Cryptocurrency, uranium, and cocoa beans surprised investors in 2023
The Financial Times has calculated which non-obvious assets could make good money last year. These included the Solana cryptocurrency, Turkish dollar bonds, uranium, cocoa, and the most successful IPO in an unattractive European market.
The year 2023 also brought big wins to traders who took the risk of plunging into exotic markets.
Growth of Turkish dollar bonds
Turkey’s dollar bonds rose sharply in 2023, as investors welcomed signs of the country’s decision to pursue a more traditional policy course. Turkish debt showed a yield of about 16% in 2023.
The high yields on Turkey’s dollar-denominated debt came during a turbulent year for the country’s assets. President Recep Tayyip Erdogan was re-elected in May and surprised many economists and investors when he moved away from his unorthodox policies that led to the lira’s plunge. He replaced the leadership of the central bank,which took urgent measures to restore the country’s foreign exchange reserves and sharply raised interest rates in an effort to slow down 60% inflation.
Uranium energy hits 15-year high
Russia’s invasion of Ukraine in 2022 has forced governments around the world to reconsider their dependence on oil and gas. And attempts to reduce CO2 emissions in accordance with international agreements have turned attention to nuclear power as a source of clean energy.
The price of uranium hit a 15-year high in December, reaching $90 per pound, according to CME Group futures data, up from $50 at the beginning of the year. Investors in the uranium industry say the growth will continue.
However, dependence on Russia, the largest exporter of enriched uranium needed for nuclear power plants, is causing concern in Washington.
Cryptocurrency Solana has recovered
Solana, a cryptocurrency once touted as the future of digital finance, has made a comeback this year after the FTX crash wiped out more than 90% of its value.
Solana was touted as a digital ledger capable of processing thousands of transactions per second, outperforming many cryptocurrencies, including bitcoin. When the FTX exchange crashed, it had a lot of Solana tokens in its possession. This caused the price, which once reached $250, to fall to just $13 in early 2023.
But Solana gradually began to fix its security issues. This year, its exchange rate rose by 560% to $87.
Romanian Hidroelectrica goes public
Few investors would have backed a Romanian hydropower company to top the list of Europe’s largest initial public offerings in 2023. State-owned Hidroelectrica’s $2 billion IPO in Bucharest in July – the largest in Europe after Porsche’s in September 2022 – beat German pharmaceutical manufacturer Schott Pharma and Italian gambling group Lottomatica, which raised $1 billion and $660 million in their stock market debuts this year.
Shares of Hidroelectrica, one of Europe’s largest renewable energy groups, have since risen by more than 20%, generating large profits for institutional investors including M&G Investment Management, Vanguard, and Fiera Capital. According to Hidroelectrica, the company’s electricity production increased by 38% to 14,101 gigawatt-hours. The company’s net profit and revenue in the third quarter increased by 42% and 32% year-on-year.
Cocoa prices jumped
Cocoa futures rose to a record high as extreme weather conditions destroyed crops in West Africa. This, in turn, led to a decline in supply and a rise in chocolate prices for global consumers.
The cocoa futures contract on the Intercontinental Exchange in London is currently trading at £3,570 per metric ton, up 91% from the beginning of the year. In the food sector, only orange juice was the only product to increase in price in 2023.
Background. As a reminder, the U.S. Congress has taken the first step toward banning uranium imports from Russia. One of the reasons why the United States does not want to mine or enrich uranium on its territory is to protect its nature.
Source: mind.ua