Tag Archives: China

Our Investment criteria and Interests for 2016 and beyond

Dear Friends:

 

Following my joining the board of Elate Partners, www.elateinvest.com – a Chinese investment group backed by large institutional, strategic and wealthy individual investors from China – a lot of you have been asking me about the kind of deals Elate would be interested to invest in in partnership with Blackhawk.

 

Without further delays, here is the short list as per below

Guidelines

  •  Western Investment:
    • Hard asset-based deals that have “intrinsic values” of their own, for example mines, oil field, certain real estate;
    • Businesses with potential synergy with China;
    • Generally shy away from businesses that rely on services for revenue due to a lack of expertise
  • China Expansion:
  •  Technology-based and other businesses that could be transferred to China sometime in the future (regardless whether the US operation is kept intact or not);

For More: http://ziadabdelnourblackhawk.com/our-investment-criteria-and-interests-for-2016-and-beyond/

Thank you,

Ignoring China is no more an option

I strongly believe that China will continue to grow over the next few decades. It will increase not only its economic power but also its geopolitical power in the world. It will be not only a large consumer market but a strong breeding ground for innovations as well.

 

Twenty years from now, for a lot of global companies, China will be at the center of their strategies.

 

Besides, the Chinese have always been known as good entrepreneurs, and particularly good small-business people. This has been in the blood of the Chinese for maybe as long as the Phoenicians (Lebanese) have been trading. So you’ve got entrepreneurial people at the grassroots level who are very independent minded. They’re very quick on their feet. They’re prone to fearless experimentation: imitating other companies here and there, trying new ideas, and then, if they fail, rapidly adapting, correcting, and moving on.

 

For More: http://ziadabdelnourblackhawk.com/ignoring-china-is-no-more-an-option/

Thank you.

Money Making Secret on Planet Earth Today

For the small club of companies who trade the food, fuels and metals that keep the world running, the last decade has been sensational. Driven by the rise of Brazil, China, India and other fast-growing economies, the global commodities boom has turbocharged profits at the world’s biggest trading houses.

 

Who are those firms and what makes them so powerful?

 

They are the Club of 16 comprised of Vitol, Glencore, Cargill, Koch Industries, Archer Daniels Midland, Gunvor, Trafigura, Mercuria, Noble, Louis Dreyfus, Bunge, Wilmar International, Arcadia, Mabanaft, Olam and Hin Leong.

 

Together, they are worth over one trillion dollars in annual revenue and control more than half the world’s freely traded commodities. Many amass speculative positions worth billions in raw goods, or hoard commodities in warehouses and super-tankers during periods of tight supply.

 

How big are the biggest of them? Well, take Vitol and Trafigura as an example, they sold more oil last year than the oil exports of Saudi Arabia and Venezuela combined and their reach is only expanding.

 

Big trading firms now own a growing number of the mines that produce many of our commodities, the ships and pipelines that carry them, and the warehouses, silos and ports where they are stored

 

ForMore: http://ziadabdelnourblackhawk.com/the-best-kept-money-making-secret-on-planet-earth-today/

Thank you,

Oil Geopolitics and Iran

There has been much fuss lately as to the huge impact a deal with Iran will have on oil prices globally.

I personally see the near-term impact on oil markets likely to be far less significant than most oil analysts predict, despite Iran’s large natural gas and oil reserves.

The bottom line is that a deal with Iran would likely add only about 500,000 barrels/day to the 90-million-barrel daily oil market over the next 12 months. This would be a non-trivial amount, but clearly not a “game changer”.

The baseline is for prices to return to about $70 for a barrel of Brent Crude in 2016. Additional supply from Iran would knock roughly $5/barrel off expectations – or less than one quarter of a standard deviation. Said another way, additional Iranian output could move prices lower, but many other factors, such as changes in global GDP or the return of Libyan oil, could prove more meaningful over the next year. What’s more, recent trading suggests the market has already priced in much of this risk.

Over the longer term, I believe an increase in Iranian output could be for sure significant. With investment and time, Iran could meet a greater share of global demand for oil and liquefied natural gas (LNG). It also could ship natural gas to Europe via pipeline, challenging Russia’s dominance.

The details of the contracts Iran signs with international oil companies will be telling. Depending on the terms offered to Western companies, other oil producing nations – Iraq, in particular – could feel the pressure. Increased competition for investment would be a material signal that lower prices will endure longer.

I still though believe that the key factor in the global geopolitical game of oil will be China not Iran.

China is today the second largest importer of oil in the world and its appetite for oil is all but insatiable, growing at 8 percent a year. They decided to go with cars instead of sticking with mass transit. Plus, factories that produce cars can easily be converted to military needs. I believe within twenty years they’ll have more cars than the U.S. and that same year they’ll be importing just as much oil as we do. So here’s the deal. They don’t have it. Want to guess where they get it from? Iran. They signed a deal saying if Iran would give them lots of oil, China in return would block any American effort to get the United Nations Security Council to do anything significant about its nuclear program. They’ve been doing a lot of deals with each other ever since. Oh yeah, these two countries are very cozy indeed. Anyway, China gets most of its oil from Iran. And they don’t just need oil—they need “cheap oil” because they sell the least expensive gasoline in the world. I think that’s to keep everybody happy driving all those new cars.

Bottom Line: Iran’s agreement with major world powers to curtail its nuclear program in exchange for the lifting of economic sanctions opens up the world’s fourth-largest oil reserves, second-largest natural gas reserves and an 80 million population to multinationals. But the strict, decades-old U.S. restrictions on doing business with Tehran, which predate the nuclear crisis and relate to other concerns such as terrorism support and human rights abuses, will remain in place.

What will be particularly difficult for American companies is if they are the only ones that are prohibited whereas the rest of the world will be trading. Problematic because every time you’re at a disadvantage relative to your foreign counterparts, you lose market share.

Navigating the Emerging Markets Of Today

As we at Blackhawk Partners see it today, one of the biggest advantages emerging markets have offered investors is a strong growth story

 
Over the past decade, growth in emerging markets has in fact outpaced growth in developed markets by more than double. Growth in gross domestic product (GDP) looks like it will continue to outperform that of developed markets for at least the next five years, according to estimates by the International Monetary Fund.

 
We are often asked why economic growth and stock market performance don’t always directly correlate in a given year, and if that’s the case, does a nation’s GDP growth matter at all when it comes to investing in companies? While it’s true that growth and stock market performance can be divergent at times, there is no question that growth matters since company earnings depend on general economic growth.

 

For More: http://www.blackhawkpartners.com/navigating-emerging-markets-today/

Will Sanctions have Economic Impact on Russia?

My short answer: Nothing of significance will create a dent in Russia’s economy.

 

Think about it this way:

 

  • Suspending Russia from the G8 Summit and placing a visa ban against Russian politicians are merely symbolic gestures and do not seem to affect Russia in any symbolic way.

 

  • Even the sanctions on trade will not cause much harm (as only 2 percent of Russia’s exports got to the U.S. and mostly includes petroleum products, and only 5 percent of total imports from U.S., including vehicles, agricultural products, chemical products and civilian aircrafts, etc). They can always procure them from other countries.

 

  • Russia can survive by forging a close alliance with China. They are not allies the way the U.S. and European Union are, mainly because Russia expects China to have a go at Russia’s Far East at some stage. However, tactical needs for survival can trump the strategic concerns. That can result in close and truly cooperative alliance of China, Russia, Kazakhstan, perhaps Mongolia, some others, with China building high-speed railways all the way to Sevastopol.

 

        For More:  

                 http://www.wnd.com/2014/04/will-sanctions-have-economic-impact-on-russia/

Thank You,

Challenges and Opportunities in India

The good news is that unlike China, which faces structural change as it shifts from an export-driven to a consumer-driven economy, India’s growth has long been dependent on domestic demand, even as exports have risen. However, its major weakness remains infrastructure, with basic transportation, power grid and irrigation systems lagging behind those of China. In a welcome move, the government plans to increase infrastructure spending by INR1.74 trillion ($38 billion) this year and that is always welcome.

 
The better news is that unlike China and Brazil, which have witnessed an increase in acquisitions by local private equity firms, India attracts a greater proportion of foreign private equity firms. The country’s legal and governance systems have indeed long attracted private equity investors from around the world which bodes very well for us at Blackhawk.

 
Further, and since the opening of the economy in 1991, the country has seen huge improvements in both capital markets regulation and in corporate governance.

 

For more:  Challenges and Opportunities in India

Women’s Coming to Power

If China and India each represent 1 billion emerging participants in the global marketplace, then this group; which we will call the “power group” is made up of women, in both developing and industrialized nations, whose economic lives have previously been stunted, underleveraged, or suppressed.

 
These women, who have been living or contributing at a subsistence level, are now entering the mainstream for the first time. We estimate that about 870 million of them will do so by 2020, with the number conceivably passing 1 billion during the following decade. Their presence as economic actors will be widely felt, because they have long been overrepresented in the ranks of subsistence agriculture and other resource-based forms of work.

 

As they move into knowledge work, in domains ranging from manufacturing to medicine to education to information technology, their sheer numbers will hasten the integration of the regions where they live into the larger economy.

 

For More: Women’s Coming to Power

Thank you,

The US Global Geopolitical Future

Well this encapsulates the American psyche to the letter for people who are still trying to figure out what American Power really means.

 
While I don’t approve of the American Global Empire, I respect the intelligence and drive of those tasked with maintaining and expanding it–and they number in the millions.

 
Bottom Line: There is only one nation-state which can project hard power today and it is the U.S.  A missile is not power-projection, because it exerts control over nothing; it is deterrence or threat, but not power that can be projected. Only aircraft carrier groups and the ability to transport an army by sea and air to any locale in the world is power projection.

 
It is a fact to everyone today that the U.S. is the only great power with true power projection because it alone has hegemony over the world’s reserve currency. The U.S. skims a stupendous arbitrage profit from creating dollars and exporting them in exchange for real goods.

 

For More: The US Global Geopolitical Future

Thank You,

Why Greek Shipping? World’s Foremost Shipping Superpower

With our Firm’s recent signing of a 200 Million Euros Partnership Agreement to Fund & Facilitate the Purchase of 25 Vessels – http://www.pr.com/press-release/582221. I am frequently asked by partners and observers alike why a Greek company as a platform for our roll-up and why a particular interest in the shipping industry.

 

Hopefully this will shed some more light as to how we at Blackhawk operate.

 

1. The rationale?

Blackhawk is first and foremost a “physical commodities trading house” and second a “family office private equity shop”. What better business model to adopt than building a vertically integrated operation that controls the whole commodities trading food chain from logistics to trading and investing all under one roof? This partnership with Golden Sea Ways accomplishes all of that and more and we at Blackhawk cannot be more excited about it.

 

Read More: Why Greek Shipping? World’s Foremost Shipping Superpower

Thank you,