DUBAI — Saxo Bank, the leading Fintech specialist focused on multi-asset trading and investment, has revealed the most traded stock by its GCC-based clients in Q1, with GameStop mania seeing the video game distributor edge major technology brands including Tesla, Nio, Amazon and Apple during a three-month period defined by frenetic options trading, shares sold short and chat room wars.

“Global equities continued the upward momentum in the first quarter amid increased volatility, which was especially evident in several heavily shorted stocks in the beginning of the year, such as GameStop and AMC,” said Peter Garnry, head of equity strategy at Saxo Bank.

“Many of these names continue to attract retail interest although some of the hype seems to have faded. We continuously encourage investors to be cautious and closely monitor risk when trading in these stocks with unprecedented high volatility.”

Tesla ranked second amongst Saxo Bank’s GCC-based traders, with Garnry adding: “Tesla remains a popular stock with our clients and the increasing competition is somewhat at odds with the current valuation of the Tesla, but the company continues to surprise with Q1 delivery numbers at 170,000 vehicles above analysts’ estimates.

“This was particularly driven by a big uptake in Model Y sales in China which fueled short-term momentum in Tesla’s share price. However, Tesla’s free cash flow generation remains stretched given the rise in competition which will be the long-term theme for investors to watch.”

With the global market leaning towards a more reflationary environment, Garnry urged investors to increase their exposure to the commodity sector and high-quality companies with low debt leverage.

“The rising interest rates are likely to create a downward adjustment of equity valuations in the most speculative growth segments such as bubble stocks, e-commerce, gaming, green transformation, and next-generation medicine stocks. This is also why we see a rotation into cyclical sectors that will benefit from the economic recovery and a reflationary environment,” he said. — SG