Samsung, SpaceX & Signify – Investment Insights

Samsung’s surge, a record-breaking SpaceX IPO and Signify’s steady rise all highlight a standout month for markets. Understand how Korea and emerging markets are shifting global investment trends with Head of Asset Management, James Timpson.

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Transcript

SPEAKER_01 0:06

Courtier's head of asset management James Timpson's here to talk us through what's been happening in markets and throughout the world in May. James, hello.

SPEAKER_00 0:15

Hi Leah. And it's more good news, I'm pleased to say. Global markets have had another positive month in May. And this is amidst optimism that hopefully this conflict in the Middle East is going to be resolved sometime soon.

SPEAKER_01 0:28

You say hopefully it's been backwards, forwards, backwards, forwards. Have markets been up, down, up, down in response to that?

SPEAKER_00 0:34

Yes, but in particular the oil price. So towards the end of last month, the oil price fell back below $100 per barrel, and equity markets reacted positively to that. So equity markets have done well. The MSEI World Index, which is the big index tracking the global developed equity market, that was up almost 5% last month, led by particular strength in the US. There's been a bit of resurgence in those big AI stocks. But global markets in general have done well. In particular though, emerging markets. The MSEI emerging markets index was up almost 10% last month. And this was led by Korea. So the COSPY index, which tracks Korean stocks, that's up, that was up almost 30% last month, following a 30% increase the previous month as well. So Korean stocks have been doing really well.

SPEAKER_01 1:28

And how engaged is Court's within the funds in these emerging markets and particularly Korean stocks?

SPEAKER_00 1:34

Yeah, so as you know, we like to invest in emerging markets, and Korea actually makes up almost half of our EM portfolio. One of the biggest Korean stocks we hold is Samsung. You know, obviously a big name in electronics, and because technology and AI has done so well lately, Samsung being part of that chain is up 164% year to date. But just something else on Korea, actually. Because Korea has done so well lately, it's actually become bigger than the UK market. Korea is now bigger than UK. And so the lines are really starting to blur on what's the difference between a developed market and an emerging market. Development in itself.

SPEAKER_01 2:20

Exactly, yeah. So massive returns for Samsung, does that mean it's still value?

SPEAKER_00 2:26

That's a good point, actually. You know, if Samsung's price does continue to appreciate and appreciate, then at some point it will no longer flag as value on our quant model. Um that doesn't necessarily mean it's an instant sell. You know, the analyst could take a look at Samsung and say, well, actually, there's still a lot of value in there.

SPEAKER_01 2:42

And the reason you don't buy growth is because they're so inflated to buy, but you've gone in cheap to buy Samsung. So way back to keep it.

SPEAKER_00 2:49

Yeah, when we first bought Samsung, it was you know really cheap. And even though it's done really well lately, that's not to say it's suddenly become a really expensive growth stock. Its underlying fundamentals may have also increased with its price, in which case it could still be a value stock.

SPEAKER_01 3:03

Just bringing it back to home for a moment, news has been a lot to do with UK politics. FTSE falls. Is this all the FTSE movement to do with the UK politics alone, or are there other determining factors?

SPEAKER_00 3:16

Um politics may have something to do with it, but it's worth bearing in mind that the FTSE 100 does have a couple of really big oil companies in it. Um the oil price fell um just over 15% last month. So those oil companies would have reacted negatively to that.

SPEAKER_01 3:30

Just on the oil, did the you know the whole BP fiasco, has that had any impact on courts' funds?

SPEAKER_00 3:36

Um no, we do not invest directly in BP, although we do have exposure to the FTSE 100, so at most we'd have had a small amount of indirect exposure to the FIPA.

SPEAKER_01 3:44

So you've not lost any sleep at night.

SPEAKER_00 3:46

No, no, no, not at all. Um and even though the FTSE 100 underperformed last month, it was still a good month for medium and smaller companies. They both did quite well. And also UK Gilts performed well as well, partly because of inflation coming in lower than expected, but also weaker jobs data, um which tends to push rates downwards rather than upwards.

SPEAKER_01 4:07

Thanks, James. Now I want to fly away from the UK. Hi, hi, hi, dwarf all the other companies in the world with SpaceX's biggest ever IPO.

SPEAKER_00 4:18

Yeah, um, it's gonna be huge. So SpaceX later this month is going to be launching its initial public offering, um, and that is where it makes some of its shares public. So up until now, SpaceX has been a private company, but after this IPO, it will have shares publicly available to trade on the stock market. And it's going to be the biggest IPO in world history, um, dwarfing the previous uh biggest, which was Saudi Aramco, I believe. Um, and even though it's the biggest ever, it's still only a small fraction of SpaceX's shares that are being floated publicly. So about $75 billion worth are going to be publicly traded. But um that's still only a small fraction of the 1.77 trillion valuation that's being placed on SpaceX. So after the IPO, it will be part of the Nasdaq index, and um the Nasdaq have actually had to change some of their rules to accommodate um uh its listing, but it won't yet be part of the S P 500 index because that has much stricter rules for inclusion. So you have to have at least 50% of your shares floated, for instance, and 12 months of being publicly traded. So we won't have any exposure to it following the listing, and I dare say that it's not going to come up on our value screens either. That valuation does look rather toppy to me, so I doubt we'll be um investing in it anytime soon.

SPEAKER_01 5:48

Thanks, James. Well, with images of twinkles in the distance, one that you saw not so long back was Signify, the lighting company I asked you about in our last update. How's it been doing?

SPEAKER_00 5:59

Yes, I promised I'd look into it. Um, so Signify is a stock that's in our global equity fund and our ethical equity fund, and it's done really well lately. It's up 15% in the last two months. It's listed um in uh the Netherlands, uh, and as I say, it's uh sells lighting products. And recently it was included in the Dow Jones Best in Class World Index for the ninth consecutive year, which means it's in the top 10% of its industry for sustainable practices. So hopefully that's been illuminating for you.

SPEAKER_01 6:34

I can't beat that, James. So we'll leave it there. Talk next month. Thank you. If you do have any questions, please, as ever, speak to your advisor or contact us through the website.

unknown 6:44

Thank you.