We started this week with the lecture of Paul Toldalgi from BTAPartners LLC. He explained us the basics of the fintech industry. It is simply the intersecting area of the financial and the tech industry. He noted many times along his presentation, that trading itself has changed very much in the recent years. It is hard to sell or to buy stocks in a block. One can generate too much attention with it, creating an immediate surge or drop in the prices. Therefore one must be very careful, use sophisticated algorithms to sell or to buy at the right times.
I never quite understood the difference between hedge funds and mutual funds. Seems like the regulations for a hedge fund require a much more conservative investment policy, not allowing it to make short transactions or to leverage the transactions it is conducting.
US investors prefer their assets being in a domestic location, that’s why they are usually deposited in some US based depository. One of the reasons for this is over-fragmentation of certain financial markets. The level of fragmentation in the EU is very high. Investors usually don’t value that. This seems to have an upside as well. For example if one can have a good product from the CEE, bundled with a US based product with the expected security, her margins can be very high.
It was very fascinating to hear, that different regions usually have different approach towards shares. In the US it is pretty common for every household to invest in company shares, but in Europe this really depends on the country, on the region. In the North, people tend to be more interested in owning shares, in contrast in the south people don’t invest in shares, they rather put their savings in real estate to mention one of many alternatives.
For companies there are many new prospects on the financial market(s). Companies from the CEE are not anymore limited to their region. They could decide to go to the London Stock Exchange and issue their stocks there.
The CEE region can not be considered an emerging market anymore, at least from a financial instruments perspective. It is regulated, established, trustable.