Birmingham named sixth best city for investment in Europe
PwC has recently ranked Birmingham as the sixth-best city in Europe for investment — ahead of London. For most people, the UK’s second largest city is still associated with poor post-war planning, a declining industrial base and a huge concrete ring road; however, recent developments show that this could not be further from the truth.
An influx of large businesses and commerce has boosted the economy; HSBC announced a few months ago that it is to move its head office for its retail and business lending operation, and 1,000 of its staff, from London to Birmingham. Deutsche Bank has also expanded its operations in Birmingham: it now has 1,500 people based there. The economy for the greater Birmingham sub-region grew by 2.5 per cent – the best of all the ten ‘core cities’. The Office for National Statistics (ONS) said in the latest sub-regional economic output figures for 2013 that the economy grew by 2.5 per cent, above the national figure of 1.6 per cent.
It seems that businesses are beginning to realise the benefits of the once flagging city – including how close Birmingham is to the capital (100 miles) and how much cheaper it is to set up shop outside London. The train to the capital currently takes around 1 and a half hours; however, if HS2 goes ahead — and note that its headquarters is located in Birmingham — you will be able to travel from London to Birmingham in 49 minutes. The airport has been extended and now offers direct flights to China – the only ones outside London. Birmingham is perfectly situated for business – It is within two hours of most other major UK cities, including Oxford, Cambridge, Bristol, Manchester and Leeds and 90% of the UK’s population lies within a four-hour radius.
The universities are working together to put a “strong sales pitch” to students and employers; and since 2010, Birmingham’s 20-year Big City Plan has produced a pretty good infrastructure programme. Birmingham also has a strong cultural and retail scene; since the Bull Ring was built in 2003, Birmingham was ranked third out of UK cities for retail after London and Glasgow. The City of Birmingham Symphony Orchestra (CBSO), and the renowned Birmingham Royal Ballet are based there, and several leading art galleries and theatres; it also has the Highest number of Michelin starred restaurants in England, after London.
What was once a declining industrial town has undergone a transformation – and at a time when people and businesses are being priced out of London by spiralling prices, it appears to be one to watch.
By Miranda Wadham
Shares in Horse Hill consortium suspended
Shares in the Horse Hill consortium including UK Oil & Gas Investments (LON:UKOG), Alba Mineral Resources PLC (LON:ALBA), Solo Oil PLC (LON:SOLO), Doriemus PLC (LON:DOR), Stellar Resources PLC (LON:STG) and Evocutis PLC (LON:EVO) remain suspending pending an announcement.
UK Oil & Gas Investments owns 30% of the consortium which in turn holds a 65% stake in the Horse Hill project. The remainder of the well is owned by Denver based Magellan Petroleum Corporation.
UK Oil & Gas Investments announced in April that the site could hold up to 100bn barrels of oil that triggered a sharp movement higher in shares.
Although the discovery was significant, the difficult nature of extracting the oil means only 15% may be recoverable.
ECB lowers growth forecast
Mario Draghi has today updated us on the ECB’s view of the economy and reassured the market that there will be no tapering of ECB stimulus in the near future.
Draghi said bond market swings were here to stay and market participants should prepare for an extended period of volatility as the ECB conducts their QE programme.
“There is a very strong belief that they are doing the right thing: that QE is absolutely necessary whatever the collateral effect on markets…That is something investors something have to understand and deal with,” says Franck Dixmier, chief investment officer for European fixed income at Allianz Global Investors.
The ECB has decreased their growth expectations for 2017 to 2.0% and kept 2015 and 2016 unchanged at 1.5% and 1.9% respectively.
Although the stimulus package is expected to boost growth in the long term, Draghi made it clear that liquidity injections alone were not enough. He pointed towards the governments of European nations to push through much needed structural reforms to support the ECB programme.
In regards to the Greek crisis, Draghi said he had met with Angela Merkel and Francois Hollande but did not comment on the specifics of the meeting although he did say he would like Greece to remain in the Euro.
Key Greek payment dates
As the first of many Greek deadlines fast approaches and markets jerk from headline to headline it is worth noting the key dates over the next few months which will have traders and investors on the edge of their seats, if Greece isn’t bankrupt by then.
Key Greek payment dates
5th June
EUR 300m IMF loan redemption
12th June
EUR 300m IMF loan redemption + EUR 3.6bn T-bill redemption
16th June
EUR 600m IMF loan redemption
18th-19th June
Eurogroup meetings in Brussels
19th June
EUR 300m IMF loan redemption + EUR 1.6bn T-bill redemption
25th-26th June
EU Summit
30th June
Greek EFSF Extension ceases
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)
India cuts interest rates by 0.25%
The Reserve Bank of India has cut rates for the third time this year. The move by the central bank was an attempt to further stimulate the Indian economy as investor expectations run ahead of the real economy.
The key repo rate was cut by 25 basis points to 7.25%. Previous moves this year came in January and March where the rates were cut by a similar amounts.
Indian stock markets have been strong over the last twelve months as investor’s price in stronger growth. The GDP growth rate has jumped but there are still concerns that this hasn’t yet filtered down into corporate earnings.
The upcoming monsoon also adds to market participant’s worries and many had expected the rate cut by the central bank to provide some stability.
“A repo rate cut of 25 bps was expected and already factored in by most of the market participants. It’s consistent with the RBI’s cautious stance, as it remains concerned about the monsoon outcome, geopolitical trends & U.S. Fed action. RBI’s future actions will be governed by not just the above stated points but also the government’s fiscal responses to adverse monsoon outcome and its efforts to push infrastructure growth.” Said Rupa Rege Nitsure, Chief Economist at L&T Financial
Although growth in India hit 7.5% in the last quarter, weak manufacturing data in April gives early indications that the headline growth rate may drop going forward, further dampening the prospect of stronger corporate earnings investors long for.
Goodlord embarks on crowdfunding project to fund expansion
A former Foxtons agent is aiming to crowdfund £450,000 for a company that intends to revolutionize the property industry.
Launched in February of this year, Goodlord describes itself as an online platform for managing the full tenancy process for lettings and estate agents. The company aims to “avoid tenancy paperwork, cut the deposit collection process from days to minutes, and collect rent on time every month”; an impressive target in an industry where paperwork is traditionally a main component.
The company handles all paperwork and payments digitally and says that Goodlord can be fully integrated into existing back office systems. It enables tenancies to be processed from any location, on any connected device, creating excellent potential for international sales.
There are currently only a few other companies that offer the same service, so it has certainly identified a gap in the market. Richard White, CEO and man behind the idea, says what sets them apart from the competition is fourfold: “Firstly, we are free (unless you go for the white label version – EG their own branding with a one off fee £299). Others charge a monthly fee.
We are also white label product – powered by Goodlord, but with an agents own look and feel. Thirdly, Goodlord integrates with existing platforms; most agencies use a software package and it is a big problem for them is they need to run two systems and have to do double data entry. Lastly, we have paid extreme attention to the user experience and it has been made as simple as possible so anyone can use it. One said that “it’s so simple my grandparents who are 86 could use it!”
Arguably, this idea represents a complete modernisation of the lettings process. It could be said that moving all paperwork online is a bit of a risk – it takes just one malfunction of the system to bring an agency to a standstill. There could also be some public mistrust surrounding e-signatures, an integral part of Goodlord’s system, particuarly concerning security and fraud. However, Richard White believes this won’t be a problem: “Arguably our method of signing is more secure than paper. We link peoples electronic signatures to an on rails process which includes ID checks, credit and logging devices, IPs and passwords meaning we know exactly who the signing party is”. The property market seems to share White’s enthusiasm; Goodlord is currently used by 35 offices around the UK with a waiting list of agencies they are waiting to bring onto the system, and they have so far processed more than £2m in tenancy transactions.
Goodlord is hoping to raise £450,000 on crowdfunding platform crowdcube.com.
By Miranda Wadham
Playtech to buy Plus 500 for £460m
The Plus 500 (LON:PLUS) saga took an interesting twist this morning as FTSE 250 software developer Playtech announced that it is to buy the troubled Spreadbetting and CFD trading company for £459.6 million. Playtech have jumped on the opportunity to capitalise on recent misfortunes at Plus 500 and has said they will pay 400p per share for the company, a 48% discount to intraday highs of 778p on 15th May.
Plus 500 has been the subject of an FCA probe that forced them to freeze trading accounts which spurred a flurry of negative broker comments and a suspension of shares.
Shares in Plus 500 traded as low as 195p in the wake of a number reports suggesting the shares were worth less than £1. The move by Playtech will come as a relief to management at Plus 500 as it draws the recent volatility to a close and gives some certainty for the future.
“We are very proud to have built Plus500 in a short time into a significant player in the CFD market. Having been admitted to Aim at a share price of 115p on 24 July 2013 and paid significant dividends during this time, we believe that now is the right time to combine the business with Playtech who can provide additional infrastructure and expertise to add to our core skills in products, technology and marketing.” Said Gal Haber, Plus 500 CEO.
The acquisition will support Playtech’s current portfolio and further their expansion strategy.
“Having recently completed the acquisition of TradeFX, the opportunity to acquire Plus500 will prove transformational for our ambitions to expand Playtech’s wider offering, Mor Weizer, Chief Executive Officer of Playtech said.
Shares in Plus 500 trade at 376p +1.6%
UK companies reporting week commencing 1st June 2015
Tuesday 2/5/15
AO World plc (LON:AO)
Wolseley plc (LON:WOS)
AMEC Foster Wheeler plc (LON:AMEC)
Wednesday 3/5/15
Dixons Carphone plc (LON:DC)
WH Smith Group plc (LON:SMWH)
Thursday 4/5/15
Pets At Home plc (LON:PETS)
Johnson Matthey plc (LON:JMAT)
Friday 5/5/15
Bellway plc (LON:BWY)
Halfords plc (LON:HFD)
Associated British Foods rallies on broker upgrade
Analysts at Goldman Sachs have upgraded Associated British Foods (ABF:LON) from a sell to a buy and bumped up their price target to 3120p from 2755p.
Expansion into the US and their £385 billion monthly retail sector is expected provide material improvements for ABF’s bottom line. The entry into the US market is expected to enhancement earnings to the tune of £720 million.
Goldman Sachs says the poor performance of the sugar business is largely priced in and the current share price offers an attractive entry for investors.
Shares in AB Foods trade 2.8% higher at 3033p at 14:40 in London trading.
Hornby launches Airfix crowdfunding project ‘Kitstarter’
Hornby, the model and collectibles specialist, has today announced it will be launching its own crowdfunding project in an effort to revive interest in the group’s Airfix products.
Founded in 1939, Airfix grew to be a popular pastime of young boys who relished popping open boxes of World War 2 tanks and meticulously constructing wartime vehicles they had heard stories about.
The age of the internet has almost killed this off and Hornby has gone about tackling this head on by utilising the internet to give individuals the opportunity to decide which models they would like to make and financially back items of choice. Those who partake in the crowdfunding project will be able to build an exclusive vintage Airfix model.
Richard Ames, Hornby Chief Executive Officer:
“This is a really exciting initiative for Airfix. We have a very large back-catalogue of model kits, many that are still remembered fondly by our consumers. We get lots of feedback about which models people would like us to re-introduce. Our KitStarter crowd-funding platform will enable Hornby to interact much more closely with our consumers. This will help us gauge demand accurately and respond quickly to their requests. Then we can prioritise which models we re-introduce.
“This initiative is one of a number where we are working hard to build closer links with our consumers. Many of these people are loyal enthusiasts who have been fans of Airfix for a long time and we enjoy interacting with them at model shows and via the model forums on our website. We are also confident that KitStarter will help us to reach a new generation of model enthusiasts that we can attract into the hobby.”
Richard Ames, Hornby Chief Executive Officer:
“This is a really exciting initiative for Airfix. We have a very large back-catalogue of model kits, many that are still remembered fondly by our consumers. We get lots of feedback about which models people would like us to re-introduce. Our KitStarter crowd-funding platform will enable Hornby to interact much more closely with our consumers. This will help us gauge demand accurately and respond quickly to their requests. Then we can prioritise which models we re-introduce.
“This initiative is one of a number where we are working hard to build closer links with our consumers. Many of these people are loyal enthusiasts who have been fans of Airfix for a long time and we enjoy interacting with them at model shows and via the model forums on our website. We are also confident that KitStarter will help us to reach a new generation of model enthusiasts that we can attract into the hobby.”