Category: Markets

Bitcoin
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Bitcoin to Hit Fresh Highs – But Standby for Regulator-Triggered Price Swings

Bitcoin

The Bitcoin price nears $50,000 and will continue to reach new highs in this first quarter of 2021 – but investors should also expect volatility due to increasing regulatory scrutiny.

This is the warning from Nigel Green, CEO and founder of deVere Group, one of the world’s largest independent financial advisory and fintech organisations. 

It comes after the cryptocurrency hit more than $49,700 for the first time in history on Sunday the 14th of February.

Mr Green says: “Last week was a massive one for Bitcoin, reaching new all-time highs amid soaring interest from institutional investors.

“Morgan Stanley, the U.S. investment giant is reported to be considering investing in Bitcoin through its $150 billion investment arm; Elon Musk’s Tesla announced it had invested $1.5 billion in the digital currency and was getting ready to accept it as payment; BNY Mellon confirmed that it had created a digital assets unit to build a custody and admin platform for crypto assets; and Mastercard said it would give its merchants the option to accept cryptocurrencies later this year.

“In addition, Miami confirms it is considering paying workers and collecting taxes in cryptocurrency and the mayor of the city wants to hold Bitcoin in the city’s treasury.

“This all follows the likes of PayPal’s decision last year to allow customers to buy, sell and hold Bitcoin and as Wall Street giants like Goldman Sachs and JP Morgan issue RFIs (request for information) to explore Bitcoin and crypto asset custody.”

He continues: “There is a clear direction of travel: institutional investors are taking Bitcoin more and more seriously as a financial asset and a medium of exchange. They are increasing their exposure to it at a faster rate than ever before.

“This is pushing cryptocurrencies ever more into the mainstream financial system and, subsequently, driving the price skywards.”

The deVere chief goes on to say: “With the growing institutional demand combined with ultra-low interest rates, we can expect Bitcoin – which has already given a 55% return so far year to date after the 300% gain in 2020 – to reach new highs in this first quarter of 2021.

“However, with increasing dominance and value, comes increasing regulatory scrutiny. 

“Bitcoin and other cryptocurrencies will come under the spotlight from watchdogs like never before and this can be expected to create volatility in the market.”

His warning comes as central banks and governments around the world ramp up their focus on digital currencies. 

In the U.S. in recent days, Treasury Secretary Janet Yellen raised again the prospect of future cryptocurrency regulation and as the Securities and Exchange Commission (SEC) could reportedly investigate Elon Musk over Tesla’s $1.5 billion Bitcoin purchase.

Nigel Green concludes: “Institutional investors are increasingly appreciating that in this tech-driven, ultra low interest rate, low growth world, and where there is diminishing trust in traditional currencies, digital and borderless cryptocurrencies may be becoming a better fit.

“We can expect the price of Bitcoin to surge to fresh highs as a result.  But investors must be aware that regulatory pressures will cause price turbulence.”

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ArticlesMarkets

Self-employed Workers Estimated to Contribute £125 Billion to Drive the UK’s Economic Recovery

economic recovery 2021 covid pandemic
  • Self-employed and side-hustler movement continues to thrive despite challenges caused by COVID-19

  • Over 55s are leading the way in starting new businesses or side hustles during the pandemic

  • By choosing a challenger banking, newly formed businesses are more likely to grow

Research released on Monday by Mettle, the NatWest-backed business account, using YouGov’s platform, estimates that the UK’s growing self-employed and side hustler movement will contribute an estimated £125 billion in turnover to the UK’s economic recovery in 2021. Furthermore, small and medium-sized businesses (with 1-49 employees) are estimated to contribute approximately £310.46 billion.

Pre-pandemic in 2019, the Office of National Statistics (ONS) found over 1.1 million people were either employed in two jobs or self-employed in addition to having another job. COVID-19 has only accelerated this and the growth of the self-employed and side hustler movement, with changes in employment and lifestyles pushing more people to work for themselves than ever before – either through choice or out of necessity of being furloughed or made redundant. The population of self-employed workers in the UK now sits at over five million, making up 15% of the UK’s workforce.

Around 25% of all UK adults now consider themselves to be a side hustler, according to Henley Business School. Having ‘a side hustle’ in addition to a full-time job (from freelance design work, to a passion such as wedding photography), has for the first time for many, become a necessity to supplement income.

Mettle’s research surveyed 2,194 self-employed workers to uncover the role of this segment in boosting the UK economy, the barriers they faced when starting their venture, and the role of banking organisations in helping them thrive.

According to the research, the most popular motivation for going solo was the flexibility and freedom it provided (57%), followed by their desire for a change in work/life balance (38%), and wanting more meaning and purpose in their life (24%).. Those aged 55 and over are leading the way when it comes to self-employment, with 38% of limited companies and side hustles formed post-March 2020 having been established by that age group.

The rapidly expanding self-employed and liquid workforce movement is being supported by a rise in challenger banking solutions that provide online products and services. The majority (83%) of respondents who use challenger bank services and feel supported by them, felt this was because of the ability to do everything virtually, their bank’s ability to get things done quickly (61%) and the fact that their innovative technology and products are more compatible with their business needs (51%).

Compounding this, the COVID-19 pandemic is making the challenge of running a business or side hustle even more difficult. 57% of those surveyed are not looking to expand their business or side hustle or enter a new sector in 2021, with over a quarter of respondents specifically not looking to expand (29%) citing the UK’s economic uncertainty as the reason why. More than ever solutions like Mettle are of utmost importance to help this audience to manage their finances, and to support their maintenance, growth and contribution toward the UK’s economic recovery.

Marieke Flament, CEO of Mettle, commented: “More people are choosing to start or create something of their own than ever before due to changing lifestyles, personal circumstances, or fulfilling a personal ambition. This research highlights the importance of this growing movement for the UK’s economic recovery in 2021 – particularly amongst the over 55 age group.

“The smallest end of the SME market has historically been underserved in terms of business banking, with the majority of incumbent institutions focusing on large commercial customers and corporates. This made it difficult for small business owners to get set up quickly, get paid and tax ready. We champion self-employed workers and side hustlers and are dedicated to building our product to serve them and their needs.

“As the UK looks to rebound from the economic damage caused by COVID-19, it’s absolutely vital that this segment has access to the support and services it needs to thrive. Mettle’s position within NatWest means we can facilitate this. We leverage the experience and risk knowledge of NatWest, but we also operate like a start-up, so we can move at pace and offer a product that enables self-employed and side hustlers to start, run and grow their businesses successfully.

“Banking doesn’t need to be complex, and we think new small business owners, self-employed workers and side hustlers should be able to rely on their bank to help them easily navigate day-to-day processes as they focus on overcoming the macro-economic hurdles outside of their control.”

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ArticlesMarketsStock Markets

Bitcoin, Dogecoin Hit All-time Highs Driven By Elon Musk – But How To Choose An Exchange?

Dogecoin, bitcoin crypto currency

Bitcoin was driven to new record highs on Tuesday morning – trading above $48,000 – as investors continue to pile in on the news that Tesla bought $1.5bn worth of the cryptocurrency.

A filing with the U.S. financial regulator on Monday reveals that the electric car company run by the world’s richest person, Elon Musk, has made the massive purchase of the digital asset which has jumped more than 300% in a year.

The surge in the price of Bitcoin and other cryptocurrencies, including Dogecoin – which was also fuelled by an endorsement by Musk on Twitter over the weekend – comes as digital currencies become mainstream due to soaring interest from both retail and institutional investors, increasing levels of mass adoption, and as global interest rates remain at historic lows.

But how does a new crypto investor choose a platform on which to buy, sell, hold and exchange?

Nigel Green, an influential cryptocurrency expert and CEO of deVere Group, one of the world’s largest independent financial advisory and fintech organisations, says there are five fundamentals.

He says: “More and more people are wanting to invest into cryptocurrencies, knowing that they are the future of money.

“But many, even those who have extensive knowledge of the stock market, have concerns about selecting the right cryptocurrency exchange.

“The total capitalisation of the cryptocurrency market is now an estimated $1.2 trillion, but it is still lightly regulated. This means that it’s vital that investors know what to look for in an exchange.”

He continues: “There are five fundamentals for your checklist.

“First, security. The system of a private exchange for saving consumer documents as well as funds should be as decentralised as possible as if it’s all on a couple of web servers, that makes them easy hacking targets.

“Investors should also look for a system that utilises two-step verification throughout login, such as a password, and also quick-expiring codes received through the app.

“Avoid exchanges which offer cheap trade costs or services but are based in areas around the world where investor security is weak.

“In addition, investors ought to assess exchanges as well as the businesses behind them as they would certainly do with any other organisation that they would depend on to protect their money.”

“Second, costs. Some exchanges are proficient at addressing costs in advance, while others hide them. Go for the exchanges that are upfront and transparent.

“Third, simplicity and ease of use. Take into account that you’re not always going to trade from your desktop. In fact, finding an exchange that focuses on ‘on-the-move’ trading via a secure app is often a better option.

“Fourth, dependability. Does the exchange run efficiently when trading quantity is high, or when the currencies rate is see-sawing? Some exchanges are notorious for their system accidents and trading stops.

Fifth, client service. Make sure an exchange has a chat or fast communication service integrated.”

Mr Green concludes: “Whilst Elon Musk’s Tesla, and other institutional investors, including PayPal amongst others, will have teams of crypto experts behind them, retail investors can also get involved.

“Investing in cryptocurrencies remains highly speculative and it is not for everyone – but one of the keys to success would be selecting the right crypto exchange.”

Covid stock investors
ArticlesBankingMarketsStock MarketsTransactional and Investment Banking

What Has Covid Taught Investors

Covid stock investors
  • 44% of investors are now looking to back UK-based companies rather than global firms –  9,629,000

  • 45% of investors feel their ‘risk-appetite’ has increased due to Covid-19, as traditionally safe investments in big companies are no longer viable – 6,942,000

  • 27% of investors are looking to invest in sectors created by the Covid-19 pandemic, such as PPE, social distancing equipment and virtual solutions – 5,674,000

  • 19% of investors believe the coronavirus pandemic has opened more investment opportunities than it has closed – 6,278,000

Investing was one of the most unpredictable aspects of 2020 for anyone concerned with the market, whether that be a sophisticated portfolio or just a workplace pension. The stock market crash at the start of the lockdown and continued economic disruption has left many wondering what the future will hold, while soaring tech stocks have added further complexity to an ever changing market. But what has the Covid pandemic taught investors? 

The overall effect of this period has led investors to reconsider what they are doing with their investable assets. To understand this shift, SME investment specialist IW Capital has conducted nationally representative research to uncover the sentiments of the UK’s investors.

 

Look beyond the panic

Each period of disruption, like that felt last year, offers opportunity for companies to adapt quickly to the changing times and although there has been a lot of worry and negativity surrounding the new lockdown restrictions, we have to look to the positives with one of them being the roll out of the Covid vaccines. Working with both entrepreneurs and investors, there is a clear desire from the small business community for growth investment and to take a big step growth-wise this year. With a 12% increase in new businesses starting up during 2020 compared to 2019, 2021 is set to create some exciting investment opportunities for investors throughout the country.

 

The unexpected happens 

This year has taught us that the unexpected does happen. Investors need to look to the future and prepare for the unexpected to improve financial resilience. This could be by having liquid assets or a rainy-day fund you can use if investment values fall, which is particularly important if you’re drawing an income from investments. Having options for when the unexpected does occur should be part of any investors financial plan and is something that has been brought to the forefront for many as a result of the pandemic. 

 

Maintain a diverse portfolio

The Covid pandemic has had a far-reaching impact across a variety of sectors, however some industries have been affected far more than others, with travel and hospitality being forced to close for months at a time and unable to trade. In contrast, the pandemic has created opportunities for some sectors too, such as manufacturing and biotech. While a diverse portfolio will still have suffered volatility, it can help lessen the impact. Investing in a range of assets, industries and locations can help spread the risk. When one investment falls, another may perform better helping to create balance.

 

Don’t overreact to market volatility

When the pandemic first hit and the stock market plummeted, many investors began to panic and looked to sell shares in order to avoid potential future losses, but when investing, a long-term time frame and goal is so important. Short-term volatility is often smoothed out once you look at investment performance over a longer time frame. It can be frustrating to see that investment values fell in 2020, but when you look at performance over the last five years, for example, you’ll probably still see an upward trend.

 

Luke Davis, CEO of IW Capital:

“Investing and investing wisely has never been easy by any stretch but this year has been particularly difficult for investors at every level. 2020 demonstrated the value of long term investing and future planning. The stock market crash in March triggered a real halt in investment, and although the market hasn’t fully recovered, there has been strong growth since November and in places in the US share indexes are actually higher than the last year. 

“There have been winners and losers from each stage of the pandemic with sectors like travel feeling the true impact of the pandemic and others like online solutions seeing growth and opportunity in a time of financial turmoil. But, this is true of any world event and has forced investors to look to be more future facing.”

ArticlesMarkets

MarketFinance Lends £342m, End of Term Report Shows Trends and Insights

 

More loans, larger businesses and a regional shift – these are some of the trends and insights that fintech business lender MarketFinance observed during 2020.

 

Key insights
  • MarketFinance lent a total of £342.4m across all solutions, over the first 11 months of 2020. Representing a 3.4% increase in total lending over the same period in 2019 (£331.1m)

  • The profile of companies using invoice financing changed significantly during COVID-19. Those businesses using invoice financing were both larger than usual (an average turnover of £2.1m, compared to £1.3m in 2019, a 60% increase) and received 83% more financing on average than they did in 2019

  • Businesses in London, Hertfordshire, the East of England and the South West experienced the greatest drops in invoice financing year on year, with a 45% decrease in London alone. These geographies are hubs for the Support Services and Information & Communication industries, indicative of how hard these sectors have been hit by COVID-19

  • Demand for business loans soared with a 13-fold increase in loans between Q2 and Q3 2020. The majority of loans (60%) were made to businesses in Support Services, Wholesale & Retail Trade, Manufacturing and Construction.

 
Q1 and Q2 2020

The UK’s economic prospects showed signs of turning early in 2020, as Brexit-related uncertainty began to fade. Despite the promising start to the year at MarketFinance, with larger businesses borrowing, this upward turn halted suddenly when the COVID-19 pandemic arrived. The country and economy, effectively, went into lock down at the end of March. However, during this time when UK GDP crashed by 2.2% across Q1, it was also the first sign of the coming shift for many companies towards new alternative financial mechanisms.

As of Q2, 46% of businesses reported that income was down by 50% and so the number of companies using invoice finance dropped by 35%. However, while smaller companies with a narrow spectrum of business activity looked to other financial solutions, larger businesses with diversified workflows (and therefore revenue streams) were able to continue using invoice-backed facilities to boost their cash flow. The average revenue of these companies was over double what it had been during the same period the previous year, growing to £2.1m, an increase of 127%. In fact, while approved company applications for invoice finance went down, invoice values actually went up. The average size of an invoice being financed increased significantly in Q2 in comparison to the previous four quarters.

 

Q3 2020

MarketFinance became an accredited CBILS lender and so the quantity and concentration of loans advanced increased by a significant 13 times compared with Q2. Interestingly, over a third (36%) of all loans to manufacturing companies went to those based in the Midlands.

Anil Stocker, CEO of MarketFinance commented: “Small businesses will play the pivotal role in the UK’s economic recovery as we emerge from the pandemic, and we are confident that the bounce back will, with the right support, be swift. These linchpins of our economic fabric will require innovative, sustainable and tailored financial solutions that are fit for purpose in a post-pandemic world. It is up to all of us – accountants, brokers, business advisors, banks and lenders – to continue to step up to the plate and help these businesses survive and thrive.”

 

Q4 2020

Invoice finance was showing gradual growth as of mid-November 2020, suggesting some normalisation of business activity, despite the second UK lockdown. Although the number of companies using invoice finance per quarter dropped by 55% from Q1 to Q2, the figures for Q4 appear to be trending up on both Q2 and Q3. There’s some way to go before we see levels return to those of 2019, but there’s every sign of businesses recovering well as we move into 2021.

COVID-19 continues to affect global supply chains. Manufacturing, Wholesale & Retail Trade, and Construction companies have sought further funding to see them through the pandemic and beyond. Manufacturing companies received 19% of all MarketFinance loans across industries. 32% went to companies in the Midlands, 21% to companies in London and another 21% to companies in the South West, also continuing the trend from Q3. Facing significant challenges to both importing and exporting, Wholesale & Retail Trade companies received 15% of loans across industries, with 40% of these to companies in London.

Anil Stocker added: “Of course, the challenges and uncertainties that 2020 has presented won’t end come January. Businesses will have to navigate the aftermath of COVID-19 for months to come. However, although a lot of businesses have felt a negative impact over the past year, many have executed successful pivots and taken advantage of new opportunities that presented themselves. We’re hopeful that this strong comeback signals we’re already past the worst of the situation. We’ve also been incredibly proud of business support networks up and down the country. They’ve rallied together to support businesses throughout the year and we expect to see this support continue. We’re excited to carry on providing SMEs with the working capital they need to grow, innovate and build towards a successful future.”

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ArticlesMarkets

Online Retail Sales Growth Shows Lockdown 2.0 killed the High Street’s Revival, Says ParcelHero

ParcelHero says today’s ONS retail figures show e-commerce devoured over 31% of early Christmas spending as the High Street shut up shop once again in November.
November’s retail sales estimates, released today by the Office for National Statistics (ONS), reveal the High Street’s loss was online’s gain. Online sales spiked by 74.7% in value as early-bird Christmas shoppers hit the internet in record numbers.
The home delivery specialist ParcelHero says that the closure of non-essential stores across England for the second time this year caused the value of overall retail sales to fall back in November -4.1% compared to the previous month. This had a devastating impact on town centre stores’ sales but created record sales online.
ParcelHero’s Head of Consumer Research, David Jinks MILT, says: ‘England’s High Streets became ghost towns once more, as shoppers hunkered down in the warmth and safety of their own homes to snap up thousands of early Christmas bargains. Black Friday had an epic lead-in this November and Brits made the most of it by snapping up online bargains at Amazon and their favourite stores. The boom in online sales was so strong that it dragged up the volume of all retail sales by 2.4% compared to November 2019.
“This was great news for online retailers but highly challenging for their delivery partners as the value of department stores,” online orders increased by 157.2% and household goods stores and non-food sites saw sales rise by 124.7%. The sheer volume of home deliveries will have had a knock-on effect as Christmas orders really kicked in early this month.
“It’s no coincidence that the second lockdown was topped and tailed by the failure of well-known names such as Edinburgh Woollen Mill at the beginning and Debenhams and Topshop at the end. This was a truly dark month for the High Street with names such as Peacocks, Jaeger and Burton also collapsing into administration. Clothing stores reported the sharpest decline in sales volumes in November with a monthly fall of -19.0%. Retailers said that, despite extensive online Black Friday promotions, the enforced closure of stores had affected sales. Clothing sales were still a whopping -30.5% below pre-pandemic levels seen in February.”
“However, many retailers have woken up and smelled the Christmas gingerbread-flavoured coffee. 86.9% of businesses remained trading during Lockdown 2.0 suggesting that, despite store closures, many were able to continue to trade online.”
“Both consumers and retailers need to proceed cautiously for what remains of this year to avoid the impact of still soaring online sales. The beginning of the week is being dubbed ‘Manic Monday’ as last-minute orders are expected to swamp courier networks. For more information on how retailers can reduce the impact of the second wave by comparing carriers,” prices and services, see ParcelHero’s updated guide at https://www.parcelhero.com/en-gb/uk-courier-services.
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ArticlesMarketsWealth Management

Finance experts say THIS is how to bag the best Black Friday bargains

black friday

Finance experts say THIS is how to bag the best Black Friday bargains

With the second lockdown coinciding with Black Friday, shoppers will be vying to take advantage of bargains online this year more than ever before.  

The sheer volume of discounts and deals can be overwhelming, so experts at Hitachi Personal Finance have provided top tips on how shoppers can navigate the chaos and secure the best deals. 
 

  1. Start early
    A lot of businesses launch deals early in an attempt to spread out demand and avoid their systems becoming overloaded. Take some time to have a look around for the items on your wish list and to find the best deal early to make sure they aren’t already sold out by the time Black Friday hits.  
     
  2. Check product price histories
    Whilst reviewing the quality of the goods you are in the market for is important, doing some digging into a product’s previous price history is invaluable. Black Friday deals get their appeal from being the cheapest offers around, but this may not necessarily be the case. Making use of price comparisons sites, such as Google Shopping, will help you be certain you’re getting the best value for money and that your deal really is a good one.  
     
  3. Have a list of retailers ready
    If you’re after one particular item, such as a new laptop or smartphone, the chances are you’re not alone, and overcrowded retail sites can often run slowly or even crash due to heavy traffic. A key tip to try and negate this is to find several different retailers that all sell the product you want, then set up accounts with each one in advance with your purchase details securely stored so you’re ready to bag the best deal and check out efficiently. 
     
  4. Make the most of loyalty perks
    A lot of retailers often offer their members or those with loyalty cards exclusive offers or early access to deals. Signing up for a loyalty membership is usually free and very simple to do, and it’s this time of year when the persistent newsletters and emails tipping you off about the best bargains will come in handy. 
     
  5. Abandoned basket discounts
    Doing almost a dummy run of buying the products you want can be hugely beneficial, not just in terms of streamlining your shopping, but can lead to retailers offering targeted discounts to items left in your online shopping basket. Try bundling together everything you want but leave at the checkout stage, you may find you receive an email from the retailer offering you specific deals without having to endure any stress. 

 
Vincent Reboul, Managing Director of Hitachi Capital Consumer Finance, commented: “The effects of the pandemic have seen online shopping sales skyrocket this year, which is undoubtedly going to have an impact on what is already a busy day for retailers and shoppers on Black Friday.  

“Those irresistibly low prices often facilitate a mad dash to the checkouts, with everyone racing against each other to make sure they get the items they’re after, which can be a huge cause of stress and frustration. 

“With the vast majority of activity focused online this year in light of current restrictions, we are confident that our guidance will enable this year’s shoppers to relieve some of the pressure, by taking necessary steps to plan their Black Friday shop early and get themselves ahead of the competition.”  

For more expert insight into how you can have a successful Black Friday experience, please visit: https://www.hitachipersonalfinance.co.uk/latest-posts/money/top-tips-for-bagging-a-bargain-this-black-friday-and-cyber-monday/    

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ArticlesMarkets

Black Friday Weekend Spending Set to Hit £3m Every Minute

black friday

Black Friday Weekend Spending Set to Hit £3m Every Minute

Nearly £3m is set to be spent every minute over Black Friday weekend, according to a new report.1

The VoucherCodes.co.uk Shopping for Christmas 2020 report, carried out by the Centre for Retail Research (CRR), shows that despite lockdown 2.0, UK consumers are set to spend a total of £7.504bn over the Black Friday weekend – a 12.4% drop on 2019 due to store closures. 

Despite the decline, online sales are forecast to increase almost £2bn across Black Friday weekend, with total online sales rising 52.9% from £3.771bn (2019) to £5.764bn this year. 

Online spending is predicted to peak on Black Friday itself when £1.34m will be spent every minute. Offline spending will hit its highest amount at £0.96m every minute on Cyber Monday, resulting in a total of 1.740bn.  

 

Online vs offline spending (currency values are in Sterling millions) 

Online/offline 

2019 results 

2020 forecast 

 % Change 

 

Friday 

Sat/ Sun 

Monday 

2019 totals 

Friday 

Sat/ Sun 

Monday 

2020 totals 

2019-20 change 

Online 

£1,141 

£1,105 

£1,525 

£3,771 

£1,925 

£1,928 

£1,911 

£5,764 

52.9% 

Offline 

£1,386 

£1,895 

£1,514 

£4,795 

£458 

£678 

£604 

£1,740 

-63.7% 

Total 

£2,527 

£3,000 

£3,039 

£8,566 

£2,383 

£2,606 

£2,515 

£7,504 

-12.4% 

 

Prior to lockdown 2.0, the report found that over a third (37.3%) of UK respondents said they would not shop in-store during Black Friday promotions. This suggests that physical stores would have still seen a shortfall in sales due to lack of consumer confidence regardless of lockdown measures.  

However, due to the imposed restrictions in the UK, the research anticipates that offline sales over Black Friday weekend will fall by a staggering 63.7% compared to 2019, from £4.795bn to £1.740bn.  

London is expected to lead the charge with online sales and will also have the biggest share of total spend (£1.312bn) within the UK across the weekend. If areas in Scotland remain out of tier four lockdown by the end of November, Scots are set to spend the most offline, totalling to £362.1m. 

 

Regional Black Friday weekend spending in 2020 breakdown (currency values are in Sterling millions) 

Region 

Offline 

Online 

Totals 

London 

£196.50  

£1,115.20  

£1,311.70  

South East 

£191.00  

£946.90  

£1,137.90  

East of England 

£122.70  

£587.10  

£709.80  

North West 

£131.60  

£571.20  

£702.80  

Scotland 

£362.10  

£334.70  

£696.80  

South West 

£106.40  

£499.30  

£605.70  

West Midlands 

£103.70  

£458.60  

£562.30  

Yorkshire & Humberside 

£94.90  

£412.50  

£507.40  

East Midlands 

£86.00  

£374.40  

£460.40  

Wales 

£187.70  

£168.80  

£356.50  

North East 

£45.50  

£192.60  

£238.10  

Northern Ireland 

£111.80  

£102.80  

£214.60  

Totals 

£1,739.9 

£5,764.1 

£7,504.0 

While the weekend itself will be popular among shoppers, most retailers will continue their sales within the ‘Black Friday fortnight’.2 During this time, sales are expected to hit a total of £23.090bn. Online total spend is forecast to more than double offline sales £15.480bn and £7.610bn respectively.  

Anita Naik, Lifestyle Editor at VoucherCodes.co.uk, commented: “The new lockdown measures have certainly shaken the bricks-and-mortar retail sector for a second time this year, and Black Friday will no doubt be a huge missed opportunity for many stores across the UK. 

“However, as we know, over the past few years there has been a rapid shift to online shopping and this Black Friday weekend there will be plenty of deals to be found online despite lockdown 2.0. This year we expect to see sales soar across the online retail sector, and this will continue to grow in the run up to Christmas too.  

“With so many discounts over the Black Friday weekend, it can be hard to know if you’re definitely getting the best deal for your money. There are tools which can help such as setting up alerts for things you want to buy or using DealFinder by VoucherCodes. The clever browser extension does all the hard work for you and ensures you never miss a deal again.” 

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ArticlesMarketsTransactional and Investment Banking

Should Investors Stay Underweight Europe? Three Reasons Why It’s Time to Reconsider That View Now

digital europe

Should Investors Stay Underweight Europe? Three Reasons Why It’s Time to Reconsider That View Now

After a decade encompassing Brexit and the euro crisis, and amid disappointing returns relative to other markets, many investors have written off European equities, but River and Mercantile’s James Sym believes that stance now needs to change.

Investors underweighting European equities now run the risk of missing the recovery in the region, according to Sym, manager of the recently launched ES R&M European Fund, with the continent offering attractive valuations, a leading position in up and coming sectors, and political unity.

Europe’s major equity indices have lagged the US and other regions so far this year, with the double-digit gains seen in some US markets far ahead of country-specific and broad indices on the continent.

However Sym, who joined River and Mercantile this year, says this disparity has created a glaring opportunity for investors.

“European equities have been unloved and under-owned since last year, with August the first month that investors started to return to the asset class[1],” he says. “Turning points are often the best moments for relative returns – but it is critical to position ahead of that.”

Below, Sym outlines three factors as to why investors should be reconsidering their European exposure now.

 

1. A better crisis

The time to own European assets is when the region is making top down political progress towards convergence. That was true with the establishment of the euro in the cycle from 2002, it was true post “do whatever it takes”, and it is true today.

In some ways Europe needs a crisis to spur it into action. For years it has been obvious that for the euro to be sustainable there needs to be balance sheet mutualisation across Europe and fiscal transfers. The coronavirus crisis has finally catalysed this move, which should serve to bring the cost of capital down for unloved companies across the continent.

Under the recovery fund plans, the European Commission is likely to become one of the biggest AAA-rated bond issuers in the world. The initial issue was 14 times oversubscribed[2]. This gives the periphery access to capital markets under the same terms as Germany or the Netherlands. Additionally, the net effect of the grant element of the structure is that German taxpayers are paying for peripheral infrastructure investment. This should bring down the risk premium for the region and be good for growth.

 

2. Leading position in ESG

“In a post-Covid environment, the world is coming Europe’s way. Simply put, European stakeholder capitalism was never the ideal light-touch regulatory environment which big tech needed to thrive. This has been a big drag for equity returns as the FANG phenomenon drove US equity returns. However, pre-eminent themes for the next cycle, such as energy transition, are areas in which Europe excels and it has companies well placed to deliver this. Meanwhile, the regulatory noose is starting to circle some of the large US technology companies. At the very least it should be, or become, a more level playing field.

 

3. Unloved stocks

“With outflows for most of the last year, many investors find themselves underweight the region now, while index levels remain far below their highs – unlike other regions, such as the US.

“Year-to-date, the MSCI Europe index is down 14%, while the MSCI World is up 3%[3]. There is a relative valuation opportunity, and it looks even more attractive if you drill down further.

“The landscape in Europe is one that is full of growth funds which are (clearly) full of growth stocks which have outperformed. But if you look elsewhere, there are some really attractive opportunities that offer investors a great chance to take part in an economic recovery post the Covid disruption.

“While interest rates stay low, government spending stays high. We now see the mechanism for populism to ultimately lead to inflationary outcomes which if it transpires would set up a potentially difficult market for many clients.” 

 

[1] According to Calastone research, as quoted by Investment Week

https://www.investmentweek.co.uk/news/4019853/uk-equity-fund-outflows-hit-record-gbp-2bn-june-august-deal-jitters

[2] https://ec.europa.eu/commission/presscorner/detail/en/IP_20_1954

[3] According to Bloomberg data, to 22nd October

stocks
MarketsStock Markets

7 Things People Get Terribly Wrong About Stocks and the Stock Market

stocks

7 Things People Get Terribly Wrong About Stocks and the Stock Market

To the perfect layman, stocks can seem intimidating. The market is so diverse, and financial news can seem like they’re in a completely different language. This also leads to people making their own misinformed opinions about the market. The sad part is that these beliefs are often fueled by a bias people have about business in general.

Some think it’s a scam. Others think that it’s impossible to make steady earnings, or that only big players do so. On the other end of the spectrum, you have those who look at historic figures for the Dow Jones and think that you can’t lose with the stock market and others that think that they can just listen to the news and make trades based on announcements and events. Both of these are wrong and being overly optimistic is just as bad as being overly skeptical. Let’s take a look at some of the things people get wrong about stocks and the stock market.

 

You can Never Lose with Stocks

This is probably one of the strangest myths about stocks. Some people think that they can just hold some stock and that it’ll always bounce back. These people think that selling is an automatic loss and that stocks are meant to be held forever.

What they don’t realize is that they may be losing money in more than one way when doing this. First, they may end up with stocks that are not bouncing back or becoming almost useless due to disruption in the industry or market conditions. But there’s another area where they may be losing and not realizing it.

Let’s say that you invest $2,000 on stock “A” while failing to invest in stock “B”. If the first stock goes from $20 to $15 you might want to hold on to it until it bounces back. And maybe it does and hovers at around the $22 mark. You’re feeling pretty good about yourself.

But what if I told you that stock “B” went from $15 to $30 during that same period? This is indeed a loss, and it’s referred to as an opportunity cost. This is the amount of money you’re losing for having your money tied up in stagnant or underperforming assets while being unable to capitalize on winners. This is why you need to be somewhat fluid and forget the notion that all stocks always bounce back. We have plenty of historical evidence to back that up also.

 

It’s Easy to Tell Winners and Losers Apart

One of the biggest myths about stock market investing is that you can easily tell a winning and losing company apart. But that’s simply not true. Two companies might look completely the same, even issue the same type of press releases, and have similar market valuations. But you can’t try to just judge market sentiment based on price movements. You have to dig deeper.

It is often when an industry is going through a rough period that you will truly be able to separate the two. You can expect to see consolidation, and this is when you might find out that a company is running low on reserves, or that it has really bad debt. This is the type of stuff you’ll need to start worrying about if you’re intending to play the long game. This will also help traders in addition to understanding chart patterns and using technical indicators to understand the truth behind those price fluctuations.

You have to come with the mindset that it’s hard to tell winners from losers. This will push you to do more research and not go based on a false sense of confidence thinking you’ve identified a pattern after seeing a sudden uptick in price.

 

You can Only Make Money when Stocks go Up

This is another myth, and people are often surprised when they learn that you can actually bet against a stock and still make money. This is called selling short, and one of the most important tactics you’ll need to learn when trading.

Selling short is when you agree to borrow stocks from a broker in the expectation that it will be lower at a later time. Let’s say that you decide to sell a few shares of Johnson & Johnson short. You agree to borrow 100 shares at $145. That’s a $14,500 investment. The stock then falls to around $130 3 weeks later. You then can pay back the 100 shares which now cost you $13,000. This means that you made a $1,500 profit minus commission.

While this can be a very powerful strategy, you also have to know that it can go both ways. What this means is that you could end up owing more money if the stock goes in the other direction. What this also means is that the stock market isn’t strictly about “buying low and selling high” as they say. You can make money in any direction the stock market is going.

 

Getting Started is Difficult and Demands a Lot of Money

A lot of people also have the idea that you can only invest in the stock exchange if you have tens of thousands of dollars, but it’s not entirely true. As a matter of fact, it’s possible to start with as little as $500 to $1,000, though some advocate that you start with at least $2,000.

It really depends on what sort of trading you were thinking of doing. If you fell in love with the idea of day trading, then you might be surprised to find out that you need to have at least $25,000 at all times in your account if you intend to do more than 4 trades per day over a 5 day period. However, there’s nothing that stops you from starting with a minimal investment if you intend to buy stocks and hold.

Getting started is also not as difficult as you think. It might seem daunting at first, but once you get a hold of the basics, you realize that the stock market is much simpler than you may think. If you want to get a solid foundation on how to buy stocks, we strongly recommend you check out WealthSimple. They have a piece where they run down how to pick a broker and trading platform and a few strategic tips as well. You’ll learn what you need to look at in a stock when to invest, and a few basic stock market terms.

 

You Gotta Go with Blue Chips

There is also this group that believes that blue chips are the only way to go. We’re not saying you should not invest in them. As a matter, they can be great.

They can be a good source of passive income through dividends, tend to hold their value during tough times, and are great stores of value. However, when market conditions bounce back, these stocks stay right in the middle.

While you want to always have a few blue chips in your portfolio, you also have to invest in stocks that have growth potential. Again, this is where you need to think about opportunity cost. By having all your capital on blue chips, you are missing opportunities on fast-growing stock when you could easily hedge your bets by diversifying.

 

You Should Hold You Money During a Crash

This is somewhat related to the point we made earlier about stocks making money in any direction. The worst times for traders are times of stability, believe or not.

A stock market that has a lot of movement in any direction is what they actually look for. This is where the real opportunities are, whether the market is going up or down. That’s why you have to always pay caution to the wind and not be afraid of major financial downturns. This doesn’t mean that money is lost, it is only changing hands.

This also means that you can also start looking at sectors and stocks that are moving in the other direction. Financial crashes are usually the manifestation of a much deeper problem, and that’s when you need to start looking at who’s providing the solutions.

 

Risky Stocks are Automatically Bad Stocks

It really depends on your strategy again. If your goal is to hold for the long term, then maybe you want to go with safe stocks with moderate potential for growth and loss. This also means that you’ll get moderate returns if any. Some people might prefer to invest based on value, while others prefer to bet on short term movement. Both are very valid strategies and might suit a different type of investor.

With risky stocks, there is so much potential. Yes, you could lose, but there are always ways to mitigate it. The greatest risk comes with greater rewards, so instead of focusing on whether a certain stock is too risky, look at short term price movement armed with the right knowledge and tools to make informed and calculated bets.

These are just some of the things people get wrong about stocks in general. Once you dispel those myths, you can start truly understanding what the stock market is all about and form a realistic idea of it.

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ArticlesMarkets

How Much Is the Online Food Industry Worth?

deliveroo

How Much Is the Online Food Industry Worth?

If you’ve ordered your groceries or takeout online this year, you’ve contributed to the massive wealth of the online food industry. Currently, the global online market is worth $111.32 billion, and the industry is only growing. Food delivery services are expanding, and more grocery stores offer online ordering now than ever before. From caviar to beer, you can satisfy even the wildest cravings with the touch of a button. 

What exactly led to this surge in net worth, and how will the events of 2020 affect the industry in the coming years?

 

A Brief History

Food delivery is nothing new. The first pizza delivery occurred way back in 1889 in Naples, Italy. Then, in World War II, chefs and volunteers delivered meals to citizens seeking cover from bomb threats. In the 1950s, soldiers returning from war popularized pizza delivery in the States and, 10 years later, food trucks entered the scene. 

However, online ordering didn’t make its debut until the early 2000s when GrubHub and major pizza chains began creating mobile applications. By 2015, online ordering began to overtake mobile ordering and, two years later, DoorDash university startups began implementing robot delivery. Meal kit delivery services like Blue Apron also launched during this time. 

 

A Growing Industry 

Since then, online ordering has become commonplace. Now, amid a global pandemic, food delivery is enjoying a major moment in the spotlight. 

To avoid the grocery store — and the subsequent risk of contracting the coronavirus — millions of people are ordering their groceries online. During March, 31% of U.S. households used online grocery ordering, with 10.3 million of them using this service for the first time. Thus, this relatively new form of online ordering is becoming a major contributor to the wealth of the online food industry. 

Digital foodservice orders are also experiencing a boom as many restaurants had to close their doors to dine-in customers during the pandemic. In May, these online orders increased by 138%, and now, new users represent nearly half of third-party food delivery apps. Of course, the global economic slowdown has slowed the overall growth rate of the online food industry. However, it will likely experience a major rebound next year. 

 

The Future of Online Food

According to surveys, 43% of individuals using online grocery services are very likely to continue doing so. Moreover, 30% of households who didn’t use these services in March would likely try it over the next few months. Likewise, experts expect those who tried online food delivery during the pandemic to continue using mobile applications and online ordering even after restaurants re-open. 

Still, more than 50% of Americans are cooking at home more than they were before the pandemic. Thus, restaurants will have to continue diversifying their services to offer DIY meal kits and experimental food bundles if they want to attract these newfound chefs. If more businesses rise to the challenge, the online food industry will likely expand and exceed even the most optimistic future predictions.

gold
ArticlesMarkets

Why Gold Prices Have Been Hitting Record Highs

gold

Why Gold Prices Have Been Hitting Record Highs

Gold prices continue to rally this month as the coronavirus pandemic of 2020 continues. The precious metal closed at a little above $2,000 (£1523.05) on August 5th — a record high in the history of gold. Its earlier record peak was in 2011, a few years into the global financial crisis, when investors pushed the price of gold past the $1,900 (£1446.90) threshold.

Analysts have noted that the price of gold in recent months has been on a steady upward trend. However, during the initial stages of the pandemic, market prices rose and fell erratically. A report on gold prices by FXCM in March of this year stated that the bullion, which includes gold, performed poorly due to mass capitulation. Investors liquidated their assets out of panic as outbreaks occurred left and right. This caused the price of gold to fluctuate.

Almost two quarters into the pandemic, however, and the price of the metal continues to increase. That said, SYZ Private Banking’s Luc Filip recently pointed out that investors need to understand each asset’s characteristics in order to position themselves for recovery. And so with that in mind, here are the main explanations behind the escalation of gold prices:

 

Gold is a safe haven

Compared to other financial markets and instruments, gold is considered a safe haven in times of economic turmoil. This is due to the fundamental value of the metal, independent of other factors like economic stability. Gold is still gold — and valuable — on its own.

When a financial crisis happens, the value of assets such as stock, real estate, and currency drops. Investors tend to flock to gold given that it has historically retained most of its value during economic instability. The recession that today’s pandemic has caused is no different. And as cases continue to rise globally with no available cure or vaccine, the prevailing investment speculation is that gold will be the least risky investment option for the foreseeable future.

 

The dollar is weakening

The price of gold generally has an inverse relationship with the value of the dollar. As of this writing, NBC News reports that there are over 4.8 million COVID-19 cases in the US, and this number continues to rise across the country.

The inefficient containment of the coronavirus is one of the reasons the US has entered a recession. Though it initially rose, the dollar has dipped in value over the last few months. A weaker dollar means more gold can be purchased by investors pushing the demand — and its price — higher.

 

Investor interest is rising

Given those reasons, investor sentiment towards the metal has been positive. It is also receiving wide media coverage due to the record highs the price of gold has been hitting and surpassing. More analyses and reports on gold naturally increase interest among investors.

As the pandemic continues, Goldman Sachs predicts that gold prices will rally and pass the $2,300 (£1751.51) mark per troy ounce. This is due to the ongoing economic and political instability in the US, as well as the global public health crisis that hit the country particularly hard. Though the situation is alarming, these are considered favourable conditions for gold and thus, might make it a worthwhile investment.

whisky
ArticlesMarketsTransactional and Investment Banking

Why Whisky is the Safest Investment to Make Right Now

whisky

Why Whisky is the Safest Investment to Make Right Now

Whisky Investment company Braeburn confirm why investing in whisky during economic uncertainty is a lucrative and sustainable asset for any portfolio.

Throughout history, whisky has proven a reliable investment even in time’s of economic decline. Whisky proved a popular choice during the Great Depression, and recent market behaviour would suggest that ‘liquid gold’ will continue to have significant financial gain despite the current climate.

“Societal turbulence is often a time when investors take stock of their portfolio and examine new ways in which they can protect and profit from their savings, this global pandemic is no different.” states Braeburn’s Sales Director, Samuel Gordon.

Whisky investment has been rising in popularity over the last decade, by 582%, according to The Knight Frank 2020 Wealth Report. This report also shows sales of scotch to India, China and Singapore rising by 44% in the first half of 2018 alone. However, in actuality, it’s whisky casks specifically, that offer the security and consistency that evade traditional asset classes.

With the surge in demand for single malts, distilleries are struggling to keep up. The process for crafting quality spirits that enthusiasts desire, happens over lengthy periods of time. Distilleries ultimately can only make and store so much resulting in a continually increasing value. As a result, independent bottlers, blenders and other investors are known to pay highly and quickly in current secondary markets.

While economic uncertainty can bring new levels of volatility to traditional financial markets like stocks, shares and housing. Samuel explains that whisky doesn’t follow these market trends and isn’t impacted by the reactive and turbulent swings of traditional investments.

“Instead of decreasing during periods of economic downturn, historically, whisky casks have increased in value. When whisky remains in its cask, its continuing is maturation process. Over years, the whisky interacts with the cask, taking on beautiful and unique flavours from the wood. Although in time, there is a golden moment to bottle whisky, in general, the longer it’s left the more distinguished and deep the flavour becomes along with the ability to demand a higher resale value.”

Unlike other industries that are impacted by developing technology and evolving consumer behaviour, the whisky industry is prized on its heritage and historical methods. Whisky has maintained consistency through every type of economy and returns are still on the rise.

Over the last five years, casks have earned an average of 12.4% per annum. The average cask doubles in value every 5 years with casks from popular distilleries earning even higher returns. This again, is due to the maturation process which allows whisky to ride through difficult times whilst still increasing in value. Instead of the cask values rising and falling violently with political and economic changes like the traditional stock market, whisky is left to mature in the cask, only to appreciate in value.

Whisky casks offer diversification into tangible assets allowing investors to enhance their portfolio across different asset classes. Traditional ‘paper’ investments puts future success solely in an endeavour outside the investors control. With whisky casks, no matter what happens in the economy, the whisky can always be bottled and sold, even if the market is down or a distillery closes. With an asset grounded in intrinsic value, an investor can safeguard wealth.

An important factor in whisky cask investment is that is offers further security against forgery or fakes. Unlike art, antiques and even bottled whisky, whisky casks mitigate this risk because the Scottish Government requires that they are stored under strict oversight.

Casks are stored in government bonded warehouses that are required to keep meticulous records. Because of this careful and impartial monitoring, investors can be confident in the provenance and value of their casks.

Samuel concludes,

“Whisky casks are a unique investment. They offer unique characteristics and can complement a portfolio in good times or bad. With a real, intrinsic value whisky casks are unlike any other tangible asset. And with the demand for authentic, mature single-malt casks on the rise, they’re more lucrative than ever.”

financial markets
ArticlesCapital Markets (stocks and bonds)MarketsNatural Catastrophe

Markets Have More Upside Potential Despite Second Wave Fears

financial markets

Markets have more upside potential despite second wave fears

By Luc Filip, head of private banking investments at SYZ Private Banking

While fears of a second wave of coronavirus bring renewed volatility to Europe and the US, investors are looking East for reassurance. China, which entered the pandemic three months ahead of the rest of the world – and now boasts positive economic growth – offers a useful template for the trajectory of the rest of the developed world. 

As witnessed in China, we expect a significant pickup in activity from Europe and the US now that social distancing measures are relaxed. The downward trend has finally slowed in these areas and economic indicators have risen above April lows, marking a positive first step in this direction. This was, and will likely continue to be, led by activity in the service and consumption sectors, as social distancing measures are lifted further and people learn to live in the new post-Covid environment. 

We anticipate the recovery will be faster than consensus expects, with the real possibility most economic activity could return close to pre-crisis levels by the beginning of next year. In fact, we believe the unprecedented amount of fiscal and monetary policy stimulus might fuel a temporary overshoot of economic growth in 2021 – before falling back toward more subdued long-term trends. 

Despite the very real risk of a second wave, of which we are already seeing signs, we do not believe this will result in another full- blown lockdown in developed countries. Instead, we would likely see more targeted measures, which would not derail economic recovery. Nevertheless, the recovery will remain concentrated in developed countries following in China’s footsteps, while the rest of the developing world – countries mostly dependent on manufacturing and commodity export – are likely to experience a far less robust recovery. 

 

Positioning for recovery

Before these positive developments are fully priced in by markets, now is still the time to increase risk exposure. But with ultra-low bond yields and sky-high equity valuations, many investors do not know where to turn. The key is to consider every aspect of an asset’s characteristics, including its merits compared to the available alternatives, as there is always relative value to be found.

Equity valuations, which regained pre-crisis highs in some sectors, may appear expensive given the current economic situation. However, it is necessary to go beyond purely intra-equity market metrics and consider equity valuations within the current rate environment. Taking into account the excess return currently offered by stocks over cash and bonds, equities are not expensive at all. In the US, this equity risk premium is close to a historic high. Therefore, combining both internal equity metrics and risk premia, we still see value in equities. 

 

Covering all bases 

Nevertheless, our confidence in the economic recovery does not discount the high probability of volatility in the markets – due to downside risks such as the speed of the recovery, the geopolitical situation, the likelihood of a second wave and a second lockdown. 

Therefore, diversification is crucial – across asset classes, regions and sectors. In the eventuality of a negative surprise, our exposure to gold, long treasuries and hedging equity strategies will protect the portfolio. Meanwhile, we increased our exposure to US and European equities in May through passive instruments to obtain wide-ranging coverage across all sectors. We also took advantage of the recent lower volatility to purchase additional portfolio protections as they became cheaper. 

Another key to managing downside risk is to focus on quality. We prefer holding proven quality assets which are continuing to perform well – even if they are more ‘expensive’. On the equities side, this means stocks with strong balance sheets, cashflow and brand, which are well positioned for the new normal of digitalisation – such as Google, Mastercard and L’Oréal. On the credit side, we reduced our exposure to high yield, as we anticipate a painful recovery for many companies, and reinvested the money into investment grade corporates – which are supported by the Federal Reserve’s purchasing programme. 

Generating performance while managing risk requires a flexible active approach to asset allocation. Through the crisis, our preference for quality, rigorous diversification and tactical protection have enabled our portfolio to participate in the market recovery, while mitigating downside risk. 

ftse 100
ArticlesMarkets

New Tool Shows The FTSE 100 Is Recovering Slower Than Other Global Markets

ftse 100

New Tool Shows The FTSE 100 Is Recovering Slower Than Other Global Markets

The Coronavirus lockdown decimated economies all over the planet, but while some stock markets are showing signs of recovery, the UK’s FTSE 100 is taking longer to bounce back.

Since falling to its lowest point in March, the FTSE 100 has climbed by 23%, which seems impressive, until you compare it with other global indices. Both the Nasdaq and Dax have risen by over 50%, while other key markets, such as China’s CSI 300, have also significantly outperformed the FTSE since the pandemic hit.

Chris Beauchamp, chief market analyst at IG Markets, Europe’s largest online derivatives trading provider, believes the FTSE 100 is “an index that has become a victim of its own composition”. Financials currently represent its biggest sector and Beauchamp says “a huge chunk of the index in terms of weighting is really underperforming”. 

He adds that the recent resurgence in sterling has also hit the FTSE, as its firms have lost value overseas.

For traders looking to keep track of the global indices and their relative rates of recovery, Daily FX has launched an innovative new tool that provides an instant snapshot of international market performance. 

Market Health allows traders to get a complete picture of global markets and indices in a single place. The free tool provides an instant picture of global market performance, currency strength and exchange opening and closing times. 

Using data from Quandl, Market Health allows users to take a macro look at global markets and indices including the Dow Jones, S&P 500, FTSE 100 and DAX 30 to help formulate and deliver on trading strategies.

Split between three main viewpoints, users can easily switch between world overview, stock exchange open times and index performance.

world overview

The global view combines exchange opening times and currency performance, presented on a world map. The map, displayed as a heat map, shows currency strength against a base currency of your choice.

The stock exchange opening times showcase eight global stock exchange markets with details of exactly when they open and close, how long they’re open for and whether or not they’re closed for any public holidays. 

The performance section groups major market indices into geographical groups and is a quick way to get a picture of whether a geographical market is up or down. Users can also filter by developed or emerging markets.

opening times
exchange performance

Peter Hanks, Analyst at DailyFX, explains how the tool is useful for experienced traders like himself: “It is useful to use the tool on specific days when trying to discern which market or region was most impacted by an event. For example, if the Federal Reserve has an interest rate decision, since the central bank typically has the most influence over the American markets, we would expect to see the most activity in those regions. If, on the other hand, another region has outpaced the US markets, there may be another theme at play that is driving market activity, so the tool is great at providing a bird’s eye view of the market.”

He goes on to explain how the tool is also useful for new traders: “When starting off on your trading journey, understanding the impact of other market sessions is very important. Volatility in one region can easily carry over into another, so being aware of when regions are active or inactive is very useful as the crossover periods are often flush with liquidity and can set the tone for an entire session.”

He explains how the tool is useful in the current situation: “Having an instant view of global market health is particularly useful for fast-moving world events such as today’s pandemic. The Market Health tool will be useful to many for getting a quick snapshot of what Covid-19 is doing to the world’s economies and how the different markets are reacting as we are all in different stages of the health crisis.”

David Iusow, Market Analyst at DailyFX, said: “Before a day begins, a trader needs to know how markets around the world have performed in other time zones. It is the first overview that one can get of the general market conditions and from which one can deduce the start of trading on the domestic stock exchange. Similarly, a market status map facilitates the identification of relative outperformance of markets during regular trading hours. The DailyFX market status has the advantage of a clear and interactive structure, giving traders exactly the benefits, they need to start a day.”

To use the Market Health tool click here: https://www.dailyfx.com/research/market-status

banksy brexit
Capital Markets (stocks and bonds)Markets

What is the Post-Brexit Outlook for Sterling?

banksy brexit

What is the Post-Brexit Outlook for Sterling?

As we head through the agreed Brexit transition period, many questions remain. One of these uncertainties is that there’s no definitive answer whether by 2nd January 2021, a deal will be in place. One of the key areas of concern is what effect Brexit will have on the standing of sterling as, inevitably, the currency will be affected.

It seems like far more than four years ago now that the UK made the momentous, and unexpected, decision that it no longer wanted to be part of the EU. Since then, a great deal of metaphorical water has passed under the bridge and it was only Boris Johnson’s bold election move last December that finally achieved the Tory majority needed to pass the legislation.

But, as we head through the agreed transition period, many questions remain. One thing that is for certain is that there will be no extension to this beyond 1st January 2021. However there is no definitive answer yet on what the arrangements will be concerning the UK’s dealings with the EU after then. It’s equally uncertain whether, by 2nd January, a deal will be in place, and some observers believe that a no-deal Brexit is becoming a real possibility.

One of the key areas of concern is what effect Brexit will have on the standing of sterling as, inevitably, the currency will be affected.

Volatility is key

Perhaps the early signs weren’t good, as its value on the currency markets immediately plunged by around 10% on the announcement back in June 2016 that the country was set to go it alone. Since then, the trend seems to have been that its value has rallied whenever rumours of a softer, more negotiated split with the EU have been circulating. For example, back in October 2019 when it was believed, incorrectly as it turned out, that the transition period might be extended, the value of the currency rallied strongly on the world markets.

But, each time there is a feeling that the future is a little more uncertain, sterling’s essential volatility comes to the fore, once again causing considerable turbulence in the currency exchanges.

Good news for some…

Of course, this isn’t necessarily bad news for everyone – with people who derive some benefits from forex trading being a case in point. Through making the right decisions, and operating using a recommended forex broker, traders stand to benefit from significant changes in relative values between paired currencies. For those in this category, choosing an effective broker is a relatively simple process as in-depth reviews of said brokers abound.

… but not for others
Cargo Ship, By Szeke

Volatility in the value of sterling is, unsurprisingly, not such good news for many other sectors of the UK economy. A prime example is the country’s manufacturing industry, especially in the case of firms that rely on importing components and materials from abroad. At a stroke, they can find themselves having to pay more to continue operating – a cost that they are generally likely to pass straight on to the consumer.

Incidentally, this is not the only impact that Brexit is predicted to have on UK industry. There is a very real fear that it will limit the amount of investment available for research and development which could well have a far wider knock-on effect.

Because the value of sterling has always been so closely linked with confidence in the economy as a whole, the consequences of a country hamstrung in its efforts to develop and innovate could also make themselves apparent.

Looking on the bright side

But we should perhaps be wary of falling into the trap of becoming too pessimistic and gloomy about the prospects for sterling in a post-Brexit world. Deal or no-deal, the UK will definitely be able to open up new trade deals with the rest of the world once the restrictions imposed by EU membership have been lifted. Depending on the nature of those deals, this could mean sterling receives a real shot in the arm and that, now more than ever, will be what everyone should be hoping for.

value stocks
ArticlesFinanceMarkets

These 5 stocks prove that value investing isn’t dead

Investors who ignore so-called “value stocks” are at risk of missing out on good long-term gains, RWC Partner’s Ian Lance warns.

While the valuation gap between growth and value stocks has been exceptionally wide for some time, that gap will not grow continuously, Lance believes.

In fact, Lance believes some of the most interesting investment opportunities throughout the coronavirus have been value stocks.

Some of them, he explains, have highly profitable subsidiaries that are actually worth more than the entire group, meaning you get, in essence, two investments for the price of one.

Lance says: “Some of our most successful investments have been ones in which sentiment towards a company becomes so negative, that the valuation ends up making no sense versus the worth of its various parts.

“Valuations have become very irrational and have reached the point where they are excessively punished for a temporary earnings decline. Therefore, we believe that the current market throws up the opportunity to buy great companies with long-term returns and earning potential.”

Below, Lance sets out five unloved companies that he thinks have decent long-term potential or that have highly-profitable subsidiaries that make them worth investing in.

Royal Mail

RMG owns a European parcels business, GLS, which makes a 6-7% margin in a normal market environment and which has grown at mid to high single digit (benefitting from structural growth of online retail). In 2019, GLS made an operating profit of £180m and is therefore worth c.£2b if we put it on a multiple of 11x. The current market cap of the entire group is £1.7b and therefore the UK business is not just in for free but actually valued at around £300m.

BT

BT’s Openreach division generates £2.6b of Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) which we have valued at £22b. This represents a multiple of just over 8x historic EBITDA which compares favourably with other utilities and therefore ought to be achievable. The enterprise value[1] of the entire group is currently £31b meaning that all the other businesses are being valued at £9b, which is only 3x their historic cash EBIT of £2.8b. Rumours surfaced in the a recent Financial Times piece that BT might be about to monetise a stake in Openreach.

Marks and Spencer

Marks and Spencer have a food retail business which makes £237m of Earnings Before Interest and Tax. If we value this at 12x historical EBIT, add their £750m investment Ocado at cost (less the future performance payments), take away net debt and give no benefit for the company’s freehold property, the total is around £2.0b, which is in line with today’s market cap. The entire clothing and home business, which is still the largest clothes retailer in the UK and which last year made a profit of £224m, is therefore in for free.

ITV

ITV is, in effect two business; broadcasting which is very reliant on advertising revenue and content production. In 2019, the content production business made EBIT of £267m and we might value this at around £3.5b (13x EBIT). The enterprise value of the entire group is £3.8b meaning that the broadcast business which last year made c.£500m of EBIT is being valued at around £300m in the stock market. Another way to think about this is that companies like Netflix spend around $15b a year on content production; for a fraction of this, they could have ITV’s entire back catalogue and all future content.

Capita

Capita has a software business which made just over £100m of EBIT in 2019. As these businesses are high margin (28% in this case) they tend to be valued quite highly. Using a multiple of 15x(which would be the low end of their peers) would value this division at £1.5b which is not far short of the enterprise value of the entire group of less than £2b. The rest of the businesses, which in 2019 made around £200m are thus only being valued at around 2x EBIT.

Each of these companies has a strong franchise within them that is being undervalued by a market that is fixated on short-term earnings momentum and hence creating some genuine bargains in the market today.

UK reduces its oil imports by over 75 million barrels in five years
Foreign Direct InvestmentMarkets

UK reduces its oil imports by over 75 million barrels in five years

UK reduces its oil imports by over 75 million barrels in five years
  • New tool charts global commodity trading over the last decade
  • China has overtaken the USA as the world’s biggest importer of oil
  • The UK is the 8th best European country at reducing its oil imports

The UK has reduced its oil imports by more than a fifth (21%) in five years, a new online tool from Daily FX has revealed.

While the country remains the 12th biggest global importer of oil, including petroleum oils, it has taken great strides towards reducing its reliance on such environmentally-harmful fuels.

Between 2013 and 2018, the UK had the eighth-best rate in Europe for reducing such imports, with its intake dropping by 76.9 million barrels (from 359 million to just over 280 million).

Malta (93%) and the Republic of Moldova (92%) experienced the most significant decreases across the continent.

The data has been visualised on a
new interactive tool built by Daily FX, the leading portal for forex trading news, which displays global commodity imports and exports over the last decade.

The tool shows that China has recently overtaken the USA as the world’s biggest importer of oil. The Asian giant imported nearly 3.4 billion barrels in 2018, which was over 240 million more than the USA. China tops the list having increased its oil imports by 64% since 2013 – nearly six times the rate of its rival (11%).

The top 10 global importers of oil (2018) are:

  1. China – 3.38 billion barrels
  2. USA – 3.14 billion barrels
  3. India – 1.65 billion barrels
  4. Japan – 1.09 billion barrels
  5. The Republic of Korea – 1.09 billion barrels
  6. Germany – 622 million barrels
  7. Netherlands – 506 million barrels
  8. Italy – 460 million barrels
  9. France – 397 million barrels
  10. Singapore – 376 million barrels

Daily FX’s unique tool allows traders to spot developments in the flow of commodities and the growth of both supply and demand while comparing the changes to critical economic indicators.

One trend highlighted by the tool is the decreasing reliance on oil among African countries. Five of the world’s ten best nations at reducing oil imports are found on the continent, including the top four. Morocco, Kenya, Burundi and Gambia all decreased such imports by over 99%.

John Kicklighter, Chief Currency Strategist at Daily FX, said: “The world is changing and so is the way that it uses energy. Renewable and environmentally-friendly fuel options are the future, and while the end of crude oil is still far off, there will be considerable changes in the world’s top importers and exporters. Our new tool helps track those changes.

“While some of the larger countries have increased their appetite, it is interesting from an investor’s perspective to see the UK exploring alternative energy sources and reducing its dependence on oil.”

Global Commodities’ takes the form of a re-imagined 3D globe where the heights of countries rise and fall to show the import and export levels of a range of commodities over the last decade. The data visualisation allows users to switch views from a single commodity or market and show information relevant to that commodity or market’s performance.

To learn more about Global Commodities and view the tool, visit:
https://www.dailyfx.com/research/global-commodities

How COVID-19 is Impacting the Rental Market
MarketsReal Estate

How COVID-19 is Impacting the Rental Market

How COVID-19 is Impacting the Rental Market

TurboTenant, an
all-in-one, free property management tool, releases its latest industry report
– “How COVID-19 is Impacting the Rental Market.” This report
highlights key rental market indicators from March 2020 in cities throughout
the U.S. who have and are currently following social distancing and
stay-at-home orders.

You can read the report and how COVID-19 is Impacting the
Rental Market here.

TurboTenant’s new trend report analyzed 18 cities and four
key rental market indicators: total active listings, change in number of active
listings, total renter leads and the average number of renter leads per
property. While the full effects of the coronavirus on the housing market are
still unknown, delisting and new home listings steeply declined in March.
TurboTenant’s report found while some markets reflected those trends, others
had strong markets.

TurboTenant Highlights that New York, Denver and Houston all
experienced large net losses for new listings with New York holding the biggest
decrease at -65.17% while San Diego, Atlanta and Cleveland all experienced net
gains in listings. Lead growth in 14 of our cities, including Jersey City and
Denver, fluctuated throughout the month, but ended lower than they started. In
cities such as Boston, Houston and Milwaukee, leads were higher at the start of
April than at the beginning of March.

The reasoning for the report to be created is to give “insights
on how the rental market is starting to react to the COVID-19 pandemic,”
said Sarnen Steinbarth, TurboTenant Founder and Chief Executive Officer.
“With the peak rental season approaching, we want landlords to be prepared
and informed about the trends nationwide and in their own cities.”

“It is imperative to monitor rental trends during the
coronavirus pandemic,” Steinbarth said. “This report along with our
past and future trend reports, will help educate not only landlords, but also
property investors, businesses and the public.”

hsbc
ArticlesFundsStock Markets

How Clued Up Are You On The FTSE 100?

hsbc

How Clued Up Are You On The FTSE 100?

Brits incorrectly believe household favourites Tesco and Sainsburys are in the top 10 biggest companies of the FTSE 100, according to a new poll by IG Markets.

The trader polled 2,000 adults, alongside the launch of its Decade of Trade tool, to discover how clued up the general population are on the FTSE 100. The results show that as a nation we are fairly savvy when it comes to our knowledge of the stock market and over two-thirds (77%) are knowledgeable on the definition of shares.

Online trading platform, IG Markets, created the Decade of Trade tool to help Brits gain an understanding of the FTSE 100 and to allow traders to view not only how companies in the markets are performing now, but how they have performed over the last ten years. The tool covers twelve world markets including the FTSE 100, DAX40, ASX200 and HANG SENG.

When asked to name which companies are in the top ten of the FTSE 100 from a list, Brits identified eight out of ten businesses correctly. The mistakes came from thinking the supermarkets had a bigger presence than they do, with Brits believing Tesco (23rd in the FTSE 100) and Sainsburys (100th in the FTSE 100) to be in the top 10 market share.

 

Perceived top 10 of FTSE 100

Actual top 10 of FTSE 100

BP (+3)

HSBC

HSBC (-1)

Royal Dutch Shell A

GlaxoSmithKline (+4)

BP

Unilever (+6)

Royal Dutch Shell B

Tesco (+18)

AstraZeneca

British American Tobacco (+2)

Diageo

Royal Dutch Shell A (-4)

GlaxoSmithKline

Royal Dutch Shell B (-4)

British American Tobacco

Sainsbury (+91)

Rio Tinto

AstraZeneca (-5)

Unilever

 

Brits failed to identify beverage company, Diageo, whose brands include Smirnoff, Baileys and Guinness and mining corporation, Rio Tinto, as top 10 FTSE 100 companies.

Brits were also tested on their knowledge of the FTSE’s sector market share. The results showed there is a perception that Oil and Gas, Chemicals and Banks and Persona are the three largest sectors of the FTSE 100 when it is actually Oil and Gas, Banks and Persona and Household Goods.

Respondents were also asked what they perceive to have the biggest impact on the FTSE 100, and just over a quarter (27%) thought the Brexit referendum would have the biggest impact on the stock market.

 

Top five things Brits think have impacted the FTSE 100

  1. Interest rates (43%)
  2. Economic releases about earnings reports (35%)
  3. The Bank of England quarterly inflation report (27%)
  4. Brexit referendum (27%)
  5. Eurozone politics (26%)

 

Almost four in ten (39%) correctly thought all of the above factors have an impact on the FTSE 100.

To view the Decade of Trade tool, click here: https://www.ig.com/uk/special-reports/decade-of-trade

Biz Stone
BankingMarkets

Twitter Co-Founder Backs Uk Bitcoin Banking App

Biz Stone

Twitter Co-Founder Backs Uk Bitcoin Banking App

London-based fintech firm Mode, advised and backed by Twitter co-founder Biz Stone, has launched its Bitcoin banking mobile iOS app.  This will make Bitcoin – the world’s most popular digital asset which many refer to as ‘digital gold’ – accessible to everyone at the touch of a button.

The platform is available to users globally, except in the United States of America.

A Mode account can be opened in less than 60 seconds, with Know Your Customer (KYC) requirements completed in less than two minutes through AI-enabled identity verification technology. Once users are whitelisted, depositing GBP via bank transfer and buying Bitcoin takes seconds.

Mode’s launch is supported by new research (1) which reveals that many current and potential Bitcoin investors are unhappy with the platforms and services currently on offer.  Findings (2) also reveal the potential for strong Bitcoin market growth, as 42% of people who currently own Bitcoin plan to buy more, 51% of people surveyed indicated they may buy Bitcoin soon, and just a small fraction of respondents, around 7%, said they have no intention of currently buying the digital asset.

Through its new easy to use app, Mode aims to bring down the barriers and open up the Bitcoin market to everyone, not just tech-savvy or professional investors. As a result, users can get started with only £50, and unlike many other apps, Mode only charge a very competitive fee of 0.99% at the time of purchasing and selling Bitcoin. Mode doesn’t charge for transferring GBP in and out of users’ accounts, and funds are credit almost instantly via Faster Payments – a process that can take up to 5 days with some of the most renown crypto exchanges.

Users can buy Bitcoin with bank cards or via a bank transfer, which is then safeguarded through one of the world’s leading digital asset custodians, BitGo. 

In addition to its new app, Mode has also announced plans to launch a Bitcoin interest-generating product later this year, which would allow users to earn passive income on their Bitcoin holdings without having to touch their assets.  

Biz Stone, co-founder of Twitter, joined Mode as an advisor of the project. He has also invested in Mode and acts as a non-executive director of R8, Mode’s parent company.

Although there are multiple existing ways to access the Bitcoin market right now, few appeal to the everyday person, who wants to buy and hold some Bitcoin. Most of the current apps all have one problem at their core—access.” Biz Stone commented; “Mode has removed needlessly complex processes from their app, building a beautiful and responsive UI and UX rivalling that of the major challenger banks—while also launching a completely new and innovative Bitcoin product.”

 

Ariane Murphy, Head of Communications and Marketing, Mode, said: “Our new app not only enables us to capture the huge growth in the Bitcoin marketplace, but also tackles many of the issues people have with the current platforms and storage services available, which our research shows are significant. The Mode app addresses transaction restrictions issues, low speed/high cost, lack of security and most importantly, tackles the poor user experience typically associated with Bitcoin apps.”

“Until the beginning of this year, we pilot-tested our app with some 1,000 early subscribers and their feedback has been very positive.  This, coupled with the strong growth in the marketplace, means we are confident that now is the right time to launch to the wider pubic.”    

 

Challenges to tackle in the digital asset markets – new research

Mode recently conducted research (1) with people who already own digital assets, revealing that 41% of respondents described the process of transacting Bitcoin through existing solutions as average or poor, with just 13% describing the process as excellent. 

Some 37% say the level of security offered by the platforms they have used is again average or poor, with 41% claiming security is good and 21% excellent – signifying some room for improvement.

In terms of overall user experience, just 56% describe other digital asset services as good or excellent, with 32% saying it is average and 11% describing their experience as poor.

Mode is part of R8 Group, a UK fintech group which raised $5m in a heavily oversubscribed funding round in April 2019, backed by an experienced management team with extensive experience in the financial services and technology sectors. Prominent members of the R8 Group include serial entrepreneur Jonathan Rowland, and Twitter co-founder Biz Stone.

market
ArticlesMarkets

Top Five UK Money Transfer Markets Receive More Than £10bn

market

Top Five UK Money Transfer Markets Receive More Than £10bn

New analysis reveals the top five money transfer markets for UK residents that account for nearly one third of the total sent home.

New analysis by Paysend, the UK based fintech, reveals that just five markets account for nearly one third of the total money transferred home from the UK.

Paysend analysed the latest data from the World Bank.  It shows that foreign workers, international students and expats in the UK send money to more than 130 countries worldwide.

However, of the £24.2bn sent home in 2018, more than £10bn is sent to just five markets.  The top 10 markets account for more than half of the total, receiving £13bn in total.

Rank

Market 

Amount sent

1

India

£3.04bn

2

Nigeria

£2.97bn

3

France

£1.63bn

4

Pakistan

£1.44bn

5

China

£1.14bn

6

Poland

£1.13bn

7

Germany

£990m

8

Spain

£900m

9

Philippines

£591m

10

Kenya

£563m

Alberto Macciani, CMO of Paysend, said: “Moving money changes lives. We can see how a group of new internationalist workers, students and expats are driving the growth of money transfers in the UK. Often these transactions are life changing for those that send or receive them. Money transferred might go on education, healthcare, or to give families the ability to buy a home or start a business”. 

“Rather than simply acting as a ‘hand out’, research shows that money sent back home creates independence and sustainability, for the recipient and their communities and especially for women it represents a vital source of independence and equality.” 

Launched two years ago, Paysend’s card-to-card money transfer service, Global Transfers, already serves over 1.3m users worldwide.

The growth stems from the emergence of increasingly mobile segments of the work force and the continued growth of international students.  These are people who live and work in one country while financially providing for, or relying on, others in another country. 

Some 270m foreign workers will send $689bn back home this year, according to the World Bank. This figure is a landmark moment.  Global money transfers have overtaken foreign direct investment as the biggest inflow of foreign capital into emerging economies.

Alberto Macciani continued: “Global Transfers enables our customers to move money in an instant.  With fixed, transparent and low fees, more of our customers’ money is enjoyed by those they care about. We focus on making our key corridors more efficient, but at the same time we work to improve our geographic coverage to ensure we are building a true global outreach.

We’ve made what was once a laborious, slow and expensive process to pay, hold and spend money across borders now simple, quick and low cost.  We will launch new services soon to make paying, holding and sending money globally even easier and cheaper.”

telecoms
Cash ManagementFundsMarketsTax

UK Telecoms Industry Boasts Fastest Growing R&D Spend Of Any Sector

telecoms

UK Telecoms Industry Boasts Fastest Growing R&D Spend Of Any Sector

The telecoms industry is the UK’s fastest growing sector when it comes to spending on R&D, the latest ONS data has revealed.
Telecoms businesses increased their spending on research and development by £192m to £947m, according to the latest statistics for 2018 which were released recently.

This was a rise of 25.4%, taking it to a four-year high. However, the sector is still some way off its all-time high of £1.5bn set in 2007, analysis by R&D tax relief specialist Catax shows.

Total R&D spending by telecoms firms totalled £755m in 2017 and £797m in 2016.

The amount that UK businesses across all sectors have invested in R&D continues to grow, rising £1.4bn to £25bn in 2018 — up 5.8%. Manufacturing was associated with £16.3bn of R&D spending, up 4.7%, but pharmaceuticals remained the biggest product group with £4.5bn of R&D spending, up 3.3%.

The number of staff employed by UK businesses also continued to grow, rising 7.3% annually to exceed 250,000 full-time equivalents for the first time.

Mark Tighe, chief executive of R&D tax relief specialists Catax, said: “The telecoms industry is extremely important to the UK strategically and it is reassuring to see such growth in investment.

“There is still some way to go if this investment is to recover to levels seen before the financial crash, however, and it is vital this happens if Britain is to continue to be a key technological player on the world stage.

“More broadly, this is the second full year that Brexit Britain has shrugged off the political poison after the EU referendum and posted great gains in terms of R&D investment, running head and shoulders above the long-term average.

“For the first time in history a quarter of a million people nationwide are engaged full time in keeping the UK at the cutting edge. This is going to make a huge difference to Britain’s prospects outside the EU.

“The rate at which UK businesses are adding R&D staff to the workforce remains impressive, virtually matching the previous year with a rise of 7.3%.”

gold bar
CommoditiesFX and Payment

The Top Five Things You Need to Know About Gold

gold bar

The Top Five Things You Need to Know About Gold

Commodities are the lifeblood of commerce and economic growth. Daily FX, the leading portal for forex trading news, has built an interactive tool showing global commodity imports and exports over the last decade.

This unique tool allows traders to spot developments in the flow of commodities and the growth of both supply and demand while comparing the changes to critical economic indicators.

‘Global Commodities’ takes the form of a re-imagined 3D globe where the heights of countries rise and fall to show the import and export levels of a range of commodities over the last decade. The data visualisation allows users to switch views from a single commodity or market and show information relevant to that commodity or market’s performance.

John Kicklighter at DailyFX has used the tool to put together his top five things you need to know about gold:

1. Will the Federal Reserve System capitulate on policy tightening?

Gold is often seen as a credibility default swap on central banks and governments, and a further reverse course of Federal Reserve Monetary Policy in 2019 or beyond could help gold shine for investors.

2. Will inflation bring back the factor that gold has historically rallied behind?

Gold has long been praised as an effective hedge in times of inflation, and more so, times of hyper-inflation when prices skyrocket out of control. While that seems unlikely, an unexpected jump in general prices could align with a resurgence in the gold price. 

3. Could governments spiral out of control, leading to a hedge in gold as a haven amidst the political chaos?

Amidst noise and fears that the leaders of the state have lost their way is typically when gold does best. A recent example was the US Government shut down in 2011 when Gold traded near $2,000/oz. Recent Trade War rhetoric and other geopolitical themes seem to be fertile ground for gold investors.

4. Will central banks further ramp up gold purchases to hedge their Fiat Currency Reserves?

In late 2018 Eastern European central banks boosted their gold holdings following other purchases made by Russian and Chinese central banks as a source of stability. Estimates state that central banks hold 20% of all gold ever mined.

5. Could a bear market in stocks lead to the long-awaited boost in gold prices?

The rally in stocks since 2009 has not been kind to Gold, except at the start when the longevity of the stock market rally was in doubt. With the SPX500 near record highs and overall stock market volatility still low. Gold has had little reason to rise as a hedge, but a shock decrease in stocks and higher in volatility could give gold bulls the jolt they’ve long been without.

To learn more about Global Commodities visit: https://www.dailyfx.com/research/global-commodities

Brexit
MarketsRegulationSecurities

GDPR post Brexit and the impact on financial services

Brexit

GDPR post Brexit and the impact on financial services

By Ian Osborne, UK & Ireland VP, Shred-it

October 31st has been and gone. Yet despite the Prime Minister promising to deliver Brexit by this date, the UK remains part of the EU at least until January 31st 2020, following last week’s confirmation of the extension. And even then, it is still not clear exactly what will be, as MPs are interrogating the deal while preparing for a General Election on 12th December.

Like many industries, financial services have felt the effects of uncertainty surrounding if, how and when the UK will leave the EU. With London the epicentre for financial services in Europe, the wider potential impact is enormous.

The biggest fear amongst the business community has been that global companies will move their operations from the UK to other countries within the Eurozone.  Another cause for concern has been that companies will increasingly pause or divert investment in the UK, leaving Britain’s economy in stagnation.

On a more operational level however, there remain questions around EU regulations and how Brexit will impact financial services businesses from a regulatory perspective.  Take data protection, which was brought to attention last year with the introduction of the EU’s GDPR, and is today a big challenge for the industry.

According to data from the Ponemon Institute in 2017, financial services companies that experienced an information breach suffered the highest cost per capita than any other industry, at £154.  Furthermore, data left in insecure locations was the number one source of reported incidents in the finance sector in the UK (PwC for the ICO 2017).

Guidance from the Information Commissioners’ Office has recently confirmed that most of the data protection rules affecting businesses will remain the same post-Brexit.  The good news is that financial services companies that comply with GDPR and have no contacts or customers in the EEA (which constitutes EU countries plus Iceland, Norway and Liechtenstein) don’t need to do much more to prepare for data protection after Brexit.

However, organisations that receive personal data from contacts within the EEA must take additional steps to ensure they are fully compliant after Brexit, which may require designating a representative in the EEA.

Brexit aside, there remain questions as to how compliant with GDPR businesses are across the UK, despite it being a year since the legislation was introduced.  Financial services organisations that saw the introduction of GDPR as an opportunity to get their data-house in order and to improve the quality of the personal data they store are certainly reaping the benefits of last year’s GDPR efforts.

To assess the attitude of businesses in general, Shred-it commissioned a survey of 1,439 UK-based SMEs (under 500 employees) which found that 72 per cent of respondents said they were very aware of GDPR.

While this presents positive news, the biggest concern is whether that confidence in GDPR-readiness is justified. Less than half (45 per cent) of the firms who said they were ready to deal with data protection requirements also said they had reviewed their policies recently. Just over a third had contacted their customers to confirm consent to data use, less than a quarter had published a privacy notice, and just over two in 10 had reviewed, deleted or destroyed personal data.

These results suggest that businesses across all sectors – including financial services – need to take a more proactive approach to data protection.

So how can financial services firms ensure they are GDPR compliant?

Keep up to date with privacy laws

First things first. Businesses must stay up to date with privacy laws and understand what action – if any – they need to take to comply – particularly post-Brexit. Clear guidance is provided by the ICO website.

Customer communication has changed

Since the introduction of GDPR in 2018, financial services companies have had to rethink their strategies for communicating with customers. For example, customer e-marketing activities, such as newsletters, now require assessment post-GDPR and businesses must seek permission from customers to store their personal data and contact them with offers and promotions.

Protect your digital data

It’s important to remember that data protection refers to both digital information, as well as paper records. For digital data, financial services firms can take simple measures to ensure they are compliant with GDPR, including setting secure usernames, passwords and PINs for all devices, installing anti-virus software and a firewall on hard drives, avoiding posting confidential files on social media platforms, and avoiding opening files or links from an unknown sender.

Don’t forget paper records  

Not everything you collect, store, or handle is digital. When financial forecasts or year-end results are printed for a meeting, when reports or agendas are circulated for a meeting, they are at risk of getting into the wrong hands if they are not handled and disposed of properly and securely. Best practice should include the provision of locked confidential information consoles that are easily accessible, and company-wide policies that encourage a clean desk at night.

Business leaders should also be arranging for the secure destruction of documents after use or after prescribed periods of mandated storage, keeping only digital copies of essential files in an encrypted format.

Educate staff on data protection policy

In an industry that relies on privacy and confidentiality, the reality is that many information breaches happen not because of inferior firewalls or passwords, but because of employee error, negligence, or poor judgement. You may be doing everything you can but one employee, casually dropping a draft financial report into the recycling, can undo everything.

Finance services companies must have a strict policy on how to identify, handle and securely dispose of confidential information, that is communicated clearly to all employees and updated whenever necessary to avoid a potential breach.

Ian Osbourne
This article was written by Ian Osborne, UK & Ireland VP, Shred-it
Commodities
Capital Markets (stocks and bonds)CommoditiesFX and PaymentStock Markets

Top five things you need to know about commodities

Commodities

Top five things you need to know about commodities

 

Commodities are the lifeblood of commerce and economic growth. Daily FX, the leading portal for forex trading news, has built an interactive tool showing global commodity imports and exports over the last decade.

This unique tool allows traders to spot developments in the flow of commodities and the growth of both supply and demand while comparing the changes to critical economic indicators.

‘Global Commodities’ takes the form of a re-imagined 3D globe where the heights of countries rise and fall to show the import and export levels of a range of commodities over the last decade. The data visualisation allows users to switch views from a single commodity or market and show information relevant to that commodity or market’s performance.

John Kicklighter, Chief Currency Strategist at DailyFX, has used the tool to put together his top five things you need to know about commodities:

1. Will the US-China trade war lead to trade peace and synchronous growth to help commodities?

The US-China trade war is seen globally as a hindrance to growth, and as such, a hindrance to the demand for commodities. The International Monetary Fund warned governments to be  “very careful” and that the global economy remains vulnerable, and presumably, so do commodities until the issue is sorted out.

2. Will the US dollar strength continue and continue to suppress commodity price gains?

Since commodities are priced in US Dollars, a stronger USD as evidenced by the 6% gain in the US Dollar Index since the start of 2018 has had a positive impact on commodity price gains.

3. Will inflation pop up to increase the demand for commodities as a value store?

The lack of inflation has baffled central bankers and kept speculative buyers of commodities at bay.

4. Could a renewed China stimulus plan give industrial metals like copper the price boost and reverse weak sentiment?

Chinese stimulus via credit growth and top-down building projects have helped commodities in recent years find renewed demand, and the hope among commodity buyers is that there is more stimulus left in the tank.

5. Will US manufacturing turn around after falling at the start of 2019 to also lift commodities’ outlook?

A significant reading of the US Manufacturing Sector, the Institute of Supply Management recently touched the weakest levels since 2016 alongside Chinese Manufacturing weakness that has heavily weighed on commodities in general and especially metals like copper.

To learn more about Global Commodities visit: https://www.dailyfx.com/research/global-commodities

R&D
ArticlesCapital Markets (stocks and bonds)Corporate Finance and M&A/DealsTaxWealth Management

Meet the company recouping hundreds of thousands for UK business in R&D tax relief

R&D

Meet the company recouping hundreds of thousands for UK business in R&D tax relief

 

While growth in R&D tax relief claims has increased by 35% annually since inception in 2001 to over £4bn last year, and has already returned £26bn in total tax relief to businesses across the nation, the scheme is yet to be fully utilised by UK business according to R&D tax credit specialists RIFT Research and Development Ltd.

RIFT secures each client an average of more than £60,000 in tax relief due to R&D across sectors such as construction, manufacturing, agri-foods, ICT, advanced engineering, business and finance, mining and even education, but believe many are still failing to take advantage of the financial benefits. 

Introduced by the Government, the scheme is almost two decades old and encourages scientific and technological innovation across a plethora of UK business sectors. 

 

What is it?

It’s essentially Corporation Tax relief that when utilised, could reduce your company’s tax bill and in some cases, it can even result in you receiving payable tax credits.  

A company can qualify for R&D relief when they carry out research and development within their respective sector with the intention of advancing the overall knowledge or capabilities of science and technology within that field.  

 

R&D tax relief schemes

There are currently two R&D tax relief schemes in operation although the most beneficial is that aimed at SMEs which considers companies with a headcount of less than 500, a turnover of £86.3m or a balance sheet total below £74.3m – learn more.

If you want to see if your company qualifies and the types of costs you can reclaim, RIFT can also help you – learn more.

 

R&D sector success stories

RIFT has worked with countless companies who weren’t just unaware of R&D tax relief but had been incorrectly told by their accountants that they didn’t qualify.   

Here are some of the highest value claims.

Automotive: RIFT worked with an automotive industry tool manufacturer and identified £900,000 worth of qualifying costs, of which, the company was able to recoup £180,000 worth of previous costs.

Construction: RIFT worked with a leading construction company and identified £2m worth of qualifying costs for ongoing innovation across the entire business. Their accountant had identified just £50,000 worth of qualifying costs relating only to some new software they had developed and failed to recognise the gravity of the work they were doing within the sector. 

Architecture: Working with a private limited company practice within the architecture space, RIFT identified £1,000,000 worth of qualifying costs per year, after their accountant had told them their activities didn’t qualify as R&D.

Software: Thanks to RIFT, a client developing software was able to claim back a huge £750,000 from HMRC after £2.3m in qualifying costs were identified.

 
Head of RIFT Research and Development Limited, Sarah Collins commented:  

“Across the UK we have such a wealth of great businesses driving their respective sectors forward through research and development and it’s only right that they should be recognised in one form or another for doing so.  

However, time and time again, we see companies who are really leading the charge but are failing to maximise the return on their efforts by neglecting R&D tax relief. Some aren’t aware of the scheme full stop, while some are, but just didn’t realise that the innovative work they’re carrying out qualifies.  

Particularly now, while many SMEs are struggling with the potential implications of leaving the EU and the reductions in funding this might bring, R&D tax relief provides a very real, Brexit proof opportunity to maximise financial viability.”

stocks
ArticlesStock Markets

What should a business on the world’s first stock exchange focused exclusively on impact investment look like?

stocks

What should a business on the world’s first stock exchange focused exclusively on impact investment look like?

 

• Project Heather launches consultation at UN Climate Action Week
• Consultation on a new proposed ‘public markets impact issuer model’ is welcomed by Jamison Ervin of the UN Development Programme as “a significant step towards achieving the Global Goals”
• Truly collaborative approach to consultation appeals to the global community of impact experts to solve how business can achieve UN Sustainable Development Goals within a new systemic framework
• The proposed Scottish-based, global facing, impact-focused stock exchange would be the first recognised investment exchange in the world to mandate the annual reporting by issuers of the social and environmental impact of their business

Project Heather has announced the opening of a consultation, presenting its suggested elements for what an ideal issuer on its exchange might look like, including the core pillars required to support impact reporting by its issuers. The consultation will feed into the Impact Reporting Requirements for the proposed Scottish-based stock exchange. Speaking ahead of the UN’s Climate Action Summit at the UNDP’s Climate Hub, Project Heather CEO and Founder Tomás Carruthers declared the consultation open, in an impassioned call to action to the impact and sustainability communities.

Tomás Carruthers, CEO and Founder of Project Heather, said: “It is an honour to launch this consultation at the United Nations Development Programme’s Climate Hub as the world’s nations come together for Climate Week.

“Our mission at Project Heather is to make the Sustainable Development Goals, and beyond, feasible and achievable. Project Heather integrates the routes most likely to move capital at the greatest speed and scale to the kinds of projects that most urgently address risks to stakeholders captured in the SDGs. As a Project we have spent considerable time working on what a potential issuer on our proposed new Scottish stock exchange might look like, but now it is time to call on the global impact community to help. We invite them to join our consultation and hold us to account. This is a call to act now – we don’t have much time left to achieve the SDGs.”

Jamison Ervin, Global Manager on Nature for Development, UNDP, said: “It is now widely acknowledged that the Global Goals cannot be achieved without private sector support, and while impact investing is growing in some sectors, it is yet to penetrate capital markets. In seeking to change how capital markets value natural capital, we see Project Heather’s goals for an impact-focused stock exchange as a game-changer for our planet.”

The proposed Scottish-based, global facing, impact-focused stock exchange will be a stock exchange built specifically for impact investments, defined by the Global Impact Investing Network as those “made into companies, organisations, and funds with the intention to generate a measurable, beneficial social or environmental impact alongside a financial return.” The proposed new exchange, being built by Project Heather, is designed to make a positive impact on society and our global home. This will be achieved by managing, measuring and reporting the impact of the issuers on it against the targets of the Global Goals.

About the consultation

The proposed Scottish-based stock exchange will require impact reporting for every issuer on admission and annually thereafter. In building the operating model and frameworks for the new exchange, Project Heather has identified the Sustainable Development Goals as the destination framework, with every issuer required to report against the goals, and critically, the goals’ targets. The consultation seeks opinion on this chosen destination.

In addition, the consultation will also gather input on seven key elements it believes underpins the impact reporting requirements of an issuer:

1. The issuer’s board declares that its organisation’s core purpose is to make a positive impact, as defined by the Principles for Impact Finance to provide a definition of value which goes beyond profit, to include social and environmental well-being. This defined purpose is contextualised to align with global goals for sustainable development.

2. This declared purpose is clearly articulated through a theory of change.

3. This declared purpose is realised through the material core of the issuer’s activities, and the issuer commits to a proactive journey towards value creation within the entire system it operates.

4. Impact is measured using widely accepted frameworks and tools and must include measurement against the SDGs.

5. Impact is reported publicly and annually, with a commitment to ongoing improvement.

6. The organisation or issuer is committed to transparency.

7. The organisation or issuer is committedly against impact-washing.

Project Heather neither seeks to create a new impact tool or impact reporting framework, nor will it prefer any one existing impact measurement or management tool or framework. As part of the consultation process, Project Heather hopes to engage with the ecosystem of recognised and respected frameworks that exist for measuring, managing and reporting on social and environmental impact, both established and emerging.

In addition, Project Heather will seek to understand what the global impact community believes a business on the exchange should constitute and what segments should be avoided, if any. As transparency of information, both at listing and thereafter, is a reason Project Heather believes capital markets can transform impact investing, the consultation will seek opinion on what that transparency should look like.

Those wishing to respond to the consultation should go to www.projectheather.scot and complete the form. The consultation will be open until Monday, October 21st, 2019. The draft reporting requirements will be published following consideration of the consultation responses.

bank
BankingCapital Markets (stocks and bonds)

How the finance industry has evolved

bank

How the finance industry has evolved

Industries are constantly trying to keep up with the fast-paced landscape in which they operate, be it technological changes, customer demands or simply just making things easier for their consumers.

But it is the speed at which the technological advancements have reached that has forced traditionally slow-moving financial institutions to heavily invest to remain relevant to their consumers and remain competitive in the marketplace.

Personal

Banking is one of the oldest businesses in the world, going back centuries ago, in fact, the oldest bank in operation today is the Monte dei Paschi di Siena, founded in 1472. The first instance of a non-cash transaction came in the 20th century, when charga-plates were first invented. Considered a predecessor to the credit card, department stores brought these out to select customers and each time a purchase was made, the plates would be pressed and inked onto a sales slip.

At the end of the sales cycle, customers were expected to pay what they were owed to the store, however due to their singular location use, it made them rather limiting, thus paving way for the credit card, where customers that had access to one could apply the same transactional process to multiple stores and stations, all in one place.

Contactless

The way in which we conduct our leisurely expenditure has changed that much that we can now pay for services on our watches, but it wasn’t always this easy. Just over a few decades ago, individuals were expected to physically travel to their nearest bank to pay their bills, and had no choice but to carry around loose change and cash on their person, a practice that is a dying art in today’s society, kept afloat by the reducing population born before technology.

Although the first instances of contactless cards came about in the mid-90’s, the very first contactless cards associated with banking were first brought into circulation by Barclaycard in 2008, with now more than £40 million being issued, despite there being an initial skepticism towards the unfamiliar use of this type of payment method.

Business

Due to the changes in the financial industry leaning heavily towards a more virtual experience, traditional brick and mortar banks where the older generation still go to, to sort out their finances. Banks are closing at a rate of 60 per month nationwide, with some villages, such as Llandysul closing all four of its banks along with a post office leaving it a ghost town.

The elderly residents of the small town were then forced into a 30-mile round trip in order to access her nearest banking services. With technology not for everyone, those that weren’t taught technology at a younger age or at all are feeling the effects most, almost feeling shut out, despite many banks offering day-to-day banking services through more than 11,000 post office branches, offering yet a lifeline for those struggling with the new business model of financial firms.

Future innovations

As the bracket of people who have grown up around technology widens, the demand for a contemporary banking service continues to encourage the banking industries to stay on their toes as far as the newest innovations go.

Pierre Vannineuse, CEO and Founder of Alternative Investment firm Alpha Blue Ocean, gives his comments about the future of banking services, saying: “Artificial intelligence is continuing to brew in the background and will no doubt feature prominently in the years to come. With many automated chatbots and virtual assistants already taking most of the customer service roles, we are bound to see a more prominent role of AI in how transactions are processed from all levels.”

Technology may have taken its time to get to where it is now, but the way in which it adapts and updates in the modern era has allowed it to quicken its own pace so that new processes spring up thick and fast. Technology has given us a sense of instant gratification, either in business or in leisure, we want things done now not in day or a week down the line.

dubai
FinanceFundsMarkets

Dubai International Financial Centre boosts UAE financial sector development and reports significant growth during first half of 2019

Maktoum bin Mohammed: “Strong performance by DIFC highlights the international financial institutions’ confidence in Dubai”

 

  • Total number of companies currently operating in the DIFC stands at 2,289 – a 14 percent increase year-on-year and a 7 percent increase since end of 2018
  • Over 250 new companies, a 10 percent increase from the same period in 2018
  • More than 660 jobs created, boosting combined workforce to more than 24,000 professionals
  • DIFC’s financial technology ecosystem doubles in size in first half of 2019 – now includes over 200 companies, of which more than 80 are fully-licensed FinTech firms
  • 425 applications received for third cohort of FinTech Hive accelerator programme – three-fold growth since 2017 and 42 percent increase from 2018

 

Dubai International Financial Centre (DIFC), the leading international financial hub in the Middle East, Africa and South Asia (MEASA) region, reinforced its contribution to the UAE’s economy and its commitment to driving the future of finance, following strong performance during the first half of 2019.

The Centre saw sustained growth in the first half of 2019, welcoming more than 250 new companies, and bringing the total number of active registered firms to 2,289, demonstrating a 14 percent increase year-on-year. This has fuelled the creation of over 660 jobs, boosting the Centre’s combined workforce to more than 24,000 individuals, and has resulted in the occupancy of 99 percent of DIFC-owned buildings.

The DIFC now boasts more than 671 financial related firms, an 11 percent increase from the same period last year.  The financial services firms that joined in 2019 include Maybank Islamic Berhad from Malaysia, Cantor Fitzgerald from the United States of America, Atlas Wealth Management from Australia and Mauritius Commercial Bank. In addition, leading non-financial firms including Guidepoint MEA, Medtronic Finance Hungary Kft. and Network International, have also joined the Centre in the first six months of 2019.

His Highness Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, Deputy Ruler of Dubai and President of the DIFC, said: “Dubai continues to gain recognition on the global stage as the destination where business meets innovation, and the DIFC has been a significant driver of this.  The strong performance that the Centre has delivered during the first half of 2019 highlights the confidence and trust that international financial institutions have in Dubai.  Aligning with the 50-year charter announced by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, the planned expansion of the DIFC will solidify Dubai’s role as a pivotal hub for companies from around the world to access regional opportunities.”

His Excellency Essa Kazim, Governor of DIFC, commented: “The DIFC has been a pioneer in the financial services sector since its inception in 2004, as the first purpose-built financial centre in the MEASA region. 15 years on, we continue to demonstrate our forward-thinking approach with the enhancement of our legal and regulatory framework, as well as the development of a comprehensive ecosystem. The Centre remains a fundamental driver in leading financial sector transformation, supporting the advancement of the UAE economy, and developing the next generation of financial professionals.”

Driving the Future of Financial Services in MEASA

In response to the strong demand the DIFC continues to witness from financial institutions across the globe, the Centre embarked upon 2019 with the announcement of new expansion plans, supporting the economic future of Dubai and the UAE. The phased growth plan will triple the scale of the leading financial hub and enable the DIFC to help deliver on Dubai’s ambitious growth agenda, whilst diversifying and transforming the financial services sector within the wider region.

The new development will provide an international focal point for FinTech and innovation, enhancing the Centre’s reputation as one of the world’s most advanced financial centres and reinforcing Dubai’s position as one of the world’s top ten FinTech hubs, as listed by FT’s The Banker.

The Centre has already seen a marked increase in the number of firms that make up its dynamic FinTech ecosystem, which more than doubled in size from over 80 to 200 companies in the last six months.  Similarly, the number of licensed FinTech firms operating in the DIFC increased from 35 to more than 80 in the first half of 2019. Key international FinTech firms that have made the Centre their MEASA base include Dublin-based software company Fenergo, InsurTech leaders Charles Taylor and Swedish crowdfunding platform, FundedByMe.

Arif Amiri, Chief Executive Officer of DIFC Authority, commented: ‘We are continuing to cement our global position as a pivotal business and finance hub, while making significant headway towards meeting our 2024 targets.  Our focus on innovation and technology is delivering a blueprint for sustainable growth as we continue our journey towards driving the future of finance. DIFC’s emphasis on transforming its lifestyle offering, alongside strategic investments within technology and FinTech means we are confident about reinforcing our position as a leading global financial centre – a great place to live, work, play and do business.”  

The Centre received 425 applications from start-ups operating in the RegTech, Islamic FinTech, InsurTech and broader FinTech sectors, for the third cohort of its DIFC FinTech Hive accelerator programme, a 42 percent increase from the 2018 programme. This also marked a three-fold increase from its inaugural cycle in 2017, exemplifying the pace of evolution of this fast-growing industry, as well as the preference of Dubai and the DIFC as the home for FinTech firms looking to scale their business across the region.  Approximately half of the applications received for the 2019 programme originated from the Middle East, Africa and South Asia. 

33 start-ups have been selected following a series of interviews, conducted in consultation with DIFC FinTech Hive’s network of 21 participating partners, including Abu Dhabi Islamic Bank (ADIB), Emirates Islamic, Emirates NBD, Finablr, HSBC, National Bank of Fujairah, Noor Bank, Riyad Bank, Standard Chartered, and Visa, as well as the associate financial institution partners Arab Bank and First Abu Dhabi Bank (FAB).

InsurTech start-ups will work closely with leading insurance players, AXA Gulf, Noor Takaful (Ethical Insurance), Zurich Insurance Company Ltd (DIFC), AIG, Insurance House, Cigna Insurance Middle East S.A.L. and MetLife, to help them develop game-changing solutions that address the growing requirements of the industry. In addition, this year’s finalists will be supported by strategic partner Dubai Islamic Economy Development Centre (DIEDC) and digital transformation partner Etisalat.

Furthering the Centre’s commitment to supporting FinTech in the region, DIFC hosted the first Demo Day for the inaugural cycle of the Startupbootcamp programme in April 2019, alongside HSBC and Mashreq.  The event showcased innovative concepts from ten graduates of the programme, consisting of entrepreneurs from the UAE, Singapore, United Kingdom, Greece, France, Thailand, Ghana, Morocco, Ukraine, and the Czech Republic.

The Centre’s thriving FinTech community benefits from the strong relationships the DIFC has continued to build with key international accelerators through ongoing delegations and partnership agreements. The DIFC signed four MoUs during the first half of 2019, one with Dubai SME to help foster entrepreneurship in the UAE and further the National Innovation Agenda, as well as three additional agreements with FinTech Saudi, Milan’s FinTech District and FinTech Istanbul, expanding the Centre’s network of international FinTech hubs to 14.

Furthermore, DIFC has worked to increase access to funding by engaging and building its Venture Capital ecosystem, as well as investing directly into promising FinTech start-ups.  In March 2019, the Centre announced the appointment of Middle East Venture Partners and Wamda Capital to manage USD 10 million of its dedicated USD 100 million FinTech fund.  To date, DIFC has received more than 50 applications from a variety of financial technologies, including payments, roboadvisory, blockchain and KYC platforms.  The applications received have been in equal parts from early and growth stage firms, signifying interest from firms across the start-up business cycle.

Supporting Human Capital Development and Delivering Sustainable Impact

As part of the DIFC’s efforts to support continued professional development and strengthen the regional talent pool, the DIFC Academy offers world class financial and legal education through strategic partnerships with 26 leading educational institutions and government entities. To date, the DIFC has seen more than 5,500 graduates successfully undertake executive education courses and programmes in finance, business and law, as well as two dedicated Masters of Laws (LLM) programmes.

Knowledge sharing and thought leadership remained a core focus for the financial centre in 2019. The third edition of the Dubai World Insurance Congress (DWIC) and the second edition of the Global Financial Forum (GFF) welcomed more than 700 industry leaders to each flagship event. Key speakers at DWIC included James Vickers, Chairman of Willis Re International and David Watson, Chief Executive Officer for Europe, Middle East and Africa and International Casualty at AXA XL, who shared global perspectives on reinsurance growth strategies. Meanwhile, the GFF, which brought together more than double the number of business leaders compared to the inaugural event in 2018, attracted the likes of Sir Gerry Grimstone, Former Chairman of Barclays Bank PLC and emerging markets guru, Mark Mobius.

In recognition of DIFC’s efforts towards building one of the world’s leading financial centres over the last 15 years, the Centre was the only free zone in the UAE to receive the Dubai Quality Award in April 2019. The award is a reflection of the DIFC’s hard work and dedication in building a sustainable and progressive business environment. 

In May 2019, another milestone for sustainable business growth was achieved as Majid Al Futtaim launched the world’s first benchmark corporate Green Sukuk at Nasdaq Dubai, supporting Dubai’s growth as the global capital of Islamic economy. The Green Sukuk investment will be used to finance and refinance Majid Al Futtaim’s existing and future green projects, including green buildings, renewable energy, sustainable water management, and energy efficiency. 

Enhancing the Legal & Regulatory Framework to Fuel Growth

The Centre has been at the forefront of enhancing its legislative infrastructure to provide the DIFC community with access to opportunities within the MEASA region, whilst providing greater stability and certainty when doing business in the DIFC. The Centre’s robust legal and regulatory framework remains the most sophisticated and business-friendly Common Law jurisdiction in the region, aligned with international best practice.

DIFC continues to support the development of the financial services sector and foster the UAE’s economic growth by encouraging the development of the domestic funds market. In May 2019, the DIFC’s independent regulator, the Dubai Financial Services Authority (DFSA), announced the a new regime to facilitate the passporting of funds, in collaboration with the UAE’s other financial regulators. The UAE passporting regime is a regulatory mechanism for the promotion and supervision of investment funds that encourages foreign licensed firms in financial free zones based in other countries to enter the local market.  

With the aim of ensuring businesses and investors can operate across the region with confidence, the DIFC also unveiled the new Insolvency Law in June 2019, enacted by His Highness Sheikh Mohammed bin Rashid Al Maktoum. The new law facilitates a more efficient and effective bankruptcy restructuring regime for stakeholders operating in the DIFC.

In addition, the DIFC has continued to create an attractive environment for the 24,000 strong workforce based in the Centre to thrive, whilst protecting and balancing the needs and interests of both employers and employees. To support its vision, the DIFC unveiled its new Employment Law in June 2019 to address key issues such as paternity leave, sick pay, end-of-service settlements and more.

As part of the Centre’s blueprint for the transformation of the financial centre and in line with global retirement savings trends the DIFC launched the Employee Workplace Savings (DEWS) scheme, which will see the evolution of end-of-service benefits from a defined benefit scheme to a defined contribution scheme, while offering a voluntary savings component for employees.

The Centre also unveiled a new unified, simplified and more expansive Prescribed Companies regime that makes structuring and financing in the DIFC faster, flexible and more cost-effective. The new regime encompasses structures previously offered by the Centre, including Intermediate Special Purpose Vehicles (ISPVs) and Special Purpose Companies (SPCs).  This has contributed significantly to a robust pipeline of prospective business from the aviation financing sector, as well as generating substantial interest from family offices looking to utilise these structures in their succession planning.

Creating a Vibrant Retail & Lifestyle Experience

Today, 91 percent of DIFC’s prime retail space is occupied by 432 leading lifestyle, art, fashion and food & beverage brands, an offering that will be significantly boosted once Gate Avenue is fully open.  Upon officially opening its doors to the public, the new development will provide seamless connectivity to the Centre’s comprehensive lifestyle offering, from The Gate building through to Central Park Towers.  The new retail experience will feature over 100 days of unique arts, culture and wellness activations, making DIFC the destination where business meets lifestyle.

During the first half of 2019, Hilton Hotels & Resorts announced the opening of Waldorf Astoria, Dubai International Financial Centre. The 275-key hotel occupies the 18th to 55th floors of the Burj Daman complex, including 46 suites and 28 residential suites offering unobstructed views of the Downtown Dubai skyline.  Combined with the two other world-class hotels based in the Centre, Four Seasons and the Ritz-Carlton DIFC, this brings the total number of hotel rooms available to those visiting the DIFC to 722.

In addition, the Centre welcomed a number of new culinary concepts to the DIFC’s gourmet scene including ‘Marea’, the New York fine dining experience led by multi-Michelin starred chef, Michael White as well as Grecian inspired ‘Avli by Tasha’. In March 2019, it was announced that renowned chef Nusret Gökçe is set to launch casual dining concept ‘Saltbae’ at the Centre this year.

DIFC is also home to one of the UAE’s largest collections of public art with sculptures from internationally renowned artists including Manolo Valdés and is the foundation for initiatives such as the One Mile Gallery in partnership with Brand Dubai which showcases the best of local, regional and international design and promotes art, innovation and entrepreneurship. 

The Centre also welcomed its seventh elite art gallery, Sconci Gallery to the DIFC in the first half of 2019. Established in Rome during 1977, the gallery has collaborated with leading artists and international auction houses to showcase collections from masters of modern and contemporary art, as well as emerging artists. 

During March 2019, the DIFC hosted the most successful edition of the hugely popular Art Nights in the last five years. The event, which marks the beginning of Dubai’s coveted art season, Art Dubai 2019, saw participation from international and local art galleries and artists, as well as installations accompanied by electric musical performances and light installations from interdisciplinary artists.

Corporate Finance and M&A/DealsForeign Direct InvestmentStock Markets

US and Asian brands dominate rankings of world’s most valuable technology brands

  • US tech giants take top 5 spots, Amazon is world’s most valuable technology brand with monumental US$187.9billion brand value
  • Apple, Google and Microsoft defend spots as brand values continue to surge
  • China’s WeChat breaks into top 10 as world’s strongest tech brand, more Chinese brands rising through ranks
  • New entrants from digital space: Twitter and Instagram gaining traction, as online shopping portal Taobao is most valuable new entrant
  • Baidu owned iQiyi fastest-growing, rising 326% to impressive brand value of US$4.3 billion
  • Facebook losing brand strength, recording Brand Strength Index (BSI) score of 82.9 out of 100 and AAA rating
  • IT Services brands log growth: TCS, Accenture, Capgemini, Wipro and IBM all see growth in brand value

Amazon leads tech titans

Amazon strengthens and maintains its position as the world’s most valuable technology brand. Brand value surges 25% to a record US$187.9 billion, over US$30 billion more than 2nd place Apple. Notoriously strong for service, last year, Amazon recorded its most successful Prime Day to date, with consumers purchasing more than 100 million products. This was shortly followed by the brand crossing the US$1 trillion threshold on Wall Street for the first time in its history. And due to an ever-diversifying portfolio, it seems no industry is safe from the threat and power of Amazon.

The Amazon brand is well-positioned for further growth but the presence of Chinese brands this year is most impressive and certainly not to be ignored.

David Haigh, CEO of Brand Finance, commented:

“Amazon is leaving no stone unturned as it relentlessly extends into new sectors, however its technological might still overshadows rivals to retain the status of the world’s most valuable tech brand.

The Amazon brand is well-positioned for further growth but the presence of Chinese brands this year is most impressive and certainly not to be ignored.”

Chinese brands flex muscle

While the top 5 most valuable tech brands are dominated by brands from the USA, the remaining 5 within the top 10 are from China and South Korea, asserting the dominance and competitiveness of the Asian players.

New entrant Taobao (brand value US$46.6 billion) is the most valuable, breaking into the top 10 for the first time. The Chinese online shopping website is headquartered in Hangzhou and owned by Alibaba. It is one of the world’s biggest e-commerce websites, offering its almost 620 million monthly active users a marketplace to facilitate consumer-to-consumer (C2C) retail by providing a platform for small businesses and individual entrepreneurs to open online stores

At US$50.7 billion, China’s WeChat is a rising star, having lifted its brand value 126% over the previous year. Its influence is reflected in the impressive way in which the brand has successfully created a digital ecosystem for its 1 billion Chinese users who use the platform every day to instant message, read, shop, hire cabs, and more

WeChat has broken into the top 10 for the first time, making it worthy of its strongest brand accolade, improving on last year with an upgrade to the elite AAA+ brand strength rating and a corresponding 90.4 out of 100 Brand Strength Index (BSI) score. Whilst China’s burgeoning middle class makes it attractive to continue strengthening the brand domestically, the massive growth experienced by brands as they pursue international business is also appealing

Another tech brand relying on the domestic customer base has made the most of the immense growth in demand for streaming content within the country. iQiyi is not just China’s but the world’s fastest-growing brand this year, up 326% to US$4.3 billion. The Baidu-owned online video platform is China’s answer to Netflix and hosts over 500 million monthly active users.

More likes for digital and social media brands

Netflix is rising through the ranks, with its brand value growing by a whopping 105% over the past year to $21.2 billion, Netflix is set to play the lead role in home entertainment, building a disruptive business as a universally accessible narrowcaster and in this way effectively challenging traditional broadcasting brands.

YouTube (brand value up 46% to $37.8 billion), another rapidly growing digital media brand, retains its spot in 11th place. Like Netflix, YouTube is building a broad platform for video content, in an effort to leverage its brand from merely peer-to-peer video creation and sharing to also include a growing premium and professional video library.

Similarly, Twitter (brand value up 66% to $3.2 billion) jumps almost 100 ranks to become the 258th most valuable brand in America. Another successful social media platform, Instagram is the most valuable new entrant to the ranking this year, claiming 47th spot with a brand value of $16.7 billion.

New entrant Instagram, the photo and video sharing social networking platform owned by Facebook, recorded a brand value of US$16.8 billion. The service has over 1 billion active monthly users and with the rising popularity of Instagram influencers, is also becoming the most attractive portal for digital marketing spends and bringing in impressive advertising engagement revenue.

Although rising up from sixth to fifth place, social networking site Facebook (brand value up 8.7% to US$83.2 billion) has recorded a drop in its brand strength, its AAA+ status from last year slipping down to AAA in 2019. Facebook’s corresponding Brand Strength Index (BSI) score has decreased to 82.9 out of 100.

IT Services brands log growth

Not to be ignored are the notable performances in the technology rankings clocked in by IT Services brands TCS, Accenture, Capgemini, Wipro and IBM who have all seen growth in brand value since last year.

Valued at US$26.3 billion, Accenture has grown rapidly by 56.5% since last year, a testament to its continued innovation across AI, advanced analytics and growing cybersecurity practice. The professional services and IT Services brand has made waves in the industry for its pioneering work on how companies can best achieve a smooth blockchain transformation.

Growing in brand value by 23% to US$12.8billion is India’s largest IT services conglomerate, Tata Consultancy Services (TCS), bolstered by a disciplined focus on the market’s increased demand for digital services. TCS has positioned itself as a leader in providing a superior all-round customer experience, leveraging artificial intelligence and robotic automation across its transformation programs. TCS is also to be commended as the first Indian IT services brand to achieve success in the Japanese market; the Mumbai-based brand has expanded its operations in Japan and overseen a merger of three brands to create Tata Consultancy Services Japan. 

Wipro (up 25% to US$4.0 billion) is to be commended for its significant investments in digital transformation capabilities, niche acquisitions, and a recent brand refresh, which have propelled it up the rankings to 81st most valuable technology brand this year.

Stock MarketsTransactional and Investment Banking

Duncan Kreeger launches prop tech business TAB APP

West One loans founder and CEO of TAB Duncan Kreeger has launched a fractional ownership proposition, TAB APP. Investors, once the app is fully launched, will be able to invest in commercial and residential property in three clicks.

Duncan has created a simple explainer video to make the complicated world of fractional ownership, rental yields and investing simple for potential users. Visit app.tabldn.com for more information

Watch the video below

Duncan Kreeger said: “Having worked within the property and financial services industry all my life I’ve long thought about how I can make a serious change to make people’s lives easier and allow the general public to have access to rental returns without the heavy investment of a BTL purchase. That’s why I bring you TAB APP, we’ll give users long term sustainable returns on commercial and residential property from investing from £1,000. I’m delighted with what we’re creating with my app developers Elemental Concept.”

The TAB APP is not yet ready for users to download and invest, this will be coming within the next month as the APP is currently going through the first batch of user testing. Users can register to test the app by emailing [email protected]

Capital Markets (stocks and bonds)Transactional and Investment Banking

London Tech Week: Blockchain for Business Summit launches today

Blockchain for Business Summit starts today as part of TechXLR8, London Tech Week’s flagship event. Now in its third year, the summit leaves hype, speculation and cryptocurrencies behind to focus on real-world use cases from industries and business leaders who are reaping the rewards of blockchain right now.

Daniele Mensi, CMO of NextHash, spoke at the Global Blockchain Congress in Dubai and gave the following commentary: 

Digital securities, Security tokens, tokenised securities or investment tokens are Financial securities that are compliant with SEC regulations and can provide investors with equity, dividends, revenue or profit share rights. With Digital Security offerings, the lack of complexity ensures that fundraising can be consolidated and the reduced need for middlemen means that investors experience a shorter lockup period. Often, these digital securities represent a right to an underlying asset such as proof of real-estate, cashflow or holdings in another fund. These benefits are all written into a smart contract and the digital securities are traded on a blockchain-powered exchange.

Because the blockchain market is decentralised and active 24/7 by nature, it is in a state of virtual liquidity when compared with the traditional financial markets. That is, one can trade 24 hours a day, 365 days a year and the market is never closed.

Ana Bencic, President of NextHash, has provided commentary on the potential of blockchain technology.

“Cryptocurrency trading spearheaded the rise of blockchain and these now provide a conduit between investors and businesses, utilising the technology to provide secure transactions for companies and institutions. As blockchain technology grows ever more popular with investors and traders everywhere, countries and companies that have adopted the technology at an early stage will be the front runners of this new technology. Others would be wise to use London Tech Week as an opportunity to see the true benefits of blockchain in financing businesses and get involved in tomorrow’s unicorns now.”

Derivatives and Structured Products

How switching to online purchasing can save your business hundreds of pounds… per item!

Dave Brittain, Senior Manager from Amazon Business UK

A huge expense to all businesses that is often overlooked is the cost of those essential day to day items. While many purchasing departments simply contact suppliers in order to replenish items such as pens, paper or ink, they often use multiple providers for these types of basic products, making the process more disjointed and far less cost-effective than it ought to be.

So how can businesses streamline the process and save money at the same time?  The answer lies in digital procurement.

Online marketplaces help businesses to locate and purchase multiple items in one place and can tailor themselves based on previous purchasing behaviours in order to improve and simplify the process. Having access to hundreds of millions of products from various suppliers drives transparency and at Amazon Business we’ve noticed that this can lower the cost of procurement by up to 70%.

Product search and offer comparison

Business customers that use an online marketplace have access to an extensive range of products from office supplies, laptops and keyboards, to industrial goods and janitorial items. Having different variations of similar products allows consumers to compare and review options from different brands and suppliers to evaluate what products are the best value for money, all within one marketplace. Buyers can compare products from different sellers in seconds, and the website algorithms will recommend items with the best delivery times, features and price to make the selection process more streamlined.

Supplier selection and qualification

Most businesses build strong relationships with their suppliers which are based on knowlegde of the services they provide and trust that has been built over the years. For this reason, many companies stick with the same suppliers and do not explore alternative options, which could generate huge savings in the long run. For those looking into these types of savings, online marketplaces reduce the time spent on supplier selection by pooling multiple suppliers together and recommending them based on reputation, services offered and customer reviews. This reduces the costs of qualifying suppliers and creating individual supplier records. The service is also particularly beneficial for start-ups which may not have the budget to select suppliers through trial and error.

Approval workflows

Procurement time can also be significantly reduced, as employees can make product purchases themselves. Some online marketplaces offer approval workflows which allow employees to trigger an automatic approval process with a single click. This allows for a quicker turnaround for purchasing without losing control and visibility of outgoings. Detailed business analytics are also available post-purchase, allowing business owners to identify which departments are incurring the highest expenses.

Reconciliation and invoicing

A huge benefit of using an online marketplace for orders is that all purchases, and therefore invoices, are obtained from a single source. Business customers can easily access detailed delivery times, product and supplier information for each order, and reviewing previous purchases is made simpler. This means that there is a reduced number of invoices sent to finance teams making it easier for them to reconcile payments.

Overall, although there will always be a place for traditional procurement, making the switch to an online marketplace can significantly reduce business expenditure, while simultaneously reducing time spent on product acquisition and providing a more detailed review of the business’s outgoings.

Stock Markets

How digital is disrupting the world of early stage investing

 By Oliver Woolley, CEO, Envestors

 

The landscape we have today is the same landscape we had fifty years ago. We’ve got investment networks, clubs, incubators and accelerators, all of whom actively help investors to find opportunities and scale-ups to secure funding – but they are all closed and separate. Our vision for the future is one in which all these groups connect to one another, without sacrificing control or independence. We’ve built a software platform to do just that. Using an aggregated approach, we can bring the world of early-stage investing together in a way that benefits all of those involved.

 

For scale ups, it means working with one party and gaining wide exposure rather than promoting a deal through a number of disparate networks. For investors, it means having access to a near unlimited number of deals, all filtered according to interest and managed in a single location – regardless of network of origin. For investment facilitators, it means a greatly improved experience for their investors and decreased operational overheads.

 

 

Results – immediately!

 

We live in an age of instant gratification. This spans across all areas of our lives – from instantaneous validation on Twitter and one-hour Amazon delivery, to 24-hour news at our fingertips. So why should the investment experience be any different? If I can find out about anything in the world from wherever I happen to be, why should I – as an investor – wait for a pitch session to find out about investment opportunities?

 

ROBO: a behavioural change

 

Borrowing a term from the retail industry, ROBO (Research Online, Buy Offline) reflects a broad behavioural change. People no longer head to a shopping centre to browse for an item, they go online and find what they want and then go down to the store to get it. In many cases, they opt not to go to the store, satisfied with the information they have found online, and make an immediate purchase. This behaviour isn’t particular to consumers: a study, by Forrester Research, found that 68% of business to business buyers researched online independently and a further 62% say they go as far as developing a selection criteria and vendor list based on digital content.

 

So, why is it different with investing? When people prefer to get information instantaneously and independently, why do we ask them to wait for a pitch event? Using digital, information on potential investment opportunities and any relevant details can be ready for investors to read at their leisure. Further to that, information can be interactive. Potential investors can ask management teams questions – using online channels – and get answers in real time.

 

Achieving diversity

Digitisation has fuelled the unprecedented growth of start-ups in the UK.  This has produced a vast – and occasionally overwhelming – array of opportunities, resulting in a trend showing networks are becoming more niche and sector specific. While regional investment networks have long been part of the landscape, they are joined by networks specialising in – for example – Greentech, MedTech or women-owned businesses.  This is not a bad thing, but it has caused further fragmentation.

 

Experienced investors know, that if they are to get the best chance of a return on their investments, a diverse portfolio is a must. However, such specificity throws diversity out the window, leaving investors only one option – joining multiple networks and doing a lot of leg work to build and manage their portfolios.

 

Digital to the rescue. With an aggregated platform, regional and niche networks can connect to one another and share deals at the click of a button. This allows networks to protect their greatest asset – their investors – while offering them a broader array of investment opportunities without doing all of the vetting and admin.

 

Responding to uncertainty

 

By mid-2018, the impact of a looming Brexit was already starting to be felt across the industry.  With predictions of economic troubles in the UK in the short term, many investors tightened their purse strings, becoming increasingly selective over which investments to make. Yet, at the same time, reports show that foreign investment is at an all-time high: in 2017, a whopping £6bn was invested over the course of the year, with 396 of these deals involving at least one investor from abroad.

 

This is another opportunity that could be capitalised by digital. With a digital platform, deals can flow across borders – giving investors the ability to further diversify their portfolios, while giving businesses a better opportunity to find investment.

 

The benefits of using digital are clear so it is time for the investment sector to make changes. Some key players are already on board (for example, The SetSquared Partnership and Britbots).  I’m sure that more will be following and gaining the benefits.

Private BankingPrivate ClientStock MarketsWealth Management

Ashfords LLP Launch Digital Legacy Service

The death of a loved one is a traumatic and difficult time. Dealing with an estate can often result in unnecessary cost, time and upset when trying to trace assets and meet the wishes of the deceased. Assets can be misplaced, forgotten about or even diminished in value before you get the chance to deal with them. Law firm, Ashfords LLP, has developed and launched a new and innovative digital legacy platform for private individuals to make executor’s lives easier.

Digital legacy enables users to keep a secure record of their accounts and assets (whether it is a bank account, shares or even the existence of social media accounts), leave messages for loved ones, set out funeral plans and wishes and help ensure that the process of dealing with their estate following their death is as easy and as cost effective as possible.

On the death of the individual the system is unlocked for executors in a read-only format to ensure that a clear audit trail between the wishes of an individual and the administration of the estate is maintained. The primary purpose of the system is to facilitate executors to know what exists so they can ensure all assets are accounted for and all accounts are closed.

Executors also have the option to open up a memorial book where friends and family can send in memories of the individual which can then be used at the funeral, executors can also send details of funeral plans through the Digital Legacy system if they wish to.

Michael Alden, Head of Private Wealth at Ashfords said: “We want to help individuals keep track of their estate and in turn help ensure that following a bereavement, families are able to close down any online accounts quickly and efficiently making the process less stressful, and potentially reducing the cost of administering estates. We are excited to launch our Digital Legacy service and hope this will be a real benefit to its users and their families.”

Garry Mackay, CEO of Ashfords commented: “Digital legacy is a further example of the firm adapting to the ever-changing needs of our clients. As lawyers, we have a responsibility to constantly look at innovative ways in which we can make things easier and more cost effective for our clients whilst continuing to provide the highest level of advice. Digital legacy is just one of a number of products we have in development for our private and business clients.”