Four Lessons Worth Remembering | and Hywel on China and Iran/Israel

In the article attached, he shares four important lessons worth remembering.

Hywel George on China, Iran/and Israel

This recorded session with Hywel George, Director of Investments at the Old Mutual Investment Group, was from Wednesday morning. 

The focus was on China, which is performing very well, despite the Trump tariffs, and Hywel takes a deeper dive into what is driving their growth and how he sees their economy going forward.     

In passing, he also shares his latest thoughts on the current tensions between Iran and Israel. 

To view the webinar, you can click on this link below;

China’s response to the new Trump World | Money Matters with Hywel George

Iran isn't the Ukraine | Izak Odendaal 

The missiles are still flying, but markets are betting that the Israel-Iran war will not lead to a global inflation surge, as was the case after Russia invaded Ukraine in 2022.

Why? After all, a scenario where the Strait of Hormuz is wholly or partially closed could easily see the price of crude jump to well above $100 per barrel. It spiked to $130 per barrel after Russia’s 2022 full-scale invasion of Ukraine. 

This contributed to a global surge in inflation, ultimately leading to significantly higher interest rates.

At this stage, however, global markets have been relatively flat the past week, and I posed these questions to our chief investment strategist, Izak Odendaal, who answers; 

“There are at least four reasons why the shock should be less dramatic this time, even if things escalate further:

1. The world was already reflating in 2022, following the COVID-19 lockdowns, and the oil price spike exacerbated a global supply chain crunch, rather than causing it. It was an environment where firms internationally passed costs on to consumers while maintaining or even expanding profit margins. Some called it “greedflation,” but it is simply a matter of corporate pricing power. This is less evident today. 

2 Unlike in 2022, OPEC has spare production capacity, and the world was facing an oil surplus before these attacks.

3. Russia and Ukraine are major exporters of food (and fertiliser), causing global food prices to spike alongside oil. And while we paid a lot of attention to the jump in the oil price, it was arguably the surge in natural gas prices in Europe that did the most damage, since the region relied on piped Russian gas that couldn’t be replaced immediately with seaborne LNG. 

4. Unlike Russia (and Israel), Iran probably does not have the capacity for a long fight. It has been struggling for years with low growth and high inflation. Levels of internal discontent are high, and this limits the extent to which it can wage a long war and draw its neighbours into the conflict. It has few friends, and China, one of its closest allies, does not want higher oil prices. 

“Weaponising” energy prices as Russia did in 2022 will make Iran many enemies and win it few friends, and therefore seems like a poor strategic choice, unless it becomes desperate.

None of us should minimise the humanitarian tragedy of war. 

But ultimately, investors outside the region primarily care about the oil price, and for now, they have no reason to panic;

Fairtree Webinar | The Digital Duopoly: Alphabet and Meta   

Fairtree, as a more recent addition to our PWM discretionary-managed solutions, shared their webinar where they discussed the ever-evolving world of digital advertising.  

They explored how Alphabet (Google) and Meta (Facebook, Instagram & WhatsApp) have built vast ad ecosystems that monetise billions of daily interactions. From search and social to AI-driven targeting, they break down the growth drivers, competitive dynamics, and strategic trends that define this industry.

Not only do many of us use these services daily, but these two shares are also included in many investment portfolios.  

Fairtree unpack how digital advertising works, and why companies like Alphabet and Meta continue to dominate the space. 

To view this webinar via YouTube, click on the link below;

Friday Food for Thought