👋 Introducing China's new stock exchange

Hi Reader, here's what you need to know for September 8th in 3:09 minutes.

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Today's big stories

German telecoms firm Deutsche Telekom announced it was expanding its stake in T-Mobile US
A new stock exchange is launching in China, which in the past has brought a unique opportunity to profit – Read Now
Chinese exports hit a record high in August, despite ongoing disruptions caused by the pandemic

Hold, Please

What’s Going On Here?

Deutsche Telekom agreed to increase its stake in T-Mobile US on Tuesday, presumably after the German telecoms firm waited through two hours of gratingly low-quality Muzak.

What Does This Mean?

Deutsche Telekom agreed to buy a 5% stake in T-Mobile US from Japanese tech conglomerate SoftBank, which will bring its total ownership to almost 50%. In return, SoftBank’s set to receive shares in Deutsche that’ll give it 4.5% ownership of the German operator.

Deutsche hasn’t ruled out increasing its stake to more than 50% either, which would give the company control over what T-Mobile US can and can’t do. That might be the next stage in Deutsche’s master plan of conquering the States, which it certainly seems serious about doing: the company just agreed to sell its Dutch business to keep funding its adventures in America.

Why Should I Care?

For markets: Mixed fortunes.
Investors were pretty lukewarm about Deutsche’s announcement, probably because they’re waiting to see how its dalliance with the US market actually pans out. But they were happy with SoftBank’s side of the deal, and they sent the conglomerate’s shares up 10% – the biggest jump since last December. SoftBank has a habit of buying back its own shares and pushing up their price, after all, and investors might be expecting it to use the cash from the sale to do exactly that.

Zooming out: We’re gonna need a bigger mattress.
Deutsche’s agreement isn’t unique: there’s been a boom in deals of all kinds in the last year, which has had a lot to do with rock-bottom interest rates and record-high stock prices. And it doesn’t look like that boom’s about to fizzle out in Europe anytime soon: data out on Tuesday showed that the region’s companies are sitting on $3.8 trillion in cash – their biggest stash on record and one that’s just begging to be spent on mergers and acquisitions (tweet this).

You might also like: Why a resurgence in dealmaking is working wonders for this strategy.

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Analyst Take

China’s New Exchanges All Follow A Profitable Pattern

What’s Going On Here?

Late last week, the Chinese government announced plans to launch a brand new stock exchange.

And while it’s not going to be live for a few months, it’s still worth paying attention to sooner rather than later.

For one thing, it could change the way investors are feeling about Chinese stocks overall, after government crackdowns left them scurrying to avoid the country’s most at-risk companies.

But maybe more importantly, every time China launches a new exchange, the same one thing tends to happen.

And if you’re aware of it, you could profit from it.

So that’s today’s Insight: the ins and outs of China’s new stock exchange, and how to take advantage of this profitable pattern.

Read or listen to the Insight here

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