Casino Royale                                                                                    29 January 2021

Leading portals, Bayut and Dubizzle, have reported that, last year, off-plan transactions accounted for 52.9% of total sales, equating to US$ 3.9 billion of the total of US$ 7.4 billion. It is estimated that there were declines of between 7% – 13% in affordable apartment communities, such as JLT, Dubai Silicon Oasis, Business Bay and International City, whilst there were lesser percentage falls of between 2% – 10% in Dubai’s popular communities; these were in line with 2018 and 2019 returns. Over the year, rents fell by between 9% – 17%. In the world of luxury apartments, Dubai Marina remained the most popular in 2020, recording 526 transactions in H2. Other popular locations were Palm Jumeirah, JBR, Downtown Dubai and DIFC where there were price declines of between 3% and 10%.

When it comes to apartment yields, there is no better return than the 8.5% garnered from International City rentals, with Dubai Marina apartments giving about 6.2%. In contrast, villa yields were highest in JVC (5.9%) and Arabian Ranches (5.5%). In the rental market, apartments in JVC were the most in demand, among budget-conscious tenants last year, as rents declined between 10% and 17%. 

According to a Luxhabitat Sotheby’s study, of the ten most expensive properties sold in 2020 for a total of US$ 169 million, five were located in MBR City. The three costliest villas were in Dubai Hills (over US$ 20 million), Sector C Emirates Hills (almost US$ 19 million) and Cluster C in District 1 (US$ 16 million). The fourth most expensive was a US$ 16 million apartment in Il Primo followed by three villas in District 1 of MBR – all in the region of US$ 15 million. A property in Bvlgari Resorts & Residences sold for US$ 16 million, with the 9th and 10h costliest properties being in Emirates Hills and Umm Suqeim, both costing US$ 13 million.

It is estimated that the total value of prime residential market sold in Dubai last year was US$ 8.0 billion, encompassing 10.6k apartments and 1.5k villas. Q4 saw sales at US$ 2.5 billion. The average price of a prime market villa was 3% higher last year at US$ 1.7 million, and interestingly the average size was 1k sq ft bigger with a built-up level of 6.0k sq ft. The top three areas, in terms of sales volume, were MBR City (US$ 1.74 billion), Downtown Dubai (US$ 1.39 billion) and Palm Jumeirah US$ 954 million). When it comes to apartments, prime prices remained stable at US$ 383 per sq ft, with an average price of US$ 490k and an average 1.7k sq ft built up area.

Binghatti Developer’s CEO reckons that the upcoming Dubai Expo 2020, starting in October, will give a glimmer of hope to the real estate sector, as companies arrive, many of whom will be interested in opening offices or branches in the emirate. Muhammad Binghatti commented that because of major government incentives – and their positive policies to mitigate the impact of the pandemic – along with digital transformation and technological progress will help the real estate sector move higher this year. Another factor dragging the sector out of the doldrums is that of an increase in local liquidity and the effect of pent-up demand, as those lucky enough to keep their jobs have not spent money on travel in 2020 and have been forced to curb discretionary spending because of the various degrees of lockdowns in 2020. Furthermore, with the UAE being second in the world, with their vaccine uptake, has added to a feeling of optimism and increased customer confidence.

Brand Finance’s latest report places Abu Dhabi National Oil Company, Etisalat and Emirates as the country’s three most valuable brands among the world’s top 500 brands. The study placed Adnoc at 163^rd, slipping three places, with Etisalat improving seventeen positions to 208^th. Meanwhile, Emirates dropped from 300^th to 421^st. The study covers factors such as marketing investment, customer perceptions, staff satisfaction, corporate reputation and revenue forecasts, and based on these factors, Etisalat landed among the top twenty-five  brands globally on Brand Strength Index – and the region’s only company with an AAA brand strength rating. On a regional basis, Saudi Aramco maintained its leading position, although losing US$ 37.5 billion in value over the year. Globally, Apple jumped into the leading position, followed by Amazon, Google, Microsoft, Samsung, Walmart, Facebook, ICBC, Verison and WeChat.

Following an agreement with the Port of Luanda, DP World will invest US$ 190 million, over the next twenty years, to ensure that the facility is in line with global standards and to increase the terminal’s annual throughput to approximately 700k TEUs (twenty-foot containers). The Multipurpose Terminal at the port handles both containers and general cargo, and has a pier of 610 mt, a depth of 12.5 mt and a yard of 23 hectares.  The deal to operate the MPT, at Angola’s largest port,  will also see the introduction of a modern port management system, as well as further training and development of Angolan staff.

According to the latest Dubai Chamber report, the UAE non-oil maritime transport and trade sector, supported by several positive global economic trends, (the min driver being an expected uptick in maritime transport activity), could expand by an eighth this year. UAE non-oil trade has performed well in recent times, as witnessed by growth rates of 8.5% and 1.0% in 2018 and 2019, with maritime trade accounting for 83% of total goods traded; if anything, it has become more resilient in 2020, during the ongoing pandemic. Dependent on whether the Covid impact lessens or not, and the vaccine effect, the IMF has indicated a 4.2% global growth in this sector but the added benefits of UAE government policies, easing of lockdowns in key markets, the opening of global markets and China’s resumption of commercial activity could see the local sector perform three times better than that estimate. There is no doubt that the government is aiming for a V-shaped recovery with the economy quickly bouncing back.

From tomorrow, Friday 29 January, Emirates and Etihad have suspended flights between UAE and UK, following the Johnson government’s travel ban. Dubai has been placed on the UK’s red list meaning that direct flights will end and tough self-isolation rules will apply to arrivals. The UAE has been added to the 30 existing countries which are currently subject to a travel ban. UK, Irish and third country nationals – with residence rights in the UK – will be allowed to return from the UAE but they will need to travel via a third country.

Driven by a 78% year on year growth in Q4, Dubai’s private jet hub at Dubai South posted a 21% hike in the number of jet movements. Several reasons have been given for the improvement at the Mohammed bin Rashid Aerospace Hub, made more impressive because of the global turndown in air travel post Covid. They include the government’s positive measures in combating the spread of the pandemic, the emirate being the preferred choice for overseas travellers, and the fact that it is considered one of the safest countries in the world. MBRAH is also home to maintenance centres and training and education campuses.

Since its launch in 2005, Dubai Science Park has become a high-class global health, energy and environment business community and is now home to over 400 companies, employing 4k professionals with a wide range of expertise and experience. In 2020, many new firms joined the Park including New York Stock Exchange-listed biotechnology multinational Biogen, which makes neurological disease treatments, Dubai-based DGrade, the first bottle-to-yarn manufacturing company to make clothes out of plastic waste, and Indian’s largest biopharmaceutical company, Biocon a developer of medicine to treat diabetes, cancer and autoimmune diseases. Other existing companies enhanced their presence such as Germany’s life sciences leader Bayer, which opened a new regional headquarters, along with US-based IFF that opened a 1.4k sq mt creation, application and innovation centre for its Taste, Food & Beverage division, to drive further growth in Africa, Middle East, Turkey, and India (AMETI).

Following the merger of the Insurance Authority into the Central Bank – pursuant to Decretal Federal Law No. (25) of 2020 – the CBUAE is obliged to monitor the financial solvency of insurance companies, ensure ethical conduct of firms, and protect the rights of the insured. Accordingly, it has started with operational procedures, aimed at assuming the supervisory and regulatory responsibility of the insurance sector. The bank’s chairman, Sheikh Mansour bin Zayed Al Nahyan, noted that the decision to merge the Insurance Authority into the UAE Central Bank is part of a bigger initiative to transform the CBUAE into one of the top ten global central banks. Abdulhamid M. Saeed Al Alahmadi, the bank’s Governor, stated that “giving the Central Bank a broader mandate will ensure that high standards of supervision and regulation apply to all the sectors which we regulate including banking, insurance, money exchangers and payment services providers”.

Following a request by the UAE’s Public Funds Prosecution, an indictment has been served against Khaldoun Saeed Al Tabari, the founder and former CEO of Drake & Scull International. The Public Prosecutor in Jordan has filed against Al Tabari, his daughter Zeina and Saleh Mustafa Muradweij on “charges that include the felony of committing fraud in buying, selling or managing movable and immovable state or public authority funds”. In 2019, the then management of DSI revealed that the company had losses of almost US$ 1.4 billion, with the PFP accusing the former CEO of “several transgressions”.

Disgraced former Abraaj Group chief Arif Naqvi has lost his appeal in a UK court and should be extradited to the United States to face a trail for fraud and money laundering. The sixty-year-old was accused of misappropriating funds, after the Dubai-based private equity giant collapsed, owing creditors more than US$ 1 billion. In the US, he could face a jail term of thirty years; he has denied any wrongdoing and claimed that his worsening mental and physical health meant he should not be kept in a US jail before a trial. Despite this, the court found that US prison healthcare was sufficiently good and that it was more likely that he would be granted bail.

Driven by loan growth, including contributions from Denizbank, Emirates NBD posted a 4.0% hike in annual total income to reach US$ 6.3 billion but despite net profit slumping 52% to US$ 1.9 billion, on the back of higher provisions for bad loans, the bank is recommending a cash dividend of AED 0.063 per share; the previous year’s accounts included a non-recurring gain from the sale of Network International shares in 2019 – and if this was excluded, 2020’s profit would have only been 31% lower. Dubai’s biggest bank by assets saw its impairment allowances mushroom 65% to US$ 2.9 billion because of the market’s softness caused by the impact of Covid-19. Over the year, the net interest margin slipped 0.24% to 2.65%, whilst the cost to income ratio rose 1.7% to 33%. The bank’s total assets grew 2% to US$ 190 billion.

The bourse opened on Sunday 24 January and having gained 377 points (16.0%) the previous three weeks, shed 38 points (1.4%) to close on 2,697 by Thursday 28 January. Emaar Properties, US$ 0.14 higher the previous three weeks traded down, by US$ 0.08, to close at US$ 1.02, whilst Arabtec is now in the throes of liquidation, with its last trading, late in September, at US$ 0.14. Thursday 28 January saw the market trading at 176 million shares, worth US$ 78 million, (compared to 372 million shares, at a value of US$ 118 million, on 21 January).

By Thursday, 28 January, Brent, US$ 15.89 (39.1%) higher the previous ten weeks, shed US$ 0.33 (0.6%) in this week’s trading to close on US$ 55.10. Gold, US$ 11 (0.6%) lower the previous week, lost US$ 26 (1.4%), by Thursday 28 January, to close on US$ 1,838.

Boeing posted a Q4 loss of US$ 8.4 billion, as a result of the continuing Covid-19 pandemic and the ongoing grounding of its 737 Max jet; this compared to a US$ 1.0 billion deficit in the same period in 2019. Q4 revenue was 15% lower at US$ 15.3 billion. For the year 2020, revenue fell by almost 25% to US$ 58.1 billion, as the net loss was well down at US$ 11.9 billion, compared to US$ a US$ 636 million deficit in 2019. During 2020, the plane maker added a charge of $468m of abnormal production costs related to the 737 Max’s grounding and a US$ 744 million charge for settling with US authorities to avoid any future prosecution over the 737 Max debacle. The pandemic has wreaked havoc on air travel, pushing some airlines to bankruptcy or forcing them to seek government aid and delay taking delivery of jets. Its 737 Max has returned to the skies, whilst the delivery of its first 777X widebody is still three years away.

A report from the United Nations Conference on Trade and Development has confirmed that China is the world’s top destination for new foreign direct investment, at US$ 163 billion, overtaking the US’s US$ 134 billion, which had seen incoming new investments down by almost a half; last year, direct investment into China headed in the other direction by 4% last year. Since 2015, the US has seen FDI slump 71.6% from a high US$ 472 billion, with China up 21.6% from US$ 134 billion. On the global stage, 2020 was a bad year for investment, falling 42%, driven by the negative repercussions of Covid-19, with the UK FDI figure falling by more than 100% from US$ 45 billion to minus US$ 1.3 billion.

This week, Frank Lampard was dismissed as manager of Chelsea Football Club, becoming the tenth manage to depart, since billionaire Roman Abramovich bought the club in 2003. High profile dismissals included Maurizio Sarri, (who was replaced by Lampard), Jose Mourinho and Carlo Ancelotti. It is estimated that it has cost the Russian owner US$ 150 million in manager payoffs, prior to the latest dismissal, and, of that total, US$ 100 million was picked up by the three mangers listed above. The latest dismissal follows a poor run of form that has seen the London club, which spent nearly £300 million ($409m) on new players ahead of this season, disappear from the Premier League title race.

As expected, the Debenhams’ brand and website has been bought by fashion retailer, Boohoo for US$ 75 million; however, the main part of the struggling retailer, 118 stores employing over 12k, remains unsold and the 242-year old chain is set to close, as administrators have failed to find a suitable buyer. When Debenhams listed on the stock exchange in 2011, investors valued it at US$ 2.2 billion. This was not the first company that Boohoo has bought from administrators, having acquired Oasis, Coast and Karen Millen, but not the associated stores. Boohoo’s owner is on record saying that “our ambition is to create the UK’s largest marketplace” and that Debenhams was expected to relaunch on Boohoo’s web platform later this year.

Asos is in “exclusive” discussions with Philip Green’s Arcadia Group that own Topshop, Topman, Miss Selfridge and HIIT to buy them all out of administration. However, any interest is centred only on the brands which indicates that the shops will close with 13k employees affected. Boohoo and Asos appear to be the future for UK retail, who see no value in bricks and mortar and focussing on development of the brands and the associated customer data.

A former National Australia Bank twenty-year employee managed to defraud her employer in a multi-million-dollar scam operation over a period of five years to 2017. A court heard Rosemary Rogers accepted millions in kickbacks, in the form of international holidays, home renovations and a car. The court heard she was motivated by “greed, personal gain and self-gratification” and sentenced her to eight years in jail, as well as taking steps to regain some of her ill-gotten gains. For nine of the years in employment, she was chief of staff to CEOs Andrew Thorburn and Cameron Clyne. She made her money by conspiring with Helen Rosamond, from event management company Human Group, to inflate invoices for the event and function services to NAB over four years. Over that time, she received more than US$ 4 million from the event company “as an inducement or reward to ensure that Human Group maintained a contract with NAB”. How she got away with it for so long beggars belief – in one example, US$ 450k was spent to fly Rogers and members of her extended family to the US, where they chartered a private jet and a yacht, and another US$ 110k was spent flying the family to Europe. No wonder Judge Paul Conlon concluded that “I find it absolutely staggering that this fraud was not detected by some appropriate system of internal auditing by NAB.”

On the back of Q4 earnings skyrocketing 62% in the year, Blackstone Group’s quarterly profits came in higher at US$ 749 million, with revenue up 71%  at US$ 1.04 billion. However, the world’s biggest alternative asset manager posted annual profits almost halving to US$ 1.04 billion, with revenue dipping 17.0% to US$ 6.1 billion. For the fourth consecutive year, Blackstone managed almost US$ 100 billion of capital inflows, with assets under management jumping 8.0% to US$ 610 billion, as fee-earning assets rose 15% to US$ 469.4 billion. The four biggest contributors to the total of capital inflows were real estate (US$ 33.4 billion), credit/insurance (US$ 28.1 billion), private equity (US$ 23 billion) and hedge fund solutions ((US$ 10.4 billion).

Just another example that riles the average man in the street when it comes to financial shenanigans. It seems that four top SoftBank executives were granted US$ 600 million in loans last February to allow them to buy their company’s shares, with a one year “lockdown provision”. A year later they could cash in with a mouth-watering US$ 1.2 billion profit. Some investors have requested whether their stepping down as directors in November had any connection with avoiding future disclosures of the loans.

Having acknowledged their role in Malaysia’s 1MDB scandal, in which they helped raise US$ 6.5 billion, by selling bonds to investors, the proceeds of which were largely stolen, Goldman Sachs’ chief executive David Solomon has been handed a US$ 10 million pay cut; no need to shed any tears for the banker, who was not “involved in or aware of the firm’s participation in any illicit activity at the time”, as he still was paid US$ 17.5 million last year! Although the bank admitted that its involvement in the scandal was an “institutional failure”, prosecutors alleged that senior Goldman executives ignored warning signs of fraud in their dealings with 1MDB and Jho Low, an adviser to the fund; two Goldman bankers have been criminally charged in the scandal. Having collected commission of US$ 600 million for arranging the bond sales in 2012 and 2013, the bank agreed, last October, to pay almost US$ 3 billion to end an investigation into work it performed for 1MDB. Overall Goldman has paid out almost US$ 5 billion in compensation and penalties across five countries, Hong Kong, Malaysia, Singapore, UK and US.

Mastercard announced that later in the year, it would quintuple fees – from 0.3% to 1.5% – it charges merchants on every transaction when UK cardholders buy goods and services from the EU. This would impact the travel sector, (including transactions involving airlines, hotels, car rentals and holiday firms based in the EU), with Mastercard attributing the rise to the UK’s decision to leave the EU. In true bank logic, the global payments company noted that “in practice”, UK consumers would not notice the move. In 2015, the EU introduced a cap on such fees in 2015, after concerns they pushed prices up for consumers and unfairly burdened companies with hidden costs. Since 01 January,  the UK is no longer in the EU so the cap no longer applies. Once again for the banks, opportunity knocks!

Meanwhile, Visa is said to be keeping the issue of price increases under review. It seems that some EU companies have already stopped exports to the UK because of new VAT-related charges, whilst UK customers, receiving goods from the EU, have seen extra charges of up to 40% to cover VAT, duties and other charges.

This week, some Barclaycard customers saw their minimum repayments rise, with the new requirements individually tailored to each customer, although some may see a significant rise in demands. The only good side to the new arrangements is the scrapping of charges for exceeding a credit limit. The new repayment rates will apply to many of the cards – but not Premier or Woolwich – and those who have only started using the facility in the past decade used to have their minimum monthly payment calculated at the lowest of US$ 6.87 (GBP 5), 2.25% of the full balance or 1% of the balance plus interest, now replaced by the highest of US$ 6.67, 2%-5% of the full balance or between 1%-3% of the balance plus interest. Some would smile at the bank advising that “we are increasing minimum payments for some customers to help them pay off debt quicker.’

At least part of the UK car industry is secure for the foreseeable future, following a trade deal reached between the UK and the EU which saw Nissan confirming that it would continue to manufacture cars at its Sunderland plant, the UK’s largest. The car manufacturer also added that it would move additional battery production, of  62kWh, from Japan to close to the plant, where it has 6k direct employees and supports nearly 70k jobs in the supply chain; this move will ensure that UK cars will comply with trade rules agreed with the EU requiring that at least 55% of the car’s value to be derived from either the UK or the EU to qualify for zero tariffs when exported to the EU – 70% of  ‘Sunderland cars’ are exported, most of which  to the EU. The Nissan decision is an indicator that there is still life in the UK car industry, despite all the doom and gloom expounded by the Remain camp. It comes after guarded comments from the Vauxhall boss, Carlos Tavares, about the future of their Ellesmere Port plant being dependent on the support the UK government. He indicated that it would make more sense to locate an electric vehicle factory closer to the larger EU market. The obvious conclusion is that to support UK car manufacturing, going forward, the Johnson government needs to pump huge amounts of money into battery investment which is not happening at the moment. In the five years to 2016, government car investment averaged an annual US$ 4.8 billion and has since fallen to just US$ 1.4 billion. Without increased government investment, 800k jobs are at risk. Later in the week, the car company confirmed it was in union talks over a number of staff redundancies – probably around 150 – but no production cuts are involved.

A Deloitte report estimates that Europe’s top twenty football clubs are well on their way to lose over US$ 2.3 billion by the end of the season; up to the end of the extended 2019-2020 season, their losses were at US$ 1.35 billion from both broadcast and matchday revenue. Barcelona, Real Madrid, Bayern Munich, Manchester United and Liverpool were the top five revenue earners, with totals of US$ 861 million, US$ 861 million, US$ 764 million, US$ 699 million and US$ 628 million, down 15.8%, 6.1%, 4.4%, 18.8% and 8.1% respectively. Manchester City, Paris St Germain, Chelsea, Tottenham Hotspur and Juventus make up the remainder of the top 10. The strength of the English game can be seen that, apart from the five clubs in the top ten, there are two other teams – Arsenal and Everton – in the list. However, the full financial impact of Covid-19, which has wreaked havoc, may not be realised for years to come. Clubs have suffered a loss of US$ 1.14 billion in broadcast revenue, with Manchester United posting a 41.9% decline to US$ 193 million. There was also a £228m overall fall for the twenty clubs in matchday revenue, although there was a £93m increase in commercial revenue.

Not before time, James Shipton will step down from his position as head of the Australian Securities and Investments Commission. Last year, an investigation was launched after it was revealed that ASIC, the authority he was going to lead, paid US$ 90k for his personal tax advice when he was relocating from the US to Australia. He stepped aside during the enquiry which concluded that there were no adverse findings against hm. Treasurer Josh Frydenberg commented “in the light of the outcomes of the review, Mr Shipton will return to his role, but Mr Shipton and I have agreed that it is in the best interests of ASIC that he will step down as the chairperson of ASIC in the coming months.” Some will consider this somewhat of a bureaucratic cop-out.

Australia exported a wide range of goods to China in December, and this despite the ongoing trade war between the two countries that has seen China impose an unofficial ban on Australian coal, along with crippling tariffs on wine (of over 200%) and barley. (The country’s barley and coal were sent to India, Japan and other countries). China also added other restrictions on the import of some other goods such as Australian timber, lobsters and beef. Despite these setbacks, Australia posted a 21.0% hike in December exports to China of US$ 1.8 billion, whilst imports dipped 7.0% to US$ 496 million. Driven, as usual, by iron ore, the country’s monthly trade surplus with China (for goods) climbed to a credible US$ 4.0 billion. The importance of this bilateral trade is that exports to China account for 40% of the country’s total, and 29% of imports, with the Australia being its second largest trading partner.

Last year, the US economy shrank by only 3.5% – much better than most other G20 countries – despite the heavy economic toll caused by the pandemic; however, with virus cases on the rise, the economy has slowed with a lower than expected 4.0% climb in Q4. The final 2020 return was the biggest annual decline since 1946. Over the year, the US witnessed soaring unemployment numbers, (with 18.2 million people collecting some form of unemployment benefits), and a marked increase in poverty numbers but the economy would have fared a lot worse if it were not for the massive stimulus packages which have sent trillions of dollars to households and businesses. The US figures compare favourably with contractions noted elsewhere – with the UK down 10%, whilst Canada, Japan and Germany all dropped by more than 5%. Last week, the US Labor Department reported that another 847k people had filed new claims for jobless benefits. However, on Wednesday, Fed Reserve Chairman, Jay Powell spooked the market, by indicating a continuance of pumping massive amounts of monetary stimulus into the economy and adding that the economy will struggle for “some time”.

The IMF’s latest forecast sees 2021 growth at 5.5%, following a 3.5% contraction last year, to be driven by the start of the roll out of vaccines and continued fiscal support by many global countries; growth in 2022 is expected at 4.2%. Noting that 2020 saw the worst downturn since the Great Depression with over 150 economies expected to have per-capita incomes below their 2019 levels by the end of this year. The global organisation sees “at US$ 22 trillion, the projected cumulative output loss over 2020-2025 relative to the pre-pandemic projected levels remains substantial.”

There is some very funny business going on in Wall Street and concerns a US video games bricks and mortar retailer called Gamestop. Over the last week to Tuesday, its share value had skyrocketed over 300% and then by 92% on Tuesday and a further 116% at the start of trading yesterday (Wednesday 27 January). It seems that a group of savvy social media day traders, utilising low-cost trading platforms such ss Robin Hood, were exchanging tips and pushing up prices via Reddit’s chat thread wallstreetbets. Gamestop, which made a US$ 719 million loss in 2019, (and probably a bigger deficit in 2020), is everybody’s favourite at the moment, but these punters are looking at other stock including Blackberry, AMC, and Nokia Oyjis.

To some observers it seems that this is the start of a battle royale between the establishment of Wall Street and mainly young, tech savvy day traders, pumping the stock in what some consider to be a generational and increasingly personal fight, redistributive and all about robbing the rich to give to the millennial ‘poor’. It seems that they are against hedge funds – and their modus operandi – and at the moment they are winning.  

Gamestop is the most shorted stock on Wall Street, with some estimates that up to 30% of stock being in the hands of hedge fund borrowers, who have bet billions of dollars that GameStop’s shares would fall. This market ploy occurs when a hedge fund, or a big market player, borrows shares in a company from other investors, betting that its price is going to fall. The hedge fund sells the shares on the markets at, say US$ 20, only to buy them back when the price retreats to say US$ 12 The borrowed shares are returned to the original owner, and the hedge fund pockets a profit. What is happening sees the young upstart investors continuing to buy more shares, pushing the price northwards at a rapid speed, whilst putting a “short squeeze” on the “traditional” market investors. When that happens, they have to get back into the market to cut their losses which in turn moves the share price higher. It is reported that Melvin Capital Management had to be bailed out with more than US$ 2 billion to cover losses on some shares, including Gamestop. This could be the start of a new regime and protocol in Wall Street and could represent a generational shift in attitudes to money and use of new technology.

One has to wonder what the regulators have been doing to rectify the situation – basically nothing. Action taken by online brokers on Thursday clamped down on the recent surge in speculative activity, with the likes of Charles Schwab and TD Ameritrade restricting some options trading. Online trading app, Robinhood also prevented clients from adding new positive bets on stocks and the NYSE stopped trading more than a dozen times in the morning session, with GameStop’s share value sinking 77% from the day’s opening. It does seem incongruous that the likes of Robinhood can block retail investors from purchasing stock while hedge funds have no problem accessing the market. Some players cannot believe that young, inexperienced day traders have been able to wipe out hedge funds’ negative bets on Gamestop and obviously someone’s cage has been rattled. Unfortunately, these day traders will eventually lose the battle – and their money – as any enquiry will be handled by the establishment which will act as both judge and jury. On Wednesday, a record 24 billion shares were traded and what started as a Battle Royale, between the establishment and day traders, has seen the bourse becoming a Casino Royale.