Bahamas off-shore leak exposes key politicians
Several high profile politicians have come under fire following the leak of 1.3 internal files from a off-shore register located in the Bahamas.
The Home Secretary, Amber Rudd, is one of the key individuals to have been uncovered as involved by the compromising findings. According to investigations conducted by The Guardian, Ms Rudd has been revealed to have connections to a fund in which a director was convicted for propagating misleading statements to prospective and existing investors.
Similarly, former EU commissioner Neelie Kroes has also been exposed in the leak, and was forced to issue a subsequent apology for breaching the code of conduct. Kroes is culpable of failing to disclose her directorship position in an offshore company, whilst simultaneously investigating multinationals. Kroes issued a formal statement through her lawyer, who stated “My client agrees that formally she should have declared this directorship … Mrs Kroes will inform the president of the European commission of this oversight and will take full responsibility for it.”
This revelation comes just months after the Panama Papers scandal, which revealed off-shore activities of former Prime Minister David Cameron, amongst others. Cameron has recently abdicated from his MP position for Witney, following a tumultuous summer in which the Brexit vote saw the demise of his premiership.
However, various legislation remains in place which has meant that any attempt to initiate investigations into any holdings in the Bahamas remains a difficult endeavour. Unlike other offshore locations such as the Cayman Islands, registry details in the Bahamas are harder to ascertain and there is no concrete legal requirement to disclose directorships to the authorities.
The ICIJ director, Gerard Ryle, said of this obstacle, “We believe this kind of basic information, the names of people who are linked to what companies, is something that should be openly available – just as the former prime minister David Cameron himself once indicated,”
“We are publishing this information as a public service”, he added.
The Bahamas harbours around $223 billion (£172bn) in off-shore funds, 26 times its own national GDP.
Lloyd’s of London remain cautious over Brexit
Lloyd’s of London have reiterated concerns over Brexit, referring to it as a “major issue” despite promising profit figures.
Pre-tax profits were recorded at £1.46 billion in the first months of 2016, which is up 22pc from the previous year. Despite posting record profits today, the London-based insurance market has issued stark warnings over Brexit and concerns over the future of passport rights. Lloyd’s’ strong performance has been attributed to the strong Dollar in the wake of Brexit and similarly, a slight increase in investment returns.
However, in a joint statement, Lloyd’s chief executive and John Nelson the market’s chairman, remained tentative. In their statement, these factors were dismissed, stressing that they did not “represent sustainable profitability”
Ms Beale stated that, “The UK’s referendum on its EU membership is a major issue for us to deal with”.
“We are now focusing our attention on having in place the plans that will ensure Lloyd’s continues trading across Europe”, she continued.
Earlier this week, Bundesbank President, Jens Wiedmann warned of the serious consequences that revoking said EU passporting rights would have upon the financial industry and the city.
It has been suggested that up to 5,000 UK financial institutions will be affected by these developments. Of these, more than 2,700 are insurance brokers, and 200 are insurers. The insurance mediation directive is one the more popular type of passports that regulates brokers and is potentially jeopardized by Brexit.
Nonetheless, Lloyd’s emphasised that, “It is important to be clear that the referendum result has no immediate impact on the UK’s ability to keep trading with the EU,” Moreover, Ms Beale and Mr Nelson maintained that, “We continue to trade under the current passporting regime.”
Citibank donates £200,000 towards London food waste campaign
Global banking group Citi has been the first bank to contribute towards The Felix Project, donating a generous £200,000.
The Felix Project was founded by Evening Standard Chairman Justin Byam Shaw and his wife, Jane, following the death of their 14-year old son in 2014. It aims to help to alleviate hunger and food waste in the capital. The project collects fresh produce and delivers it, without cost, to various charities across London. Some of the suppliers involved include Sainsbury’s, Waitrose, Daylesford and Costco. Around 23 charities are currently being provided with groceries.
Citi’s UK boss, James Bardrick, spoke to the newspaper about their involvement with the cause. He commented, “Food poverty and food waste are serious issues facing London, with negative impacts on the health and wellbeing of residents as well as on the environment.”
Justin Byam Shaw and his wife have also pledged to match any donation to the foundation up the value of £750,000.
Donations from Citigroup have thus far totalled £500,000, which highlights their continual commitment to helping to eradicate food waste and hunger. The Evening Standard announced yesterday the generous donation, and revealed how they are planning to ensure the funds are maximised. The organisation aims to divide the sum, and spend the respective amounts to develop different areas within the foundation.
The first £100,000 is to be used to employ up to five deputy managers, who will be paid the current London Living Wage (£9.40). The Felix Project aims to recruit young Londoners struggling to find employment or those from low-income backgrounds for the role. The second half of the funds are to be used for staff and volunteer training purposes, to ensure staff are equipped to help run the continually expanding campaign.
Global initatives
France became the first country to introduce legislation to ban supermarkets from disposing of unsold groceries. Instead, under the law, supermarkets are now required to donate unused food produce to charities. If they fail to do so, they are subject to Government fines of up to €75,000. The initiative has increasingly picked up momentum across Europe, with Italy also following suit. Similarly, earlier in July, The Global Green Health Forum in Copenhagen approved the first global food loss and waste standard. This is a sure signal that the international community are continuing to make great strides on combatting the issue.Global stocks in positive territory on Fed decision
The US Federal Reserve announced their decision to hold interest rates at current levels, pushing global stock markets into positive territory.
As expected by many analysts, Fed Chair Janet Yellen kept rates on hold, saying: “The economy has a little more room to run than might have been previously thought. That’s good news….We don’t see the economy is overheating now.”
However, the Fed are running out of excuses not to raise rates and it seems increasingly likely the majority of policymakers will vote for a rise at their December meeting.
The DOW Jones rose to a 10-day high after the announcement on Wednesday, with the S&P 500 up almost 1 percent.
The FTSE 100 opened into positive territory on Thursday, currently up 52.17 points to 6886.88 (1015GMT). Asian shares also reacted positively, sending the Shanghai Composite up 0.54 percent and the Nikkei 225 up 1.91 percent.
22/09/2016
Small business confidence plunges post-Brexit
Small business confidence has fallen for the third quarter in a row, as economic concerns weigh in the wake of Brexit.
The survey, conducted by the Federation of Small Businesses, shows the second largest fall in confidence in the figures’ history. It is the first survey since the Brexit result and took into account the opinions of 1,035 small firms between July and August.
FSB national chairman Mike Cherry said, “the political shock of the Brexit result has taken place at a time of weakening business confidence.”
“Small firms are resilient and will survive the current fragile economic outlook, but to avoid an economic slowdown this data should be a wake-up call for our elected politicians.
“We look to the party conferences and upcoming Autumn Statement to green-light infrastructure projects at local and national level, to simplify the tax system and to help reduce the costs of doing business,” he added.
However, the number of small businesses hoping to grow over the next year rose to 55 percent, the highest level recorded in nearly a year.
22/09/2016
10 market proverbs every investor should know
“AN INVESTMENT IN KNOWLEDGE PAYS THE BEST INTEREST.” – BENJAMIN FRANKLIN
As said by Albert Einstein, “once you stop learning, you start dying”. In light of this, when investing, the value of educating oneself must not be underestimated. Achieving and maintaining success will necessitate frequently carrying out necessary research, study and analysis.
“I WILL TELL YOU HOW TO BECOME RICH. CLOSE THE DOORS. BE FEARFUL WHEN OTHERS ARE GREEDY. BE GREEDY WHEN OTHERS ARE FEARFUL.” – WARREN BUFFET
Significant gains will only come from stepping out of your comfort zone. Thus, as recognised by Mr Buffet, don’t be fearful of investing in a down market and exiting in a soaring market.
“THE STOCK MARKET IS FILLED WITH INDIVIDUALS WHO KNOW THE PRICE OF EVERYTHING, BUT THE VALUE OF NOTHING.” – PHILLIP FISHER
Essentially, investing without prior education and research will fundamentally lead to regrettable investment decisions. Valuable research necessitates much more than solely listening to popular opinion.
“IN INVESTING, WHAT IS COMFORTABLE IS RARELY PROFITABLE.” – ROBERT ARNOTT
Realizing significant gains will necessitate stepping out of your comfort zone. Fundamentally you must establish the boundaries of your comfort zone and familiarise yourself with stepping out of it in small doses. Although you need to know the market, knowing yourself too is essential.
“HOW MANY MILLIONAIRES DO YOU KNOW WHO HAVE BECOME WEALTHY BY INVESTING IN SAVINGS ACCOUNTS? I REST MY CASE.” – ROBERT G. ALLEN
Whilst its generally good practice to keep three to six months’ cash flow in a savings account, constrained by the presence of low interest rates, scope for gains is minimal. As such, in order to improve the chances of increasing your wealth faster than inflation, investment opportunities must be sought elsewhere.
“IT’S NOT HOW MUCH MONEY YOU MAKE, BUT HOW MUCH MONEY YOU KEEP, HOW HARD IT WORKS FOR YOU, AND HOW MANY GENERATIONS YOU KEEP IT FOR.” – ROBERT KIYOSAKI
Growing and protecting one’s investment portfolio is of paramount importance. While you could be a millionaire by the age of 30, if quickly blown this would result in a zero gain. Thus preserving money for the benefit of future generations will necessitate prudent diversification of one’s investment portfolio.
“KNOW WHAT YOU OWN, AND KNOW WHY YOU OWN IT.” – PETER LYNCH
Key to success is realising and acting upon the fact that there is no guarantee a wise holding today will remain a wise holding in the future. Carry out necessary research prior to making any investment decision, and do not underestimate the value of re- evaluating your portfolio on a timely basis.
“FINANCIAL PEACE ISN’T THE ACQUISITION OF STUFF. IT’S LEARNING TO LIVE ON LESS THAN YOU MAKE, SO YOU CAN GIVE MONEY BACK AND HAVE MONEY TO INVEST. YOU CAN’T WIN UNTIL YOU DO THIS.” – DAVE RAMSEY
Cash flow is king. Anybody who spends more money than they make will be forever chasing their tail and never attain the financial peace Mr Ramsey speaks of.
“INVESTING SHOULD BE MORE LIKE WATCHING PAINT DRY OR WATCHING GRASS GROW. IF YOU WANT EXCITEMENT, TAKE $800 AND GO TO LAS VEGAS.” – PAUL SAMUELSON
Noted by Gartman “Proper patience is needed throughout the lifecycle of the trade, at entry, while holding and exit” and thus, to remark that investing is gambling would be a misinterpretation. Investment gains over time will only be attained through planning and patience.
“YOU GET RECESSIONS; YOU HAVE STOCK MARKET DECLINES. IF YOU DON’T UNDERSTAND THAT’S GOINGTO HAPPEN, THEN YOU’RE NOT READY, YOU WON’T DO WELL IN THE MARKETS.” – PETER LYNCH
Regardless of a recession or decline, sticking to the course is of paramount importance. Undeniably economies are cyclical, however, the markets have shown that they will recover. Ultimately, you must endeavour to stay in to make sure you are part of those recoveries.
Video and article produced by Daisy Neall
OECD revises growth forecast for Britain following Brexit
A leading French think-tank has revised its warning about UK economic growth post Brexit, after abandoning its support for George Osborne’s austerity plan.
Despite the evident weakening of the pound following the June vote, the OECD has nonetheless has reconsidered its stark warning. Further stimulus measures by the Bank of England helped produce better than expected performance in August, motivating the OECD’ to reverse their statement. The OECD now expects the U.K economy to grow by around 1.8 percent, a 0.1 point increase on pre-referendum predictions.
However the OECD said downturn in the economy may still be to come, with the effects delayed until next year. Indeed, Britain has arguably yet to feel the full force of the negative economic effects of the referendum result; the retail sector continues to perform well according to August data and sterling, although still weaker, has rebounded slightly in the aftermath of the initial financial market tremble.
The OECD maintained, “Whilst markets have since stabilised, sterling has depreciated by around 10 percent in trade-weighted terms since the referendum.”
Similarly, the extent of the damage has yet to be fully realised both in the global economy and more specifically the Eurozone. Markets will therefore be watching the movements of Theresa May’s new government intently in order to ascertain the direction in which Brexit negotiations may take. Currently there are very few clues on this, making it difficult to accurately and comprehensively assess the impact this may have upon economic growth.
Last week, the Bank of England confirmed that no further cuts are likely; however, there are indicators that the Bank of England may take further precautionary measures in November, such as lowering interest rate levels. Speaking about the proposed November assessment, the Bank of England committee has said “…if, in light of that full updated assessment, the outlook at that time is judged to be broadly consistent with the August inflation report projections, a majority of members expect to support a further cut in Bank Rate to its effective lower bound at one of the MPC’s forthcoming meetings during the course of the year”.
Chancellor Phillip Hammond’s proposed Autumn Statement could also influence decisions. Hammond has thus far suggested higher spending may be a feature in the statement, proving a direct reverse of Osborne’s austerity measures and a move that until recently, the OECD had supported.
Nicole Jeary on 21/09/2016
Be prepared: anything can happen in the financial markets
The latest stock market sell-off on Wall Street reminded us that anything can happen in the financial markets. The following three events stand out as part of the markets’ recent surprises.
September 7: USD/JPY
Currency traders have been watching in amazement at the strength of the Japanese yen. The yen has gained a staggering 15% against the US dollar this year despite ongoing efforts by the Bank of Japan (BOJ) to ease monetary policy. The USD/JPY reached more than one-month highs on September 5. Traders hoping for a continuation of those highs were sorely disappointed. Just two days later, the USD/JPY tanked nearly 2 percent, or 200 pips. Traders who bought the USD/JPY above 103.00 might have saved a lot of pips by invoking dealCancellation. The market moved very fast, so dealCancellation, which gives you a 60-minute window to cancel your position, would have given you plenty of time to digest the losses and get the heck out!September 6: US Dollar
In the United States, the Labour Day long weekend signals the unofficial end of summer. Traders expressed their dissatisfaction by selling the US dollar, which plunged against a basket of currencies on the first Tuesday back from vacation. In reality, traders were responding to disappointing non farm payrolls data the previous Friday. Surprisingly, the dollar finished higher on Friday as traders realised that the creation of 151,000 jobs in August wasn’t so bad after all. Sentiment quickly turned bearish after the long weekend. Traders who decided to buy greenbacks after Labour Day should have quickly caught on that the market wasn’t going to go in their favour. With dealCancellation, they could have avoided a 1 percent plunge in the dollar for the day.August 31: WTI Crude Oil
It has been a weird couple of months for crude oil. The market spiked in early August after the Organization of the Petroleum Exporting Countries (OPEC) confirmed that it will hold informal talks with other major producers at a summit in September. This prompted hopes that major producers would finally agree to freeze output. As the month wore on, traders realised that a production freeze was far from guaranteed (in fact, most analysts were sceptical that OPEC and non-OPEC members would agree on any meaningful resolution). That scepticism combined with a much bigger than expected rise in US crude inventories to trigger a massive retreat in oil prices. The West Texas Intermediate (WTI) benchmark for US crude prices plunged nearly 4% that day. Traders who bet on a drawdown in weekly US crude stocks were sorely disappointed, and quickly found themselves on the wrong side of a landslide. Triggering dealCancellation any time after 10:30 am ET may have saved traders a lot of money and headaches. The team at easyMarkets has introduced a new feature called dealCancellation* that allows traders to undo their losing deals up to 60 minutes after placing them. In all three instances above, using dealCancellation might have saved traders’ bacon. It could also prove a useful tool for anything involving the British pound. The United Kingdom’s decision to leave the European Union (EU) triggered unprecedented volatility in the global financial markets. That’s because most traders bet on the UK remaining part of the EU. Any long positions on the British pound were absolutely massacred. As the votes trickled in, the GBP/USD plunged more than 10% to its lowest level in more than three decades. The pound sold off violently against the euro, yen and pretty much every other currency pair. With dealCancellation, traders might have put an end to the bloodbath immediately after the Sunderland results came in. More than two months later, the British pound still hasn’t recovered, and could face more sustained headwinds as the Bank of England looks to ease monetary policy even further to support a post-Brexit economy. Such events highlight the value of being as prepared as possible not only to trade but also to back away from trades that suddenly turn sour. *Terms apply “dealCancellation© Option is an ORE patent pending under the patent “Easy Cancellation Option” application number 62334455.”21/09/2016 - sponsored by easyMarkets.comRisk warning: Forward Rate Agreements, Options and CFDs (OTC Trading) are leveraged products that carry a substantial risk of loss up to your invested capital and may not be suitable for everyone. Please ensure that you understand fully the risks involved and do not invest money you cannot afford to lose. Our group of companies through its subsidiaries is licensed by the Cyprus Securities & Exchange Commission (Easy Forex Trading Ltd- CySEC, License Number 079/07), which has been passported in the European Union through the MiFID Directive and in Australia by ASIC (Easy Markets Pty Ltd -AFS license No. 246566).
RBS shares lower after Santander talks break down
Royal Bank of Scotland’s plans to sell 300 branches may be in trouble after it failed to agree a price with Spanish bank Santander, according to the BBC on Wednesday.
RBS now has a little over a year to find a buyer for the 315 branches, which must be sold as part of the terms of the bank’s 2008 bailout.
The bank tried to get around the obligation by assigning them to their spin-off bank Williams and Glyn, but were beaten by heavy costs associated with the plan.
According to the BBC, talks with frontrunner Santander broke down over a marked difference in price. Although Santander may still be interested, they want a significant reduction on the £1.6 – £1.9 billion price range given by RBS.
RBS (LON:RBS) is currently trading down 1.20 percent on the news, at 181.50 pence (1033GMT).
Bank of Japan shocks markets with policy change
The Bank of Japan shocked markets this morning by altering its monetary stance after three years of ineffective policy decisions.
The bank refrained from cutting interest rates further from their -0.1 percent low, directing efforts into hitting its two percent inflation target.
The Bank of Japan will continue to buy $80 trillion worth of government bonds, adopting “yield curve control” whereby it will buy long-term bonds to keep yields at current levels.
Interest rates will be placed at the forefront of monetary policy going forward, with the Bank of Japan saying:
“The BOJ will seek to lower real interest rates by controlling short-term and long-term interest rates, which would be placed at the core of the new policy framework.”
The Bank of Japan’s governor Haruhiko Kuroda highlighted the effectiveness of this policy in the long-term, although adding that in the short-term, “there isn’t a clear link between the base money target and inflation expectations.”
“That’s why the new policy framework can respond to changes in the economy and prices more flexibly.”
21/09/2016