoin has led to an increase in traders and volumes on crypto exchange Coinbase, and with it interest in the impending IPO.

With that, one of the world’s largest retail exchanges has filed to go public.

It’s filed its S-1 registration form, which means approval now lies in the hands of the US Securities and Exchange Commission.

Coinbase has been careful about how it’s prepared for its IPO. Having declined to adopt the controversial USD token Tether (USDT) as well as delisting Ripple (XRP), executives are doing all they can to remain in the good books of the SEC, which has traditionally been sceptical about the crypto space.

If investing in the US market intrigues you and you want more information on Stake, head to hellostake.com to begin your investing journey.

Informed Investor's content comes from sources that Informed Investor magazine considers accurate, but we do not guarantee its accuracy. Charts in Informed Investor are visually indicative, not exact. The content of Informed Investor is intended as general information only, and you use it at your own risk.

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