Baidu & Xiaomi – to see volatility if Trump returns?

➡️ The biggest news this week has to be US President Joe Biden stepping down from the presidency election to make way for Kamala Harris instead. The market however, is currently of the view that this is unlikely to result in a clearly better net showing for the US Democrats versus Donald Trump in the November 2024 elections.

➡️ The possibility of Donald Trump regaining the US presidency might cause volatility in Asian technology bonds as sanction risks rise. Some of the Chinese tech names that were affected under the last Trump administration include Xiaomi which was placed on the restricted US investment list, and Baidu – which was accused of developing AI for the Chinese military.

➡️ Investors who expect volatility in these two stock names as we head closer into the US elections in November, may wish to obtain leverage via Macquarie’s call or put warrants to trade either direction in the stock price, at a much smaller capital outlay than trading the underlying shares directly.