Category: Markets

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.”

MarketsStock Markets

Navigating challenging markets in the investment industry

By Wael Al-Nahedh, CEO at Spearvest

The global economy has been experiencing unprecedented uncertainty in recent years. Political, economic and social challenges have meant that businesses and individuals are incredibly cautious about where they place their money, particularly for long-term investments.

The overall concerns in the US market topped with the UK’s difficult political situation around its planned departure from the European Union is making investors sit tight and hold back on plans until the future is clearer. With market uncertainty, it is crucial that investors realise it can bring with it great opportunities that only those who are forward thinking will be able to capitalise upon and improve their returns.

The US is a very complicated market for investors. For a fourth straight quarter, CEOs say they are less optimistic about the market which is highlighting a broader trend of concern around corporations at their peak time of profitability. As well as this, the inverted yield curve is producing warning signs of a recession and recent data shows a clear weakness from housing and retail sales and customer sentiment.

The UK market is producing quite negative predictions for business investment. A recent poll from the British Chambers of Commerce has predicted that UK business investment is set to decline in 2019 by 1 per cent – making it the worst year since the financial crash of 2008. Economic growth reports have also predicted that 2019 will be at 1.2 per cent, the lowest in a decade. This is a concerning position for the UK to be in and its certainly clear that the estimations are corresponding together with the uncertainty around Brexit. However, we must make it clear that these are only forecasts for now and they are likely to change, either negatively or positively to reflect the developments. Once the final outcome of Britain leaving the European Union is made, the market should steady itself and these predictions may be updated.

Interestingly, China’s growth has set to be lower this year too due to trade tensions. It is also set to have slower growth in consumer spending and a tighter hold on global liquidity. Despite this prediction, China’s government are attempting to stimulate the economy through fiscal, monetary and regulatory measures to help growth levels match targets.

Thanks to the challenging markets, it has never been more vital for an investor to monitor their current portfolio and look at where investment is needed. For businesses, they must insist on having a clear view of the market before committing to long-term and costly investments. Despite the need for clarity, it should be noted that with uncertainty, brings fantastic opportunity for investors to get ahead when many are being overly cautious. There is often an opportunity to strike a better deal, provided it is the right investment for the individual or business that will give long-term success.

Although volatile markets can be incredibly successful for some, one must be able to withstand the rapid change in market values and the associated possibility of loss. This means advice given to investors is extremely important to get right, particularly on the topic of what they should be holding onto throughout a dip in the market versus what should be simply let go of.

To stay ahead of the curve, investors should look at diversifying their wealth on a global scale and turn their heads towards value-focussed funds which is ultimately investing in unpopular stocks that have seen some significant growth in the past but not as popular as the higher growing stocks.

It is apparent that economic uncertainty, driven by current political circumstances in the US and UK, is a real concern for investors. When political uncertainty is prominent, we often see emerging markets profit from the situation and I think this is what we will end up seeing here. Investors should look at markets that would not usually have their attention and look at potential commodities that have previously taken a backseat.

To have a better view of how a portfolio is performing, technology can be implemented. It is becoming increasingly important for each custodian of wealth to be digitally connected, and to feed live data into a secure platform. This helps to provide investors with a full view of their whole portfolio in real-time – an important insight for uncertain markets. This type of technology will rely on independent market pricing and the reporting process must be objective and accurate in order to give the necessary and correct data. By having this, an investor can properly assess their portfolio performance and make smarter and better-informed decisions. Although, it’s not all about performance. Obtaining a fully consolidated view of wealth means it is easier to mitigate risk, allowing an investor to recognise potential issues and take action before they become a bigger problem.

Whilst political uncertainty remains a concern for all investors, it should not equate to an end of an investment portfolio. When looking to invest in difficult times, it is important that those looking to distribute their wealth are given advice that is well-informed, unbiased and profound from those who are closely watching the markets and can provide strategic and tactical guidance. As we see more individuals shying away from making investments, this is when fantastic opportunities open up for those looking to take more of a risk for a higher return down the line.

Capital Markets (stocks and bonds)MarketsStock Markets

What Game of Thrones stocks and shares do you hold?

By Alister Sneddon, Genuine Impact

 

 

It is hard to believe that the Game of Thrones (GoT) saga is coming to a close and we’ll soon find out who’ll win and take the Iron Throne.

 

Finding a winner relates to the quest to pick stocks and shares too.  Just as we’ve analysed the characters in GoT, and made our assessment of their strengths and weaknesses, we can assess a stock by looking at its Quality, Value, and Momentum.

 

Based on these three criteria, here are some stock picks for three favourite GoT characters:

 

Jon Snow

Jon has a lot of backing and support from the public. He has also proven he can withstand even the most unexpected of events. There is a spark of innovation to be found: joining forces with the enemy of my enemy turned out to be an excellent move against the Night King’s army, but is it a cursed alliance joining forces with Daenerys?

 

Paddy Power Betfair PLC

Paddy Power and Betfair now operate as a single company having joined forces in 2015. Coming together brought them back from infighting to concentrate on ruling.

 

Paddy Power Betfair is an excellent Quality stock. The company has a strong balance sheet and plenty of cash. Jon isn’t cash rich, but he has resources: endless people to call upon when required. Paddy Power Betfair’s cash reserves, make them resilient to any new gambling regulations or other changes.

 

A company’s value is based on today’s price per share, versus how much money the company generates. The higher the value the cheaper it is to buy this company now compared to how much money it’s bringing in i.e. the money being generated will grow into bigger profits (and returns) in the future. Paddy Power Betfair scores highly for Value. They bring in a lot of revenue compared to the stock price today. If they can convert this money into bigger profits there’ll be higher returns for investors. If you’d invested in Jon before you knew about his true heritage, you’d be collecting rewards now!  Investing in Paddy Power Betfair has potential for more to come.

 

Finally, a company’s Momentum. Momentum takes views from industry experts, e.g. big banks and financial institutions, and aggregates them. Do the experts believe this company will barely beat expectations or perhaps completely exceed everyone’s wildest dreams? Paddy Power Betfair is very average in terms of future Momentum. They’re hitting or beating their targets. The industry feels positive, without expecting anything amazing soon.

 

Assessment

Quality Score: High

Value Score: High

Momentum Score: Low

 

 

Arya Stark

Arya is a force to reckoned with, she is still human and makes mistakes, but there is no doubt she will keep on going.  While Arya might not want the Iron Throne, she is capable of taking it. Thankfully she is happy with her own path and continues to influence the world around her.

 

Taylor Wimpey PLC

One of the largest house building companies in the UK, Taylor Wimpey is often used as a barometer for the Brexit impact. Like Arya, Taylor Wimpey is a force unlike anything else.

 

Taylor Wimpey is no stranger to scandals or scraps. Unlike Arya however, Taylor Wimpey has the cashflow to make its problems and challenges negligible. Regarding the Quality score Taylor Wimpey has a lot of purchasing power, but housing market regulation is prone to change and Brexit has shaken us, so they are keeping an eye on their war chest.

 

What about Value – the future potential based on what you pay today? Taylor Wimpey scores extremely well for Value; the company generates a lot of income compared to its current share price. If it can convert the incoming revenue into higher margins the results will be impressive.

 

For Momentum, the industry experts seem to agree. There is plenty of potential upside in the future. Once the Brexit air clears it will be business as usual, and like Arya, Taylor Wimpey will show up ready to fight.

 

It’s a promising outlook across the board, however starting from such a strong position means it’s tough to exceed expectations.

 

Assessment

Quality Score: High

Value Score: High

Momentum Score: High

 

Night King

Terrifying, unyielding, and never-ending. There has never been a threat as serious and all-consuming as the Night King and his army of the undead. It doesn’t matter how many you kill or how far you run, he will always be there.

 

Sports Direct International PLC

Very much like the Night King, Sports Direct picks up dying companies and recruits them into the Sports Direct family, giving them new life

Buying up assets and companies on the cheap is still expensive. So, Sports Direct doesn’t have the happiest of balance sheets. The Quality score is very low, cash in the bank is not the strategy here. It’s spending money to make money.

In terms of Value there is potential. Sports Direct’s current share price is lower than expected when compared to the amount of revenue and income they generate. The Value is lower than expected, but not enough for this company to be labelled a deep value long term buy and hold.

With worse than expected accounts, even with the company being offered “at a discount” (medium Value) experts don’t have high hopes for the future.

However, Sports Direct has proven they’re experts at navigating the unknown. The ratings are more a reflection of the feeling that there will be hardships for the time being.

Like the Night King, Sports Direct hasn’t given us an incredible show yet but hopefully, unlike the Night King, it’ll be part of our lives for many years to come.

Assessment

Quality Score: Low

Value Score: Medium

Momentum Score: Low

 

Disclosure, Alister does not hold positions in any of the stocks mentioned.

Corporate GovernanceMarketsStock Markets

Sectigo Delivers Record Quarter of Growth Underpinned by More Than 35% YoY Enterprise Sales Increase in Q1 2019

Addition of Top Brands, Along with New Email Encryption and Digital Signing Product, Drive Sales for World’s Largest Commercial SSL Provider

Sectigo (formerly Comodo CA), the world’s largest commercial Certificate Authority and a leader in web security solutions, today announced a larger than 35% year-over-year (YoY) increase in enterprise sales during the first quarter of 2019, fueled by the adoption of the company’s Certificate Manager, Private CA, S/MIME, and IoT Manager enterprise solutions. Sectigo also kicked off 2019 with an expanded partner program, the release of its Zero-Touch Deployment S/MIME product, a new strategic IoT alliance, and receipt of numerous awards.

Sectigo’s record quarter follows a breakthrough year and a complete corporate rebrand in November of 2018. The company has experienced rapid growth since expanding beyond TLS/SSL certificates to offer solutions that protect enterprises of all sizes from increasingly sophisticated web-based threats across websites, IoT devices, internal infrastructure, and cloud services.

“After delivering a strong 2018 where Sectigo’s growth was more than twice as fast as the overall market, we have accelerated our efforts by doubling down on addressing the enterprise’s most pressing needs through product innovation,” said Bill Holtz, CEO, Sectigo.

“Enterprises are embracing automated certificate management to facilitate discovery, installation, and renewal for their vast inventories of private and public certificates across diverse use cases and operating systems. These capabilities are essential to securing our complex enterprise environments and their increasing use of virtualization, containerization, mobile devices, IoT, and DevOps. Certificate automation enables strong identity in these complex environments and protects against costly outages caused by unexpected certificate expirations,” Holtz added.

Sectigo highlights in Q1 2019 include:

Enterprise growth – Dozens of marquee brands, spanning retail to technology sectors, enlisted Sectigo as their trusted partner for certificate management. Sectigo Certificate Manager provides enterprises with complete visibility and lifecycle control over any public and private certificate in its environment all from a single portal.

Product innovation – In February, Sectigo introduced the industry’s first Zero-Touch S/MIME solution to combat business email compromise (BEC) and other spear phishing attacks and increase compliance with regulations like HIPAA/HITECH, GDPR, and the U.S. Department of Defense’s DFARS. The innovation modernizes email security and encryption by using automation to deploy digital certificates across every desktop, tablet, and mobile device in an enterprise.

Expanded IoT ecosystem – Sectigo and Kyrio, a subsidiary of CableLabs, formed a strategic alliance to provide the expertise needed for IoT projects to be designed, architected, built, and deployed with security in mind from day one. Multi-vendor ecosystems, including the Open Connectivity Foundation (OCF), CBRS WInnForum, and SunSpec Alliance, have already chosen Kyrio and Sectigo to manage their global PKI deployments.

Industry awards – Sectigo won five company awards and received three executive honors in Q1.
Cyber Defense Magazine’s InfoSec Awards – CEO Bill Holtz was named the Most Innovative Chief Executive of the Year, Sectigo Certificate Manager earned the Hot Company Identity Management Award, IoT Manager was selected for Publisher’s Choice IoT Security, and Zero-Touch S/MIME won the Next-Gen Deep Sea Phishing Award.
2019 Info Security PG’s Global Excellence Awards® – Sectigo IoT Manager was awarded bronze in the New Product or Service of the Year category, and CMO Jonathan Skinner won gold for Marketing Professional of the Year.
2019 Cybersecurity Excellence Awards – Sectigo won silver for Most Innovative Cybersecurity Company, and gold for Cybersecurity Marketer of the Year (for CMO, Skinner).

Channel expansion – Sectigo unveiled a revamped Channel Partner Program, enabling partners to grow into new cybersecurity market segments. By teaming up with Sectigo, resellers develop their product portfolios and learn best practices for optimizing the customer experience. After collaborating with Sectigo, ICANN-accredited registrar Uniregistry, saw 53% of users who expressed interest in their UniSSL products complete purchases.

Thought leadership – Sectigo launched Root Causes: A PKI and Security Podcast to frame public conversations and discuss key issues, breaking news, and major trends in digital certificates and PKI. Co-hosted by Sectigo industry veterans Jason Soroko and Tim Callan, Root Causes is now live on iTunes, Spotify, Google Play, SoundCloud, Blubrry, and Stitcher.

Markets

Atradius Announces Top Five Promising Emerging Markets

Leading trade credit insurer Atradius has revealed its most promising emerging markets for businesses.

Bulgaria, Indonesia, Vietnam, Peru and Morocco have been shortlisted within the Promising Emerging Markets Economic Research Report as having the most potential for new trade opportunities this year. The top five are predicted to shine in 2019 thanks to their strong growth prospects and limited vulnerability to global headwinds. They boast a mix of trade diversification, strong investment growth and dynamic domestic markets and offer opportunities in consumer orientated sectors as well as within manufacturing and infrastructure.

Luke Giddings of Atradius, said: “As the global economy loses steam in 2019, the risks in the traditional emerging markets are coming to the forefront. Economic policy uncertainty, a greater-than-expected slowdown in the Chinese economy and more volatile commodity prices are bringing pressure to bear. However, despite increasing global pessimism and uncertainty, there are still bright spots for global trade.

“We have identified a number of promising markets that show a favourable combination of attributes to make them appealing destinations for international trade. Stable or accelerating growth, favourable business conditions, robust payment behaviour are critical factors and what’s more, the markets identified can offer growth opportunities across several sectors.”

♣ Bulgaria: The Eastern European market has a positive economic outlook, fuelled by domestic demand and fixed investment. Household incomes are increasing, supported by higher wages and low domestic interest rates which is leading to a rise in demand for exports. Opportunities for exporters are ample in the consumer durables and the food and beverage sectors. Imports have also sharply increased in the machinery sector while the chemicals sector is also well supported. In agriculture, an increased output will create higher demand for fertiliser imports.

♣ Indonesia: This ASEAN member has high and stable growth rates, underpinned by a stable political situation and strong fundamentals. Rising incomes, coupled with job growth and higher public spending should continue to underpin private consumption growth. Promising sectors include consumer durables and food and beverage. Growth in e-commerce is contributing to rapidly increasing demand in the chemicals and plastics sectors. Alongside expansion of the petrochemical and fertiliser industries, there is also significant demand for infrastructure. High construction activity for electricity and transport development will also continue to drive import growth in the machinery sector.

♣ Vietnam: With 6.7% GDP growth forecast, Vietnam has a population of more than 95 million and is home to Southeast Asia’s fastest growing middle class – representing an important market for foreign goods While it is heavily exposed to US-China trade tensions, it stands to gain from rising tariffs. Diversification of trade away from China could offer opportunities for Vietnam’s textiles sector, forecast to grow 15% this year. Vietnam’s young population with a tendency for eating out make an attractive potential market for food and beverage businesses. With robust economic growth, an upsurge in infrastructure and construction activities and strong demand for fuels across transportation, aviation, and residential sectors, Atradius also expects continued high growth in the chemicals sector, especially fuels.

♣ Peru: A stable market with a regionally high growth rate of around 4% with a government track record of prudent, business-friendly policymaking. Notable growth prospects can be found in Peru’s primary industry sector with enlarged anchovy fishing and higher hydrocarbon production expected to drive growth. The development of new mines and major infrastructure projects are boosting the construction sector. A large domestic market characterised by more than 30 million people with rising incomes and high consumer confidence gives attractive growth potential to the food and beverage and consumer durables sectors.

♣ Morocco: While the Middle East and North Africa is experiencing subdued growth, Morocco is bucking the trend with GDP growth forecast at 3.3% thanks to a cyclical upturn in agricultural production, as well as stronger non-agricultural growth, especially in the manufacturing sector. With close proximity to European markets and heavy investment, the export-oriented manufacturing industry – especially automotive – has high growth potential. There is also strong potential in the growing tourism industry; supporting travel and supportive industries such as food and beverage and services. With good infrastructure, Morocco’s energy sector is also seeing strong growth, with potential opportunities for imports – with targets to significantly increase its reliance on renewables.

Luke Giddings continued: “With intelligent insights and experts on the ground around the world, Atradius is well equipped to help businesses spot the opportunities for international trade as well as mitigating the associated risks. We act as a trade partner for businesses, facilitating trade and supporting sustainable and robust business growth.”

For more information on Atradius, visit www.atradius.co.uk or follow @AtradiusUK on Twitter and AtradiusUK on LinkedIn


Cash ManagementFinanceFundsMarketsRisk Management

TOP RANKINGS FOR ASHFORDS LLP IN PITCHBOOK’S GLOBAL LEAGUE TABLES

Ashfords has again been ranked as one of the most active law firms globally in venture capital. The firm has been ranked 2nd in Europe for 2018 by PitchBook, which provides a comprehensive ranking of private equity and venture capital activity worldwide.

Ashfords is the only independent UK law firm to appear in the top five most active firms in Europe and has been placed in the top 5 in each of the past eight quarters.

PitchBook’s global review details top investors by region, firm headquarters, as well as the most active advisers and acquirers of PE-backed and VC-backed companies.

Chris Dyson, Partner and Head of Ashfords’ technology sector, commented: “Ashfords’ recognition in this prestigious league table confirms the team’s position as a leading venture capital practice in Europe. The team has deep expertise in this area and are very proud to work alongside many leading investment funds and growth companies.”

Deals the firm completed globally in 2018 include advising:

Notion Capital, Eden Ventures and BGF Ventures on the $350m sale of NewVoiceMedia to Vonage

Form3 on its investment from Draper Esprit, Barclays and Angel CoFund

Fluidly on its investment from Nyca Partners and Octopus

Anthemis on its investment in Realyse

Simply Cook on its investment from Octopus

WhiteHat on its investment from Lightspeed, Village Global, Anil Aggarwal, and Wendy Tan White

Mobius Motors on its investment from Pan-African Investment Company, Playfair Capital, VestedWorld and others

Local Globe on its investment in StatusToday

Holtzbrinck Ventures and Notion Capital on the sale of Dealflo to OneSpan

BGF on its investment in Ruroc.


Ashfords LLP
ashfords.co.uk

ArticlesBankingMarketsRisk Management

The fragile line between financial returns and social good – how much can, and should, personal values influence a portfolio and asset allocation

By Charlotte Filsell – Head of Client Relationship Management at Sandaire.

In many industries no two clients are the same. In Family Offices this is particularly evident. Every family, and every individual within that family, is entirely unique and is continually growing, evolving and shifting their needs and priorities.

This is a fascinating and complex journey to help families navigate. Where this is especially pertinent, is finding the delicate balance between financial returns and social good. As such, it’s incredibly important that families have access to delicate guidance and careful stewardship, so they can find the right balance to match both their values and their long-term needs – and to match their individual and familial priorities.

As families navigate a generational wealth transfer to the younger generations, social good and impact investing becomes more apparent. There is undoubtedly an increasing trend from the younger generation, to go beyond a simple financial transaction or donation to worthy causes. When it comes to using their wealth, millennials tend to be more concerned about making their money go further, making a larger impact, and are interested in finding sustainable interventions and solutions. Differences certainly exist across generations, but what unites family members, is the motivation to make the world a better place.

In philanthropy, this can be reflected in a desire to learn about an issue and understand the nuances in order to direct effort and resources as effectively as possible. To achieve this effectively, it’s crucial to work closely with clients to assist with their philanthropic endeavours, including helping to find causes that are important to them and guiding on how they might be able to make a positive contribution. In addition to this, connecting clients to other families in the same situation, or perhaps further along the philanthropy journey, allows them to share ideas and experiences, and apply these to their own particular investment desires.

In no small part because this is such a personal yet complex issue, families are increasingly looking for advisers who not only understand the intricacies of the financial and investment landscape, but who have a thorough grasp on the values and philanthropic intentions of the client. This can make a huge difference. It’s incredibly important to provide thoughtful guidance and careful stewardship to help families strike the right balance. This can take many forms – an effective family office must shift with the needs of the families it serves and take on the role that’s required – whether that’s a leader, a partner, a facilitator, or a mediator.

The trend towards Socially Responsible Investment (SRI) has led to the integration of environmental, social and governance (ESG) factors into investment decisions. The development of SRI and impact investment is offering the prospect of achieving returns measured in more than merely financial terms; it is embedding values and responsibility into investment decisions. While many businesses may have long been delivering more than financial returns, social and impact investing is bringing intention to the fore in investment selection and outcome measurement into the evaluation of success.

The crucial role of the family office is to help steer the families we serve through this fascinating and complex process, developing a successful wealth plan that futureproofs their wealth, whilst satisfying their philanthropic interests and passions. Although a fragile line, we believe that a portfolio can satisfy both financial return objectives and positive social impact that reflects a client’s personal values, acknowledging that a balance will need to be struck depending on the needs of each individual client.  

Cash ManagementMarketsRisk ManagementTax

Top tips when it comes to completing your self-assessment tax return

The time of year is almost upon us where millions will have to complete their self-assessment tax return. Whether that’s as a sole trader, a freelancer, a contractor or running your own businesses, anyone who works for themselves will have to complete their forms before the annual January 31 deadline. For many, it can seem like a daunting task, so is there anything you can do to make the process easier?

 

 

James Foster, Commercial Manager at specialist accountancy provider Nixon Williams

At Nixon Williams, we manage a large client base of small businesses, contractors and self-employed individuals, which means we complete thousands of tax returns each year. This experience has provided us with an in-depth knowledge of the process and how to maximise efficiency when it comes to completing a self-assessment tax return submission.

 

The majority of the working population have their tax deducted at source from the company that they work for, however, anyone that is self-employed has to complete a self-assessment tax return in order to be taxed appropriately on their earnings by Her Majesty’s Revenue and Customs (HMRC).

 

When you start working for yourself, your workload includes everything that you might need to do to make your business a success – from marketing and advertising to admin and ordering stationery. You may find that managing your finances is more complex than you might have expected as you will need to keep records of all the money you spend in the running of your business, as well as how much you earn. Many people decide to use the services of a professional accountancy firm like ours to help them through the process, but some decide to manage everything themselves. Either way, there are some simple things you can do to make the process as straightforward as possible, so here are my top five tips:

 

  • Get organised – compiling all your invoices and receipts ahead of time is the best way to alleviate last minute stress when it comes to self-assessment forms. Ideally, you’ll have kept some form of spreadsheet or an online portal up to date throughout the year of your accounts, and you can use that to finalise your tax return. But if that’s not the case, don’t wait until the very end of January to get started. There are often missing pieces of information you’ll need to track down, so give yourself plenty of time to work through everything. And don’t forget – if it’s your first time completing your Self-Assessment Tax Return, make sure you’re registered with HMRC in time.    

 

  • Know the key dates for completion – If you decide to complete your tax return online then the deadline for this is any point up until the 31st January, whereas a paper tax return needs to arrive with HMRC by the 31st October the previous year. If you haven’t sent an online tax return before then you will need to register and HMRC advises you to do this no less than 20 working days before the deadline.

 

  • Separate your work and personal bank account – a number of self-employed people operate with just one bank account for personal and business use, but this can make it hard to separate out your business expenses from your personal expenses. It’s often easier to identify which costs are related to your business by having a separate business bank account. This will not only help you keep a track of your business expenditure throughout the year, but it will make your life a lot easier when it comes to your tax return.
  • Know the expenses and tax reliefs that you can claim – if you are a sole trader, for example, make sure that you know the expenses that you can claim in your tax return, as there may be some items you might forget about such as business mileage and expenses relating to working from home. It’s also beneficial to know about other tax reliefs that you are entitled to such as personal pension and gift aid payments.

 

  • Tax returns can be complex so use an accountant – having professional support can be really beneficial because an accountant should not only assist with the compliance side of things (i.e. helping you to file your tax return on time) but they will also give you pro-active advice where appropriate.  Tax returns are something most accountancy practices deal with on a daily basis from April to January, alleviating a lot of the financial stress away from clients and helping them to focus on what they do best – making a success of their business.

 

Running your own business and managing the many tasks that come with it can often push your tax return submission to the bottom of your ever-growing pile of work to do – but help is always available from professionals with the right experience and knowledge of the latest legislation. You can find further information on completing your self-assessment tax return on the Nixon Williams website here.

Cash ManagementForeign Direct InvestmentPrivate FundsStock MarketsTransactional and Investment Banking

Can You Predict The Future Price of Bitcoin?

You can’t spend five minutes reading about cryptocurrencies without stumbling across at least one prediction for the future price of Bitcoin.

Across forums, social media, newsletters, blogs, news sites and every other corner of the internet — financial analysts, expert investors, bankers, tech icons, and new enthusiasts offer up their views.

Some cite careful analysis, some base it on past trends. While others are guessing or acting on their ‘intuition.’ Their predictions are varied, ranging from a plummet to zero, to millions.

With all this noise surrounding the Bitcoin price, you might be wondering whom to believe. Or if you should believe anyone at all. Is it possible to predict the future?

Investing begins with education, not buying. So it’s important to think about the information you base your buying decisions on.

How do people make price predictions?

There are two types of analysis used for predictions: fundamental and technical.

They’re used for everything from the stock market to Bitcoin. While other types of analysis do exist, these are the main ones.

Fundamental analysis

Fundamental analysis is all about intrinsic value. You look at the factors that give something value, then decide if it’s under or overvalued. Publicly traded companies release lots of information to help with this. So, for a stock you might look at a company’s:

  • Revenue (how much money it’s making)
  • Profit margins (how much of the revenue is profit)
  • Growth potential (how much money it could make in the future)
  • Management (how competent the people in charge are)

Some of these factors can be defined in numbers. Others come down to the judgement of the analyst.

For a cryptocurrency, you might look at its:

  • Price growth (how the price has grown over time)
  • Scalability (if it has the potential to keep growing)
  • Security (if the network is secure and safe from attacks

​Technical analysis

Technical analysis is different as it focuses on an asset’s price, not the asset itself. Maybe you’ve heard the phrase ‘past performance is not an indicator of future performance.’ But technical analysis bases future predictions on the past. This can be based on a short time frame (hours or even minutes) or long (months or years.)

To do this, you look for patterns and trends in price charts, such as:

  • The average price over a chosen time span
  • The price at which a lot of investors start buying
  • The price at which a lot of investors start selling
  • The overall price trend

Do fundamental and technical analyses work?

There’s no straightforward answer to that question. Both techniques can be useful, but they also have their limitations for cryptocurrencies.

Fundamental analysis works when investors base their decisions on fundamentals. This isn’t always the case for Bitcoin. Many investors base their decisions on the decisions they expect others to make.

Technical analysis assumes that a market follows rational rules and patterns. It’s less useful for cryptocurrencies because the market is still young. There isn’t as much past data to analyse. Cryptocurrencies also have less liquidity than something like stocks.

Self-defeating and self-fulfilling prophecies

When we talk about price predictions, we run into an important concept: self-defeating and self-fulfilling prophecies.

Making a prediction about the future can end up changing what actually happens.

The prediction about the future creates the future.

This isn’t the case when we talk about a system like the weather because we can’t change it.

But when you make predictions for a system involving people, it’s different.

Hearing predictions can cause people to change their behaviour.

Sometimes this happens in a way that prevents the prediction from coming true — a self-defeating prophecy — or it can cause the prediction to come true — a self-fulfilling prophecy.

Predictions about cryptocurrency prices have the power to influence how investors act. If it’s predicted the Bitcoin price will increase, this encourages more people to buy. This can drive up the price, and vice versa.

That brings us to incentives.

The issue of intentions

Incentives are what motivate people to do what they do. It’s an important concept in investing. Financial gain is a powerful driving force.

Most investors understandably want to do whatever will make them the most money. This can include making predictions that benefit them.

Let’s say you come across an article where the author claims Bitcoin will be worth $100,000 by December 1st 2019. Rather than taking that at face value, it’s important to ask: why are they saying this? If they know for certain, why don’t they put all their money into Bitcoin, and make a huge profit? Why are they sharing that information?

Likewise, if someone claims Bitcoin will drop, you might wonder why they’re saying that. If they know for certain, why don’t they keep quiet, short it, and make a big profit?

In both cases, we need to consider the underlying incentives.

If someone stands to profit from the Bitcoin price increasing, it’s natural they’ll predict it’s going to do that. They’re hoping this will turn into a self-fulfilling prophecy. If someone stands to benefit from it decreasing or to suffer if it increases, it’s not unexpected that they’ll predict it’s going to decrease.

Luck and probability

But if no one can predict the future, how come some people do make correct predictions?

Maybe you heard that your brother’s roommate’s cousin’s coworker’s uncle correctly predicted the price of Bitcoin. Or you’ve seen someone on Youtube who seems to always get it right.

The fact that no one can predict the future doesn’t mean no one can make correct predictions.

It comes down to luck, probabilities, and information asymmetries.

First, luck. Every day, thousands of people make predictions about Bitcoin prices. It’s inevitable that some of them will be correct by luck.

As they say, even a stopped clock is right twice a day. With so many people making predictions, it’s likely a percentage of them will be correct.

When professional forecasters make predictions, they usually base them on probabilities. What’s the most likely outcome? A weather forecaster might say it’s going to rain tomorrow because there’s a 62% probability. They don’t know it for sure. It’s just more likely than not.

Then there’s insider information. If you know something most investors don’t, you have a big advantage. For example, if you have insider information that Apple is about to release a new product, it’s reasonable to expect the stock will go up. But other investors buying Apple stock aren’t aware of that information, so they can’t predict it.

Insider information is less meaningful for cryptocurrencies. There’s a less direct link between fundamentals and prices. Events that seem like they should cause an increase or decrease can do the opposite or nothing.

Conclusion

The next time you look at a cryptocurrency price chart, imagine a crowd of people in a stadium, all moving at different times but appearing to create an organised rippling motion. Because that’s what you’re seeing: the combined actions of many people.

There’s no mystical, secret order to it. There’s just lots of people making decisions based on the information they receive.

FundsMarketsRegulationWealth Management

FTI Consulting Resilience Barometer Sheds Light on Lack of Business Preparedness

At this week’s World Economic Forum (WEF) in Davos, FTI Consulting launched their inaugural 2019 Resilience Barometer which explores how G20 companies are tackling an interconnected, technologically disrupted and increasingly regulated world. Astonishingly, the report has found that whilst companies anticipate challenges, such as cybersecurity and data, they remain largely unprepared.

 

In an age categorised by the WEF as “The Age of the Fourth Industrial Revolution” (4IR), it is more important than ever for G20 companies to be instrumental in supporting societies and governments navigating unavoidable uncertainty and volatility. FTI Consulting’s new report outlines the key challenges we face as we move into 2019 by investigating company preparedness to 18 scenarios which could have a negative impact on turnover, value and reputation.

 

Highlights of the report include:

  • The resilience score for the G20 is only 40 points (out of a top score of 100 points) and turnover has been lowered by an average of 5.1% over the last 12 months, a major cause for concern in an environment that is growing more and more challenging.
  • We have found that the biggest threat to resilience in 2019 is that of ‘cyber-attacks stealing or compromising assets’ and 30% of companies we surveyed said this had happened to them in 2018. Yet whilst 28% of business leaders predict that this will occur to them over the next year, just 45% say that they are taking proactive steps to manage this risk.
  • 87% of companies expect a major crisis in 2019, yet only 4 in 10 are very confident in their ability to manage such a scenario.
  • One-third (1/3) of companies acknowledged that they are not doing enough to keep their data safe.

Kevin Hewitt, Chairman of FTI Consulting EMEA region explained that: “This report looks to identify and unpick the challenges, and opportunities, that companies are facing today as they manage risk and enhance their corporate value. More must be done to ensure sufficient infrastructure and processes are in place to proactively manage business threats in 2019. With significant expertise and experience, FTI Consulting is well placed to help businesses effectively respond in an effective and efficient way.”

 

Following the launch of the FTI 2019 Resilience Barometer, FTI Consulting will be attending the WEF in Davos this week and are available for more in-depth analysis of these results and how FTI Consulting can help your company build resilience and protect value in the face of challenges brought about by the 4IR.

BankingHedgeMarkets

Alternative SME finance provider Capify secures £75 million credit facility from Goldman Sachs

Capify, a leading alternative SME finance provider in the UK, has secured a £75 million credit facility from Goldman Sachs Private Capital (“Goldman Sachs”) to support its future growth plans and provide working capital to thousands of British SMEs over the coming years.

 

The Greater Manchester-based fintech company will use the new facility to accelerate the growth of its lending business to UK SMEs through its merchant cash advance (MCA) and business loan products. 

 

Capify has been active in the UK since 2008, executing over 9,000 transactions for UK SMEs seeking working capital for their business. Since inception, Capify has helped deliver £150 million in business loans and merchant cash advances in the UK.

 

“This is a landmark achievement for Capify and we are very pleased that we have secured this financing with Goldman Sachs, one of the premiere capital providers in the world,” said David Goldin, Founder and CEO of Capify.

 

“This new multi-year credit facility allows us to deliver on our own growth plans, whilst providing much needed access to capital for UK SMEs to help them to grow, to boost the economy and to create jobs.”

 

“The credit facility validates our company as a leader in the marketplace and underlines the strength of our business model to provide simple, affordable and smart financial options to UK SMEs.”

 

Pankaj Soni, Executive Director at Goldman Sachs Private Capital, said: “Capify is one of the leading SME finance providers in the UK. We have been impressed with the management team, business model and innovative finance solutions for SMEs. We look forward to supporting their growth in the years ahead.”

 

“We are extremely excited about our future relationship with Goldman Sachs,” added John Rozenbroek, Chief Financial Officer at Capify. “The credit facility will enable us to continue on our growth trajectory while offering even more attractive and innovative solutions to thousands of small businesses in need of capital.”

 

David Goldin, Founder and CEO of Capify.

Derivatives and Structured ProductsWealth Management

Ted Baker partners with Kickdynamic to drive customer engagement with live, automated and personalized email marketing content.

Global lifestyle brand, Ted Baker, has implemented Kickdynamic’s technology to transform its email marketing and achieve its goal to deliver true one-to-one personalization.

 

Ted Baker, the quintessentially British brand famed for its quirky yet commercial fashion offering and unique, playful storytelling, has partnered with Kickdynamic to offer live, automated and personalized email to their customers. Through this partnership, Ted Baker is reducing its internal manual email build processes, increasing customer engagement and enhancing the performance of its email marketing by delivering relevant content in real-time.

 

Ted Baker has grown steadily from its origins as a single shirt specialist store in Glasgow in 1988 to the global lifestyle brand it is today. It offers menswear, womenswear, accessories and more, and has a physical retail presence in 39 of the 50 countries in which it’s available.

 

The brand has embraced the power of digital marketing, putting the customer and brand experience first in everything it does and its creative freedom allows it to create content that sets it apart from its competitors.

 

 “Our partnership with Kickdynamic allows us to talk to our customers in a targeted, relevant and personal way, at scale and in real time. We have reduced the time it takes to design and build personalised email content, allowing my team to focus on delivering surprising and delightful customer experiences, instead of cumbersome, frustrating and restrictive processes.” Claire Holden, Head of Customer, Ted Baker.

 

“1-2-1 personalization in marketing and especially email has been talked about for a long time. It is not secret that it works, however the manual process of building email has been a long-standing barrier. We are excited that Ted Baker is embracing Kickdynamic technology to remove this manual barrier and move to automation to achieve their email personalization goals.” Matt Hayes, CEO, Kickdynamic.