Protests rage as Greek government passes bailout proposal

Miranda Wadham
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Protests rage as Greek government passes bailout proposal
The Greek parliament has approved a stringent bailout programme, thanks to the votes of the pro-European opposition. The vote took place amongst some of the worst political violence Greece has seen this year. As the debate raged, protesters threw petrol bombs at police, who responded with tear gas. Prime Minister Alexis Tsipras won the vote, with 229 MPs voting yes, and just 64 voting no. Athens has now given the green light for the plan to go ahead, meaning the eurozone should finalise a $7 billion loan today and permit banks to reopen after nearly three weeks closure. However, Tsipras himself didn’t fare well, after 40 of his own MPs voted against the plan saying they weren’t prepared to support measures that they promised they would stand against. Prominent No voters included energy minister Panagiotis Lafazanis, former finance minister Yanis Varoufakis and Parliamentary speaker Zoe Konstantopoulou. Tsipras is clinging onto power for now, and a cabinet reshuffle is to be expected in the next few days. All 28 EU countries are expected to contribute to the bailout, including reluctant non-euro members Britain and the Czech Republic, after a compromise was found and their contributions were promised to be ring-fenced by euro funds.

Greek Parliament continues to debate deal

Miranda Wadham
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Greek Parliament continues to debate deal
Greek MPs are debating the bailout deal offered by the EU containing harsh austerity measures, which must be approved by the end of the day if it is to go ahead. Although Prime Minister Alexis Tsipras has stated that said he does not agree with the deal, he has urged MPs to pass the deal through. With help from the opposition, he vote is expected to pass successfully; however, some hardliners in the ruling left-wing Syriza party are likely to vote against, and the junior coalition party has offered only limited support. The bailout was agreed in Brussels on Monday by eurozone members after months of negotiations.

The end is nigh – Amazon is coming

Miranda Wadham
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The end is nigh – Amazon is coming
Today, Amazon turns 20. When it first started out, stories of large companies taking over the world via the internet were the stuff of sci-fi movies, with a ‘Back to the Future’ kind of unbelievability – 20 years on, however, they are alarmingly close to the truth. Nicknamed the ‘Gang of Four’, Amazon, Google, Facebook and Apple have spread their tentacles further than anyone could have imagined. Google log everything you are curious about, Apple know your location every minute of the day and Facebook knows exactly who your ex’s new girlfriend is, because you’ve stalked her so often that they are now suggesting you add her as a friend. Yet still, these companies are continuing to expand. Not content with being the leading e-retailer in the US, specialising in media and electronics, Amazon has now decided to expand into food delivery. From a consumer’s point of view, this may seem like a good thing – who wouldn’t want to One-Click order a curry at the same time as buying their husband’s birthday present? However, Amazon’s decision will be met with fear by many smaller companies. Much like a large predator encroaching on their turf, for many small businesses, it could mean death. One such company is Just Eat, who have thrived since floating on the London Stock Exchange last year. Just Eat is based on the idea of helping independent restaurants thrive in a world dominated by chain restaurants – in order to stay competitive against the big chains, they willing to give up a chunk of their revenue to a tech-savvy middleman who can channel more food orders. Sadly, however, it seems that Just Eat’s time in the limelight is unlikely to last in the face of growing big company dominance; if Amazon and Google decide to expand into an industry, there simply isn’t room for anyone else. “Just Eat is riding high on a theme that has now fully run its course,” said Cyrus Mewawalla, a London-based analyst at CM Research, who recommends selling the stock and ranks it the 6th most expensive among 41 e-commerce companies his firm tracks globally. “Within five years you’ll be able to order a hamburger through Amazon and have it delivered to your front door.” To me, this seems a shame. Just Eat has gone from a Danish basement startup to the London Stock Exchange over the past decade; only to be shot down by a larger company as it gets into its stride. Amazon has a history of gaining control of industries that it moves into; it has already used its vast influence to almost annihilate the publishing industry, paying authors so little for their books that they are forced to turn to crowdfunding sites like Unbound just to make a living. Clearly, the same can be expected of takeaway food. Amazon will use their influence to drive down prices at participating restaurants so that they barely break even; but with the potential of Amazon’s large customer base, they just can’t afford not to take part. Having a world market dominated by a select few companies, we risk creating a monopoly that crushes entrepreneurial spirit and kills competition needed for a healthy economy. Who in their right mind would set up a business to compete against Amazon, with their impossibly low costs and impressive logistics? No one, I should imagine; and therein lies the problem. If things continue as they are, it is no exaggeration to say that the ‘Gang of Four’ may well have the opportunity to rule the world.   Miranda Wadham

Ten Stock Analysis Ratios used by the pros

UK Investor Magazine
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Ten Stock Analysis Ratios used by the pros

Are you going far enough in the analysis of your stocks?

Gain access to these 10 key ratios that are used by investment professionals day in, day out.

To give yourself an edge against the market you must dig deeper into the balance sheets, income statements and cash flows of companies to discover which ones are cheap and which ones are overvalued.

You will gain insight into vital indications of:

  • Valuation

  • Solvency

  • Leverage

  • Cash Flow

The guide you receive will detail how the 10 ratios are implemented and the formulas needed to calculate the ratios.

Each ratio has an explanation of the investment decision process and how you can interpret the ratios. These ratios will give you the ability to sift out the overvalued companies in a sector and those carrying an alarming amount of debt.

We have made a clear and concise PDF version available, you can request it to be emailed to you on the next page. Print this and keep it to hand, ready for the next time you review your portfolio.

 

View the 10 Ratios now:

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Terms & Conditions: Please view the full terms and conditions of the UK Investor Magazine before reading this guide. This guide was compiled along side investment professionals to give you the best educational experience. The document you will receive is designed to increase your knowledge and understanding but is not specific investment advice. All investments carry risk. By submitting your details you agree to be contacted by UK Investor Magazine and our partners in relation to financial information and educational tools. We accept not responsibility and will not be held liable for any losses arising from submitting your details and receiving this guide.

Janet Yellen confirms US central bank are on track to raise rates

Miranda Wadham
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0
Janet Yellen confirms US central bank are on track to raise rates
Federal Reserve Chair Janet Yellen has announced today that the U.S. central bank remains on track to raise interest rates this year. Her semi-annual testimony stated that with labour markets expected to steadily improve and turmoil abroad unlikely to throw the U.S. economy off track. However, she went on to say that measures “continue to indicate that there is still some slack in labor markets. For example, too many people are not searching for a job but would likely do so if the labor market was stronger. Although there are tentative signs that wage growth has picked up, it continues to be relatively subdued, consistent with other indications of slack. Thus, while labor market conditions have improved substantially, they are, in the FOMC’s judgment, not yet consistent with maximum employment.” She concluded that inflation continues run lower than the Fed’s objective, but “we continue to anticipate that it will be appropriate to raise the target range for the federal funds rate when the Committee has seen further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term.” Her written statement to the committee is to be followed by a hearing later.

Should I invest in fracking?

Miranda Wadham
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1
Should I invest in fracking?
As the world’s resources of oil continue to decline, fracking is the the word on everyone’s lips. However, hydraulic fracturing – the process of using water, sand and chemicals to release deep deposits of oil and gas – does not come without its difficulties. Whilst the fracking industry has taken off in the US over the past few years, here in the UK concerns over the safety and environmental effects of the process have prevented it getting the go ahead. In a report released today, it was announced that fracking could potentially be done safely in the UK under “rigorous regulation”, but it is too early to say whether it would be “a good idea”. However, the unavoidable fact is time to find newer energy resources is running out. Green energy such as wind and solar are all very well – until the wind stops blowing and the sun stops shining, as it is prone to do in England. It’s becoming clear that, with most oil plants in the North Sea set to close in under ten years, there is little other choice. The UK government backs it, the Environment Agency has granted energy firm Cuadrilla permits for exploratory fracking at two sites in Lancashire, and an attempt by a group of MPs to impose a moratorium on fracking was recently defeated. If fracking goes ahead, as it appears it might have to, Britain’s reserves of gas and oil trapped within layers of shale rock could be worth billions of pounds; generating handsome returns for early investors. But, given the uncertainty of its future, is it worth taking the risk? So far, the only company with a permit to dig in the UK is Cuadrilla, an alternative energy company that is privately owned, meaning shares cannot be bought. One of the few with shares you can buy is iGas Energy, which is listed on the Alternative Investment Market (Aim) for small start-ups. iGas is currently working on a five-year plan to develop shale gas sites in the North West and East Midlands, after a £170million deal was made with petrochemicals giant Ineos to join together in a number of shale projects. Egdon Resources is a small fish in the UK gas sea, but its intentions for growth are clear. The company nearly doubled its UK shale gas acreage by acquiring Alkane Energy’s licences in a deal funded by a £6.4m share placing. Given the difficulty finding public companies that are actually carrying out the fracking, it may be worth considering those in industries that are intrinsically linked with it. Alkane Energy has technology that could benefit from a growth of British fracking. The company has developed a generator than can convert gas into electricity; the generators are currently in operation converting methane from disused coal mines to power, but they can be transported by lorry and deployed on site at low cost. Similarly, Scottish-based engineering company Weir Group provides pumps for the US shale industry and would be well placed to supply to UK sites. The best method when investing in any area is to spread the risk – investing in funds who cover a range of companies is a good way to go. John Dodd, manager of the relatively new £80m Artemis Global Energy fund, has half of his fund in the US, including a large weighting to fracking companies including Pioneer. Jason Hollands, managing director of financial adviser Bestinvest, says: “Fracking is the big story in energy at the moment — and it’s already had a major impact in the U.S. Undoubtedly, it could become a real growth area in the UK, and that will whet the appetites of investors who like to take risks.” However, the collapse of shale gas prospects in Poland shows how unstable the industry can be. Wells were drilled and gas flowed, but the fractures in the rock quickly closed, causing gas flow to reduce to a trickle and calling a halt to operations. Without a doubt, investing in fracking at this stage is far from safe. However, the British Geological Survey estimates that there are 1,300 trillion cubic feet of natural gas trapped in shale rock beneath northern England in the Bowland shale region; if just a fraction of those gas resources are realised at today’s prices, they would be worth more than £1 trillion. Clearly, there’s real potential; if you’re prepared to take the risk, there’s a chance it could really pay off.

Royal Academy launches first crowdfunding campaign

Miranda Wadham
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Royal Academy launches first crowdfunding campaign
The Royal Academy of the Arts is set to launch its first crowdfunding campaign, in the hope that it will raise enough to bring eight ancient trees from Southern China for an exhibition. The trees are part of an installation by Chinse artist Ai Weiwei. In order to create the exhibition, Weiwei used parts of trees that died naturally on the Chinsese mountains, and were then sold as decorative pieces in the markets of Jingdezhen. He pieced the parts together in order to create eight complete trees, describing the process as “just like trying to imagine what the tree looked like”. However, the exhibition will cost around £100,000, an amount that the RA could not fund due to he short notice; so they are turning to crowdfunding platform Kickstarter to ask the public for the money to allow the exhibition to go ahead. “It is an experiment and a gamble, but a sensible one,” said Tim Marlow, the RA’s artistic director. “If it comes off, brilliant; if not then it was worth trying.” In the UK, Ai Weiwei is best known for his installation that filled the Tate Modern’s Turbine Hall with 100 million ceramic sunflower seeds. However, internationally Weiwei is well known for quite different reasons. He has had several run-ins with the Chinese government; in 2009 he needed surgery after being punched by a Chinese policeman in Chengdu, and in 2011, he was arrested without charge and held in custody for 81 days for exposing those who were responsible for the deaths of schoolchildren buried alive in the Sichuan earthquake. He is still not able to get a passport, and the RA believe it very unlikely that he will be able to come to London to see his show. The RA are hoping that, through crowdfunding, the public will be able to show their support for the artist and his work. If the campaign proves successful, Marlow said he could see the fundraising method being used again; although it is unlikely that it would become a replacement for corporate sponsorship.

Wetherspoons falls 5% after pre-close statement

Miranda Wadham
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0
Wetherspoons falls 5% after pre-close statement
J D Wetherspoon plc fell 5.9% this morning after releasing its pre-close statement for the financial year. For the 11 weeks to 12 July 2015 like-for-like sales increased by 2.9% and total sales increased by 6.5%. In the year to date (50 weeks to 12 July 2015) like-for-like sales increased by 3.4% and total sales increased by 7.6%, showing a slow in growth over the past few months. In his statement, the chairman of Wetherspoon, Tim Martin, said: “The recent government announcement regarding the “living wage” adds considerable uncertainty to future financial projections in the pub industry. The average price of a pint in a supermarket is less than GBP1 and we estimate staff costs to be around 10% or 10 pence. In contrast, a pint in a pub costs around GBP3 and staff costs are about 25% or 75 pence. Increased labour costs therefore affect pubs with far greater force than supermarkets. “This disadvantage is compounded by a huge VAT and business disparity between pubs and supermarkets, which is putting unsustainable pressure on many pubs in our industry, especially in smaller towns and less-affluent areas.  

Burberry reports drop in sales growth

Miranda Wadham
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0
Burberry reports drop in sales growth
Luxury clothing retailer Burberry fell 3.4 percent this morning, after reporting a slowdown in sales growth for the last quarter. Same-store sales at the British fashion house rose 6% in the three months to end-June compared with a 12% rise reported for the same period last year. The company were hit by a slackening demand for luxury goods in Hong Kong and other parts of the Asia-Pacific region, as experienced by the rest of the luxury sector. Chief executive Christopher Bailey said he was pleased with the growth reported in a statement. He said: “This [result] reflects our ongoing emphasis on serving our customers ever more effectively on and offline, and continued innovation in design and marketing.”

Apple Pay launches in the UK

Miranda Wadham
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0
Apple Pay launches in the UK
Apple Pay, Apple’s highly anticipated contactless payment system, launched in the UK this morning – nearly nine months after its launch in the US. The Apple Pay system allows owners of iPhone 6, iPhone 6 plus and Apple watches to pay for goods and services by touching their device on a contactless payment pad, in the same way the recently introduced contactless payment cards. Apple Pay is set to be available in 250,000 sites, including Tube stations, supermarkets and travel services.

However, HBSC missed the launch this morning, saying instead that they planned to launch the service by the end of July. The bank had been expected to begin offering the system today; yesterday the bank was listed on the Apple website as a “participating bank” .

HSBC denied that its decision not to participate at launch was last minute, saying that it had not planned to take part. Barclays – which has its own payment system – said it would be offering Apple Pay “in the future” and five other banks, including Bank of Scotland, Halifax, Lloyds, TSB and Marks and Spencer will launch in the autumn.
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