Afternoon All, 

Pressure on China is mounting from all sides. Overnight, the US announced the Chinese consulate in Houston required to shut in the 72 hours, US/Japan to conduct naval exercises in the South China Sea, French all but ban Huawei 5G equipment by 2028. Even John Howard slipped in the slipper to Xi Jinping yesterday, calling him a "bully". 

The push back is real against China, as are the implications for certain sectors and companies.  From a markets perspective, think about the push to break dependence on China (for key materials that could be bargaining tools) - for example, Lynas (LYC.ASX $LYC) helping the US on rare earths, or Novonix (NVX.ASX $NVX) which will be the only producer of synthetic graphite outside of China for the EV battery market (setting up their plant in the US).




In Houston China has a problem - Embassy to shut in 72 hrs

The basis for the closure was espionage, stealing intellectual property. Not unprecedented, as the Russians did the same thing when asked to leave an embassy (I think in New York), but it was straight out the back to start burning documents.

Video Below. BBC Article

US Secretary of State Address to Governors on Chinese Interference & Competition

Worth listening to Pompeo's address to Governors back in February, for a framework to understand how the US feels about opening up to China. It is (or was) a one way street to the US, with very conditional to access back into China.

To quote from the address - "The Chinese Government has been methodical in the way it’s analyzed our system, our very open system, one that we’re deeply proud of. It’s assessed our vulnerabilities, and it’s decided to exploit our freedoms to gain advantage over us at the federal, state, and the local level."

Click Below to listen to address and transcript

French limits on Huawei 5G equipment amount to de facto ban by 2028

Huawei is pretty much being rejected everywhere.

They won't be able to renew the licences in France, so an effective ban.

Click below for Reuters Article

US accuses Chinese of stealing COVID Research

"The U.S. Justice Department indicted two Chinese nationals over their role in what the agency called a decade-long cyber espionage campaign that targeted defense contractors, COVID researchers and hundreds of other victims worldwide" Reuters Link

Novonix - NVX - Only Synthetic Graphite Production being scaled up outside China

($NVX NVX $1.23)

The updates post the recent equity raise have been incredibly interesting. Their latest presentation is well worth a look. Breakthroughs in the cathode/anode technology for battery production. Speculation these new breakthroughs will be part of the Tesla million mile battery (Tesla Battery Day scheduled for 15th September). Building the only synthetic graphite (a major component in EV/Battery production) outside of China/Asia, initial 500t order with Samsung.

On a run today - no doubt Chinese tensions, along with coming US listing are helping. (Slide below from their Presentation in May)


Thomas Schoenmaker
Head of Wealth Management

The "Bull and Bear" and "Desk Notes" are short commentary pieces by the author and not research or necessarily the views of Wentworth Securities or Wentworth's other advisors and Directors. 

If you think someone else would like to receive the emails, just let me know, and I can invite/add them to the distribution list. Alternatively, if you do not wish to receive the emails, just drop me a line and I will remove you. 

Nothing in these notes should be viewed as personal financial advice to you, it is not written for you personally, and in no-way considers your personal situation.  Whilst these notes discuss markets, macro and companies, and look to raise ideas and discussions, you should not act on the content of the note without seeking your own professional financial advice. The content is general in nature. As a general rule, you should always consult with a financial advisor prior to making any decision on buying or selling an investment. I am always happy to discuss the content or take feedback. 

Subscribe to Bull and Bear
Follow us on Twitter
Financial Licence & Disclaimer: Wentworth Securities Pty Ltd ("WWS") (ABN: 96 155 409 653) (Australian Financial Services Licence No: 422477), and Wentworth Global Capital Finance Pty Ltd ("WGCF") (ABN: 11 155 410 843), Corporate Authorised Representative of WWS (AFSL: 422 477).  This publication is intended solely for information purposes of WWS’s Wholesale, Sophisticated and Professional Investors (as defined by the Corporations Act 2001 (Cth) or the equivalent in each respective Jurisdiction. This communication is not an offer, invitation, solicitation, advice or recommendation with respect to the subscription for, purchase or sale of, any security, and neither this document nor anything in it will form the basis of any contract or commitment. Nothing contained in this document constitutes legal, tax or other advice. WWS, their employees, consultants and its associates within the meaning of Chapter 7 of the Corporations Law may receive commissions, underwriting and management fees from transactions involving securities referred to in this document (which its representatives may directly share) and may currently hold interests in the securities referred to in this document. WWS advise that they and persons associated with them may have interest in the above securities and that they may earn brokerage, commissions, fees and other benefits and advantages whether pecuniary or not and whether direct or indirect, in connection with the making of a recommendation or dealing by a client in these securities, and which may reasonably be expected to be capable of having an influence in the making of any recommendation. A reference to this communication includes all attachments.
Copyright © 2020 Wentworth Securities Pty Limited, All rights reserved.

Want to change how you receive these emails?
You can update your preferences or unsubscribe from this list.

Email Marketing Powered by Mailchimp