Tsipras to present new proposal at Eurozone summit

Miranda Wadham
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Tsipras to present new proposal at Eurozone summit
Greek Prime Minister Alexis Tsipras is expected to present a new proposal at the Eurozone emergency summit later today. This comes after the Greek people rejected the deal that was already on the table in a referendum on Sunday, despite being warned it was the ‘final deal’ Europe’s leaders were prepared to discuss. Tsipras’ new plan is set to include a demand for debt to be cut by 30%, and a discussion on debt restructuring. The Prime Minister has been urged to make “serious proposals”, as Greece faces an exit from the Euro.      

Oil hit by Greece, China

UK Investor Magazine
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Oil hit by Greece, China
Brent Crude broke beneath $60 per barrel today as Greek and Chinese fears hit sentiment. Greece again was the source of investor woes and risk assets were unilaterally sold off as Greeks voted no in yesterday’s referendum. “All signs point south for oil prices,” Capital Economics said in its Monday note. China, the world’s second largest consumer of oil has suffered huge uncertainty in its stock markets which is filtering through to the wider economy. Efforts by the authorities have failed to stabilise prices and fears are that they may be powerless to control a domestic crisis. China “is a huge cause for concern and as such can’t be bullish for oil,” said Tamas Vargas, an analyst at PVM brokerage in London Brent oil traded down at $58.44 in London afternoon trading.

What next for Greece?

UK Investor Magazine
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What next for Greece?
The Greek people have made a stand and rejected further austerity measures from its government after voting no in yesterday’s referendum. The Greek government hoped that the referendum would give them a better position in talks with creditors but European officials have thwarted any optimism of a quick deal. ECB’s Nowotny said this morning that a deal in the next two days was “illusory.” Not what Tsipras would have liked to have heard. In fact, as opposed to yesterday’s referendum cementing the Greek government, it appears to have unnerved some of the leading figures. Greek Finance Minister Varoufakis resigned early this morning, a move he said he would make in the case of a yes vote. The surprise announcement was met by a move higher in the Euro currency as investors looked forward to his replacement taking a softer stance on the relationship with creditors and a possible deal. A deal, however, seems just as far away as it was on Friday. Greece are in dire need of taking serious action. EU officials have again reiterated their conditions; Greece needs to make deep structural changes to welfare and taxes to secure the next tranche of aid. The Greeks on the other hand, are pushing for a haircut to their debt mountain, something that some officials are saying is not going to happen. The deadlock continues and the referendum has done nothing to ease tensions. The next moves by individual players are going to be key in how this crisis plays out. The actions by the ECB will be pivotal to Greece’s ongoing inclusion in the Eurozone. Greek banks a heavily reliant on liquidity provisions from the ECB, if these are halted Greek banks will quickly drain and collapse. If the ECB withdraws support, it is likely to be the beginning of the end for Greece and their time in the Euro. There are many payments Greece will have to make in the coming weeks, but the most important and one most likely to shape Greece’s future, is the payment due to the European Central Bank 20th July. If this payment is missed the ECB will be forced to reconsider ELA, a possible catalyst for Greece’s exit. Ratings agency S&P have issued a note saying the chance of Greece leaving the Euro is now higher than them staying in. This sentiment has been echoed by many investment banks.  

Heineken and Carlsberg fight for Myanmar

Miranda Wadham
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Heineken and Carlsberg fight for Myanmar
Multinational beer companies Carlsberg and Heineken are fighting to expand into Myanmar, as some of Europe’s largest brewers turn to far-flung parts of the world for growth. Myanmar has huge potential, with 80 percent of the adult population drinks beer solely produced by Myanmar Brewery, a company linked to the country’s former ruling military. After decades of isolation, the country is beginning to warm to consumerism, and has opened up its borders and begun to welcome tourism. Beer sales in Myanmar rose 14 percent to $265 million between 2009 and 2013, and are forecast to reach $675 million by 2018, according to Euromonitor. Myanmar is showing strength as an emerging market and both Heineken and Carlsberg consider now to be a good time for expansion. Heineken are no stranger to emerging markets; in 1991 they made a profitable move into Vietnam, which is now their third largest market. “The calculated risks Heineken takes in emerging markets are an important part of the company’s future growth,” said Leo Evers, head of Heineken’s business in Vietnam. Heineken shares fell 0.7 percent to 67.60 euros at 12:21 p.m. in Amsterdam, trimming this year’s gain to 15 percent.  

Greek Finance Minister resigns after Sunday’s referendum

Miranda Wadham
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Greek Finance Minister resigns after Sunday’s referendum
Yanis Varoufakis, the Greek Finance minister, has resigned after yesterday’s referendum. This comes just hours after he vowed that, should the Greek people vote no, he would remain in power and campaign for a better bail out deal for Greece. In a statement, Varoufakis said he believed that his resignation would help Greece come to a solution with their EU creditors. He has repeatedly clashed with many of the leading Eurozone Finance Ministers. Greece have officially voted to continue negotiations with Europe rather than accepting the current proposal, despite being warned that it may well lead to their exit from the euro. Greek banks remain on the brink of collapse as the ECB meet this week to discuss whether to send emergency funds.  

Rolls Royce sink 9% after third profit warning

UK Investor Magazine
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Rolls Royce sink 9% after third profit warning
Rolls Royce shares sank 9% after it announced its third profit warning and scrapped a £1 billion share buyback programme. In a release to the market this morning, 131 year old Rolls Royce lower its profit guidance to £148 million for this year, down from £155 million. The engineering firm saw weakness across most units with Civil Aerospace taking a £300m hit as demand for its Trent 700 product experienced slower sales. The Marine division also saw losses but to a lesser extent than Aerospace. The management have seen it appropriate to discontinue the remainder of a £1 billion share buy programme following the disappointing results. Rolls Royce have attributed their poor performance to oil price volatility and uncertainty at large customers such as Airbus. “Our immediate priority is to find the performance improvements needed to deliver these goals and ensure that this world-class business continues to meet the needs of its customers and shareholders alike,” said Warren East, Chief Executive of Rolls Royce. The fall has been met with a report from the FT who are speculating that the cheap shares may be too hard to resist for a predatory firm. Rolls Royce shares are down 19% over the last year.

Key Greek payment dates

UK Investor Magazine
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Key Greek payment dates
The Greek have voted to reject further austerity measures which is likely to prolong a possible aid package from the Troika. It is therefore important to note the upcoming payments Greece is facing as market pressures are likely to increase in the run up to these events if no deal is struck. These payments are in addition to the EUR 1.6 billion already owed to the IMF. 10th July EUR 2bn T-bill redemption 13th July EUR 500m IMF loan redemption 16th July Governing Council monetary policy meeting of the ECB in Frankfurt 17th July EUR 1bn T-bill redemption 20th July EUR 4bn ECB held government bond redemption 1st August EUR 200m IMF interest payment 7th August EUR 1bn T-bill redemption 20th August EUR 3.5bn ECB held government bond redemption (Source: Reuters, Bloomberg, ECB)

Stock markets set for significant losses after Greek vote

UK Investor Magazine
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Stock markets set for significant losses after Greek vote
The Greek people have given their verdict. They will not be bullied by the Germans and the rest of Europe and have voted ‘no’ in the referendum on whether to accept further austerity measures. Some have said a no vote is effectively a vote to leave the Euro as Greece loses protection from the European Central Bank. The Greek government believed that by confirming their mandate from the Greek people they will strengthen their negotiating position with creditors. “The government now has a strong mandate, a strong negotiating card, to bring a deal which will open new ways,” said Labour Minister Skourletis They may, however, be horribly mistaken. Mixed reports throughout the day have suggested that the Germans and French were not rushing back to talks tomorrow as Tsipras would have liked. Tsipras may have planned to jump back to the table and broker a fresh deal with creditors. He will be extremely disappointed to hear that one euro zone official has said to Reuters, they “would not know what to discuss.” The uncertainty created by the void may be enough to tip Greek banks over the edge as deposits continue to decrease and support from the ECB wanes. Major futures markets remain closed, but UK spread betting firms have given early indications of tomorrow’s opening prices. It’s not pretty. IG are quoting the following prices. IG Greece Markets plummet After many weeks of talk about a potential accident, we may now have it.

Finance Kitchen cooking up a storm in independent hospitality funding

UK Investor Magazine
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Finance Kitchen cooking up a storm in independent hospitality funding

Finance Kitchen’s mission is simple; to be London’s number one provider of funding to the independent food and drink market.

Founder Ian Woodley has been involved in financial services since leaving school, and after a number of years operating a successful business recovery company has turned his hand to supporting independent organisations in the hospitality sector.

Finance Kitchen has begun operating at a time when consumers are becoming savvier and changing their shopping habits.Supermarkets are being shunned for independents and pop-up outlets are the destination of choice for trendy Londoners.

Ian describes Finance Kitchen as a “one-stop shop” for businesses seeking financing opportunities in the hospitality sector. Whether an organisation is issuing equity or debt in return for capital, Finance Kitchen will act as an intermediary.

Finance Kitchen works with businesses ranging from pop-up casual food outlets to Michelin Starred chefs. The amount of capital required by businesses in partnership with Finance Kitchen ranges from £200,000 to £2,000,000.

One of their current investment opportunities is Tubby Isaacs, the iconic east end brand who are relaunching a chain of seafood based bars. Known for their Aldgate stall, Tubby Issacs is aiming to raise £950,000 to fund their first site in Shoreditch. Their plan is to roll out up to 5 seafood bars in London in the first couple of years.

“We are about Food, Finance and London” says Ian, this proposition ticks all three boxes.

Tubby Issacs is typical of the businesses Finance Kitchen raises funds for, those that warrant substantial investment but fall under the radar of private equity houses who focus on already established businesses.

The opportunities on offer are not limited to outlets and restaurants; Finance Kitchen is working with low calorie Champagne brand Skinny Fizz who need to raise £300,000 to fund expansion. Skinny Fizz is currently on sale in Selfridges and a couple of high end London restaurants but wants to go national.

Finance Kitchen fills a gap for the independent food sector left by private equity houses who tend to favour larger chains.

However, such businesses have found they are gaining more traction in the army of investors who seek opportunities on crowdfunding sites.

While Ian has strong links to crowdfunding channels, he has opted to utilise his existing network of investors to raise capital, occasionally a mix of the two is needed.

He points out that although there are many successful projects funded by crowdfunding websites, such channels may not have the long term benefits that can be achieved by working with a handful of focussed investors.

Ian is also busy deal-making with new networks of investors who can offer higher flexibility for businesses and keep their projects under wraps before they launch.

The investors that Finance Kitchen work with tend to be more sophisticated than those of the well-known crowdfunding websites, who will take as little as £500 from investors in order to fully fund a pitch. Finance Kitchen will take minimum investments of around £30,000-£50,000 and seeks to fund some opportunities from a single investor.

“The majority of investments qualify for SEIS or EIS so there are some very attractive tax treatments for individuals who support new and growing businesses, the food business is also a load of fun so you get a return on your investment with a smile on your face” says Ian.

Fund managers predicted Greece likely to default, but not exit

Miranda Wadham
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Fund managers predicted Greece likely to default, but not exit
A new survey by Bank of America Merril Lynch has found that nearly half of fund managers believed Greece could default, but do not think it likely that that a Grexit will occur. Of over 200 fund managers surveyed, only 15% believe that the Greek talks will end with Greece exiting Europe, compared to 42% who rightly predicted that Greece will default on their payments. Pictet Wealth Management economist Jean-Pierre Durante argues that default does not necessarily mean Grexit. He says: “It is not in anyone’s interests for Greece to leave the eurozone. For Greece, it would mean widespread bankruptcies. For the remaining eurozone members, the fact that a precedent of exit had been established would probably lead to a permanent upwards re-pricing of their sovereign debt. For both sides, it would be a very risky leap into the unknown.” In an interview with Fundweb, Rowan Dartington Signature’s Guy Stephens agrees with the fund managers that had a positive outlook for Europe for the near future, though thinks it is clear we might see a period of market uncertainty in the short term. “[If Greece defaults] that will cause a short period of uncertainty and nervousness, but it is likely to be an isolated situation from which the rest of Europe can move on from.” Greece defaulted on the 1.6 billion euro loan from the IMF on Tuesday, and now face a referendum to decide whether to accept Europe’s bailout proposal. Greek PM Alex Tsipras insists that voting no to the EU’s offer will not lead to a Grexit; however, European leaders have made it clear that, if the proposal is not accepted, it is very likely that Greece will be leaving the euro.
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