Mr.Morvell From Halarona:professionals make money on trends of market volatility

Situation at the world stock markets and in the investment business is so unstable today that we sometimes have to listen to the comments on lack of prospects at the stock markets for the big players in short and medium term. Negative market news and red indicators of indices can make anyone believe in such prospects and plunge into a long depression but there is quite another point of view. Alan Morvell, a director of the analysis department of Cyprian trading company Halarona Investments offered to give an interview to our journal aiming not only to comment on the current situation at the stock markets but also to defend the unpopular issue that it is possible to earn at the stock markets even during the crisis.

Dear Mr. Morvell, first of all we would like to ask how do you estimate the prospects of the stock market in 2009?

Hi! Thanks a lot for a chance to speak out. I’m very glad that in world mass media there is place for an optimistic review of the world financial markets and earning tools. Well, the continuing recession in the US and in a number of other countries is not a good tendency which can be described with a simple principle: “If business goes not very well and we think only of bad things everything seems to us even worse.” There is a good reason to believe that in view of the Dow Jones Index's behavior two weeks ago. Dow Jones has broken through a psychological barrier and now everything will come to the situation when in 2009 we may see it even below 6000 mark. We should expect a further drop of the index however only after a slight up. 

And if Dow Jones set a pace on the stock markets, the raw-material markets are wholly dependant on oil prices. And here the picture is spoilt with the expectations of the market participants regarding the global GDP which is apparently will turn negative by the end of this year. It is natural since drop in production causes drop in demand and that will result in irresistible drop in oil demand. The only thing that saves the rate of a black gold today is OPEC quotas. By limiting the oil production OPEC has managed to keep the prices steady at the record $38-40 a barrel. In this situation one shouldn’t forget that the projects not related to OPEC and which are not restricted by OPEC quotas will extend oil supply up to 150,000 bbl/d in 2009 and 130,000 bbl/d in 2010. No matter that one can say that it is a growth that comes in stark contrast to the 330,000-bbl/d decline seen in 2008, which was the result of delays in key projects. The largest sources of growth in 2009 outside OPEC are the United States, Brazil, and Azerbaijan, offset by large declines in production in Mexico, and Russia. Surely, I know that it is necessary to consider a large complex of indices to evaluate the prospects of market developments in 2009 but in general the analysts of Halarona Investments are very skeptical about 2009 from the market development point of view. But at the same time we are greatly inspired with the prospects of 2009 from the earning point of view!  

What makes you so optimistic? 

We are sure that all the professionals make money on the trends of market volatility. Constant ups and downs, daily fluctuation of the market by several per cents – all these could be used to make a profit! Though it is better to say not could be used but should be used. 

Do you have such an experience?

Yes, I have. Before joining Halarona Investments I have had to do with the crisis at Asian markets in 1998. That time some people tried to fix any profit while I was holding short positions though it was risky. After balancing I made sure that it was one of the most profitable trading periods of my life.  

Your confidence in tomorrow makes us really glad. How do you plan to utilize your energy? What plans does your company have? 

We still believe that our future is the mutual funds. No matter what cataclysms may happen, this kind of business is the most profitable one since people pool their money to have an opportunity to influence the market with large aggregate amounts. Surely we realize that today’s world tendency is an outflow of funds from the mutual funds. According to our estimates nearly 10% have been withdrawn within the latest months. The markets of Latin America and Eastern Europe have suffered more than others. However it’s necessary to keep in mind that today the market has already came near to the bottom, hence very soon lots of people will get a desire to enter the market and then the interest in the mutual funds will heighten.

And what if it fails to heighten? 
Fortunately Halarona Investments has considered this version as well and a few months ago we opened a special department or I can say we started a new direction in collective investments on the Internet to make our business more profitable.

Here is an interesting issue. Could you tell a little bit more about it?
Currently I cannot reveal all our secrets but I can say that very soon we’ll open a new era of mutual funds on the internet. We have already lifted the veil of mystery last week when we issued a press release about the completion of the IECTP technology development (Integration e-currency to trading platform). At the moment we’re finishing to work at our project and as soon as we finish the last tests we’re planning to make a revolution in the investment business. Very soon every user will be able to invest his or her e-currency in a stock market via API merchants and to become the partial owner of our mutual funds. 

But you are still planning to make money during the crisis, aren’t you? 
The answer is quite simple. If you see daily ups and downs of the stocks by 1, 2, 5 and even 10%, you may work the principle ‘buy cheap, sell expensive.’  

What can you say about the money market? 
It’s very difficult to make a cold evaluation of the stock market today since one hardly can make any forecasts when the foreign debt is more than a 12 digit amount. Generally speaking it is impossible to understand the basis of the US dollar rate which is seemingly supported only by the promises. As for euro here the situation is not much brighter since after the recent reports of the European banks one cannot talk about the growth of the economy in Europe and therefore about the rate of Euro. Germany tries its best to become the economic "locomotive" but in practice it doesn’t show any significant results. Considering the latest scandal with the Minister of Finance of Japan I would prefer not to speak about yen because I think that such events do not happen for no particular reason and apparently today yen is influenced by some human factors rather than some objective economic ones. And as for the other currencies I think that there is no sense to speak about them as the foreign exchange markets are still influenced by the currencies mentioned above. 

Thank you very much for such an interesting interview. We sincerely wish a good luck to you and your business and hope that even during the crisis you will continue to please your clients and your company itself.

Thank you too!