Check out this week’s stories about China’s looming social credit system, EU approving the Brexit deal, and where to next for scandal-prone Facebook. What does it all mean for investors? (3:54 min read)

This information does not take into account your personal objectives, financial situation or needs. You should consider if the relevant investment is appropriate having regard to your own objectives, financial situation and needs.


1. China to rank citizens on behaviour  

China announced their social credit system plans a while ago, whereby residents are given a social rating based on their behaviours collected from various data soures, but have just recently applied a deadline – they plan to roll it out before 2021.

It will be used to reward and punish depending on the social actions of each citizen.

Big data technologies will no doubt play a critical role in collecting and analysing data for this ambitious social behaviour program.

What does it mean if you’re invested in big data companies?

As more aspects of our lives become digitised, the ability for governments and corporations around the world to utilise this data increases exponentially.

Life migrating online should continue to drive the rapid growth of big data companies, which help collect, store and analyse large and complex data sets. However, it has also raised individual privacy concerns.

China’s proposed social credit system highlights an important question of whether big data aids in compromising individual rights more than it benefits society.

What does it mean if you’re invested with AtlasTrend?

Our Big Data Big Fund actively invests in companies benefiting from the growth of big data around the world.

We see the power of big data continuing to grow rapidly over the next decades, and consider it an attractive long-term investment trend.

Nevertheless, we are carefully watching how individuals, corporations and governments are handling the potential encroachment on people’s private lives as the power of big data grows.

Depending on how it’s managed, it could either slow down or boost the industry’s growth.


2. EU settles on Brexit deal

After nearly 2 years of negotiations, the European Union (EU) have finally agreed to the UK’s Brexit deal.

They’ve settled on their billion-dollar ‘divorce bill’, and set some foundations for how the relationship between the two regions will function moving forward.

What does this mean if you’re invested in the stock markets?

Ever since UK residents voted for Brexit in 2016, there has been much uncertainty over what it might actually ensue.

While many stakeholders are not particularly happy with the agreed Brexit deal, the stock markets and UK businesses have breathed a small sigh of relief since an agreement was reached.

The final hurdle is the UK parliament’s vote in December, which appears to be hanging in the balance.

What does this mean if you’re invested with AtlasTrend?

Our managed funds have some investments in companies exposed to the UK and EU. We are closely following and analysing the potential impact of Brexit on these companies.

In particular, if the UK Parliament rejects the deal, it will likely result in a volatile market for UK stocks and currency over the short term.


3. Facebook CEO’a defensive move

In a year filled with criticisms and privacy issues, Mark Zuckerberg appears to have taken a more aggressive stance in defending Facebook.

Zuckerberg indicated he would not be stepping down as Facebook’s chairman in a recent interview with CNN.

What does this mean if you’re invested in Facebook?

Facebook’s stock price is down over 35% since its peak in July this year.

However, to put that into context, the stock price is merely back to where it was trading approximately 18 months ago.

Over any longer term measure, Facebook shareholders have made a decent return since the company listed in 2012.

For current Facebook shareholders, it is more important to look at the long-term prospects of the business and what the company is doing to address the key issues that have dragged the stock price down this year.

Mark Zuckerberg’s interview with CNN is a useful indication the company is not deviating substantially from its goal to connect the world, but in the meantime it recognises there is work to do on countering the problems.

What does this mean if you’re invested with AtlasTrend?

One of our managed funds is invested in Facebook.

We believe the stock price pullback in 2018 brings an excellent investment opportunity due to the following factors:

  • Investment in long-term growth: Facebook is planning to increase its capital expenditure to as much as US$20 billion in 2019 which will help build its user base.
  • Monetisation of platforms: Instagram and WhatsApp haven’t been monetised to their full potential.
  • Valuation is favourable: Facebook is currently trading at a 42% discount to its 5-year average based on a 2019 price-to-earnings multiple.


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About Kent Kwan

Kent Kwan is a Co-Founder of AtlasTrend, an investment platform that makes it easy for anyone to learn and invest in trends impacting our world. Kent has over 17 years experience in financial markets including as Chief Investment Officer at Arowana International Limited, and roles at JP Morgan and Macquarie.