Welcome to our #58 weekly newsletter.
Every week we curate key content and apply a female lens so you can stay informed and inspired about money and investing.
Stay in the know.
Keep on top of global economic, financial and investing news and trends. And read about what this means for you and your money in 2021 during Covid-19 and beyond.
If you’re short on time, listen to the audio for a brief overview.
“For women taking control of their financial future”
-Jana Hlistova
From The Purse
Editorial from the Founder
Global stocks have lost $3.5tn in market cap this week, almost equal to the GDP of Germany, as US tech stocks came under pressure from rising Treasury yields.
Improving economic prospects and rising inflation expectations sparked a sell-off in government bonds from New York to London and Sydney.
The sell-off jolted equities, pushing the broad S&P 500 down 2.5%. The tech-heavy Nasdaq Composite closed 3.5% lower, its worst day (Thursday) since late October.
The Bank of England (BoE), chief economist Andy Haldane, said he sees a risk of UK inflation accelerating more than expected, warning fellow central bankers against being too relaxed about taming the rise in consumer prices.
Meanwhile, the cryptocurrency market plummeted this week. Bitcoin has dropped from its all-time high over $58,000 last weekend to $45,000+ today (the biggest weekly loss since a 33.5% decline in March 2020). Spiking bond yields has rattled the market.
Institutional investors continue piling in to bitcoin: JP Morgan says investors could make bitcoin 1% of portfolios; MicroStrategy has invested another $1bn+ in bitcoin, Square purchased $170m of bitcoin and said bitcoin represents 5% of its total assets (end of 2020).
CEO and founder of ARK Invest, Cathie Wood said that bitcoin represents a new asset class and may serve as a reserve currency in the future.
In the Future Focus section, read about gender lens equity funds; assets have grown to $2.67bn in 2020. Meanwhile, investors warn top UK firms over ethnic and gender diversity.
Coinbase, the world’s largest cryptocurrency exchange, has filed to go public on the Nasdaq via a direct listing. Their net revenue more than doubled to $1.14bn (from a loss of $322m last year) and the company is valued at circa $100bn.
In the Have You Seen This section, we cover the Hampton-Alexander review and the fact that women only account for 6% of FTSE 100 CEOs and are paid far less than men.
And we are tracking a tech start-up called imagilabs which is co-founded by Dora Palfi and Beatrice Ionascu. This is an all-female founded startup that makes coding more accessible to young girls. They have raised €250k in pre-seed funding.
Don’t forget to listen to The Purse Podcast interview with Diana Biggs, who is the CEO of Valour. We talk about bitcoin, ethereum, DeFi (decentralised finance), women investing in crypto (and more).
Stay safe, look after yourselves and your loved ones.
I hope you enjoy this week’s newsletter.
Until next week,
Jana
The Big Picture
Global markets and economy news, trends and indicators
Global stocks have lost $3.5tn in market cap this week, almost equal to the GDP of Germany (tech came under pressure from rising bond yields)
Stock market P/E valuations have expanded significantly during the pandemic.
US tech-led sell off (and then ease) : investors trying to price risk of faster inflation and rising long-term interest rates (and the impact on equity market valuations)
Improving economic prospects and rising inflation expectations has sparked a sell-off in government bonds from New York to London and Sydney.
‘Growth stocks, which are now largely concentrated in the tech sector, tend to be more sensitive to interest rate movement than, for example, value stocks.’
US bond yields jump to >1.5% for the first time since February 2020 (fears of inflation)
Thursday: a sell-off in government bonds reverberated through the markets, handing tech stocks their worst day since October.
The sell-off jolted equities, pushing the broad S&P 500 down 2.5%. The tech-heavy Nasdaq Composite closed 3.5% lower, its worst day since late October.
Shares in fast-growing tech companies have suffered some of the heaviest fallout, since their elevated valuations have been underpinned by low rates.
Bank of England (BoE): sees risk of central bank complacency in inflation
Chief Economist Andy Haldane said he sees a risk of U.K. inflation accelerating more than expected, warning fellow central bankers against being too relaxed about taming the rise in consumer prices.
UK Chancellor, Rishi Sunak extends UK’s emergency Covid business schemes
Further financial help for UK businesses is pledged with extensions to furlough and emergency loan schemes.
The chancellor also set March 3 as the date for the next Budget: this is likely to be one of the toughest in years given the pressure to stabilise the public finances with additional spending cuts or tax increases.
Bitcoin & cryptocurrencies
Global news, trends and insights
Bitcoin’s price fall this week: part of a broader risk asset stumble
Bitcoin surged to a record of over $58,000 last weekend, but has stumbled since. Today it is trading at just over $45,000.
Spiking Treasury (bond) yields have rattled the market’s more speculative fringes.
The cryptocurrency had lost around 19%+ for the week on Friday morning ie the biggest weekly loss since a 33.5% decline shook bitcoin in March 2020.
JP Morgan says investors could make bitcoin 1% of portfolios
‘In a multi-asset portfolio, investors can likely add up to 1% of their allocation to cryptocurrencies in order to achieve any efficiency gain in the overall risk-adjusted returns of the portfolio’.
Bitcoin has surged fivefold in the past year as prominent investors such as Paul Tudor Jones, Stan Druckenmiller and Elon Musk have piled in.
MicroStrategy invests another $1bn+ in bitcoin
MicroStrategy announced the purchase of another $1.026 billion in bitcoin Wednesday, turning mountains of zero-interest debt into one of the single largest (dollar-denominated) bitcoin investments ever executed by a publicly traded company.
Square purchased $170m of bitcoin
The company said it purchased approximately 3,318 bitcoins, expanding on its October 2020 purchase of 4,709 bitcoin.
Square said it represents about 5% of the company’s total assets as of the end of 2020.
‘The investment is part of Square’s ongoing commitment to bitcoin, and the company plans to assess its aggregate investment in bitcoin relative to its other investments on an ongoing basis...’
Cathie Wood: bonds are done, crypto could be the solution
CEO and founder of ARK Invest, Cathie Wood said that bitcoin represents a new asset class and may serve as a reserve currency in the future.
Institutions diversifying their cash assets to bitcoin has been the biggest surprise for Ark Invest.
She said: ‘Look what’s happening to bonds right now. If we are ending a 40-year secular decline in interest rates, that asset class has done its thing. What’s next? We think crypto could be the solution.’
In its annual research report published last month, ARK Invest said that, if institutional investors allocate around 6.5% of their funds in cryptocurrency, the price of bitcoin could go as high as $500,000.
Future Focus
Keeping an eye on key predictions, innovations and what’s going to impact the future
Gender lens equity funds grow assets to $2.67bn in 2020 as tech exposure helps performance
Assets under management (AUM) in gender lens equity funds grew:
40% in 2020 to $2.67bn boosted by $106m in new funds launched during the year, as well as the performance of the technology sector, according to new research.
The company found that Microsoft was the top holding, found in 11 gender lens equity funds, followed by Visa, a holding in six of the funds and Estée Lauder, held by five of the funds.
Investors warn top UK firms over ethnic and gender diversity
The Investment Association (IA) will issue ‘amber-top’ warnings – the second-highest level of alert – to the biggest 350 listed firms if they do not disclose the ethnic diversity of their boards or have a credible action plan to address the issue.
Crypto industry backs MIT Media Labs Currency Initiative
The MIT Media Lab yesterday announced a $4 million, four-year-long research and development program to protect the Bitcoin network.
The program’s backers include crypto’s biggest advocates: Twitter CEO Jack Dorsey, MicroStrategy CEO Michael Saylor and Cameron and Tyler Winklevoss.
HM Treasury’s UK fintech review calls for new crypto-assets regime
The review said the UK should be ‘as broad in ambition as MiCA’ the EU’s recently-proposed crypto rules
It also called for the creation of a £1bn fintech growth fund to help support local startups
Companies: winners & losers
Companies to watch and share price movements
Coinbase Global Inc. files to go public on the Nasdaq via direct listing
The largest cryptocurrency exchange’s net revenue more than doubled to $1.14bn (from a loss of $322m last year).
Some 96% of Coinbase’s revenue last year came from fees on transactions on its exchange.
Verified users of the exchange rose 34% to 43m last year, while monthly transacting users jumped 180% to 2.8m.
A majority of its net revenue was derived from trades in Bitcoin and Ethereum.
Coinbase is valued at close to $100 billion: that could make it one of the biggest companies to go public since Facebook Inc.
Coinbase’s CEO, Brian Armstrong said that the company’s goal is to solve problems in the current financial system and ‘create more economic freedom.’
Have You Seen This?
Female-focused news, reports, research, campaigns
Hampton-Alexander review: final report shows female directors up by 50%
The number of female directors in FTSE 100 companies has increased by 50% in the last five years, according to the final report of the Hampton-Alexander review.
The government-backed review, launched in 2016, achieved its target of 33% of board positions on FTSE 100 and FTSE 250 companies to be held by women by December 2020.
The number of women on these boards rose from 682 to 1,026 over the five years of reporting, the report’s authors said.
Know this: the data shows that we need at least 33% women ‘at the decision-making table’ to drive cognitive diversity and performance/returns.
Women only account for 6% of FTSE 100 CEOs and are paid far less
In the UK FTSE 100 as it stands there are 6 female CEOs compared to 94 men in 2021, the same number as between 2017 and 2019.
Startlingly if you analyse the United States-based S&P 500 it’s a similar trend – 6% of CEOs are female, amounting to 29 out of 471.
CEO pay:
The average male CEO earns around £5.3m vs £4.42m for women, meaning male CEOs earn 17% more than their female counterparts.
Comparing the highest-earning male and female CEOs is starker, with the highest-earning man taking home £58.73m vs top woman at £5.89m, a 90% difference.
Know this: gender equity is a big problem for organisations. Changing company culture is difficult. And unless the board and CEO are champions of gender equity and invest in closing gender equity gap, the problem continues. Senior executives should be targeted on building gender-diverse organisations.
What We’re Tracking
Female and diversity-focused products or services, start-ups and businesses led by women/diverse founders, investment and research.
imagilabs (Sweden)-co-founded by Dora Palfi and Beatrice Ionascu is an all-female founded startup that makes coding more accessible to young girls.
Founded in 2018, and an alumnus of both Apple’s Entrepreneur Camp and Google for Startups, imagiLabs is bridging the gender divide in coding with its wearable device, the imagiCharm.
imagiCharm sales increased by 300% between Q3 and Q4 of 2020.
It raised $300k (€250k) in pre-seed funding, allowing it to further equip the next generation of working women with critical coding skills.
A number of high profile proponents of gender equality in technology participated in the round.
Angel investors participating in the round include Eros Resmini, Founder & Managing Partner at The Mini Fund and the former CMO of messaging platform Discord.
Coffee Break? Read This
We’d love to hear from you. Get in touch with Jana via the The Purse website or tweet @jointhepurse and @janicka.
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