China’s Premier says economy is on the up
China’s premier, Li Keqiang, told state-owned China Central Television today that the economy’s fundamentals were good and major indicators were improving, despite the Shanghai Composite falling 7% this morning.
“Currently China’s economic fundamentals are good. Main economic indicators such as industrial output, investment, consumption, exports and imports have stabilised and showed improvements since May,” Li was quoted as saying.
“Employment is stabilizing and increasing. The economic performance is within a reasonable range.”
The government will strengthen targeted policy adjustments, Li said, adding that China was able to maintain a mid to high growth rate.
The central bank has recently cut interest rates to lower borrowing costs and encourage more lending, and most analysts expect the central bank to loosen policy further still. Li continued that the government would strengthen targeted policy adjustments, adding that China was able to maintain a mid to high growth rate.
London’s Silicon Roundabout leads Europe’s tech scene
Almost five years since David Cameron and Boris Johnson launched the ‘Tech City’ initiative, London’s tech scene has grown to become the most important tech hub in Europe.
London’s Silicon Roundabout is hot on the heels of Silicon Valley, with almost half of Europe’s billion dollar tech companies founded in the UK. These so called ‘unicorn’ companies, aptly named for their near mythical status, are born when start-up companies receive enough venture capital investment to be valued at a billion dollars.
The UK has produced 17 unicorns since 2000, with a total valuation of more than $40bn – FinTech’s crowdfunding website Funding Circle and online clothing retailer ASOS are just two of those. Other unicorns include JustEat, Skrill, Wonga, Zoopla, Farfetch, Transferwise, Shazam and Rightmove.
Manish Madhvani, Co-Founder and Managing Partner of GP Bullhound, comments: “The UK has raced ahead as the undisputed home of unicorns in Europe, with London producing the vast majority of Britain’s billion dollar tech companies. Growth is accelerating because we have created an environment capable of sustaining high levels of investment across a range of tech sectors.”
Cameron’s tech city initiative, launched in 2010, aimed to “bring together the creativity and energy of Shoreditch and the incredible possibilities of the Olympic Park to help make east London one of the world’s great technology centres”. He went further, saying that the idea was to “help to create the right framework, so it’s easier for new companies to start up, for venture capital firms to invest, for innovations to flourish, for businesses to grow.”
This project appears to have worked; London’s digital technology sector is growing faster than both the London and wider UK economy, and will continue to do so for the next decade according to research from London & Partners, the Mayor’s promotional company for London.
These achievements were celebrated at London’s Technology Week, which ran from the 15th – 21st June. More than 210 events took place, with workshops and talk hosted by Bloomberg, Goldman Sachs and Accenture, to name just a few.
FTSE 100 trades lower on Greece concerns
The FTSE 100 traded down 0.8% at lunchtime in London as the Greece debacle hit sentiment and weak mining stocks dragged the index lower.
“The market is coming under pressure, but there is still a chance they will reach a last minute agreement on Greece, as they have done in the past,” said Dafydd Davies, partner at Charles Hanover Investments.
European leaders are to resume talks on Saturday in a last minute effort to reach a deal and secure Greece’s futures in the Euro.
Arm Holdings (LON:ARM) was the biggest faller as it fell in tandem with Apple “Profit taking following yesterday’s nice move higher in concert with Apple is pulling Arm shares back towards the 1110p level this morning,” said Brenda Kelly of London Capital Group.
Tesco (LON:TSCO) was top of the pile following results that beat expectations. Although sales continued to slide, the drop was less than expected.
Woodford Equity Income Fund gives solid performance
Neil Woodford, top performing fund manager, set up the Woodford Equity Income Fund in June last year after leaving Invesco Perpetual. Those that were unsure whether to stick with the funds he used to manage at Invesco, or switch to his new fund needn’t have worried; Woodford Equity Income has performed well since it’s launch, with share prices rising 12% over the last 6 months.
Unusually, Woodford published a full list of the holdings in the fund – saying he was completely committed to transparency with his investors.
He is a big investor in tobacco stocks, such as British American Tobacco (up from £35 to £37) and Imperial Tobacco (up from £26 to £28.40). He backed Astrazeneca in its battle to fend off a bid from Pfizer, which paid off; shares in AstraZeneca are the biggest holding in the Woodford Equity Income, and have risen from £43.27 to £47.05 over the past six months.
The fund also has a notable amount of smaller companies, including Allied Minds, an American investment company that is listed in London with a market value of £400m. Oxford Catalysts Group, which is listed on the junior Aim market with a value of about £265m, accounts for 0.55 percent of Woodford Equity Income.
Mr Woodford said: “I strongly believe that investing in early-stage businesses can add meaningfully to the long-term performance of the fund, albeit individual positions will be small in the context of the overall portfolio.”
Geographically, the companies are mainly European – UK, Ire, Switzerland and Norway make up the majority. The rest of the shares are US-based.
The fund’s investment objective is income 10% higher than the FTSE, and his solid performance is down to his approach to handling money. Woodford buys big stakes in certain sectors; for example, a large percentage of the fund is healthcare – 32.5% compared to 8% benchmark, whilst ignoring others – including a notable lack of oil and gas – 0 instead of benchmark 11%. Most funds use a make up similar to FTSE index tin order to spread risk better.
“Woodford shunned tech stocks and banks, shortly before the crisis. He has also been investing heavily in pharmaceuticals for a number of years, which has boosted returns.” said Laith Khalaf, senior analyst at brokers Hargreaves Lansdown.
Crowdfunding added to the Oxford English Dictionary
Crowdfunding has officially entered the English language, after being added to the Oxford English Dictionary in its quarterly update.
The dictionary makes regular editions to its publications to reflect the evolving nature of the English language. Given the growth in technology and social media over the last few years, it is unsurprising to see that many of the new additions are related to these sectors. New words, senses, and phrases are added to OxfordDictionaries.com once editors have gathered enough independent evidence from a range of sources to be confident that they have widespread currency in English.
The Oxford dictionary defines crowdfunding as: “The practice of funding a project or venture by raising money from a large number of people who each contribute a relatively small amount, typically via the Internet”
Alongside crowdfunding, vaping, e-cig and retweet are among the words that have been added to the Dictionary today.
Uber ban provokes riots in France
France’s interior minister Bernard Cazeneuve has ordered a ban on Uber’s French arm, UberPOP, after a day of protests by taxi drivers.
French taxi drivers argue that they are being unfairly undercut by Uber. Cab driver in France must pay thousands of pounds a year in licence fees, and say that they have lost between 30% and 40% of their income over two years because of the growth of UberPOP.
“Many taxis drivers are infuriated,” Abdelkader Morghad, a representative of the FTI taxi union, told Bloomberg today.
UberPOP has been illegal in France since January, however the law has proved difficult to enforce. Uber say they will keep running the service until a judgment is handed down from France’s highest court.
Uber spokesman Thomas Meister said the firm had contested the law under which UberPOP has been ruled illegal, and accused the interior minister of overriding the normal legal process.
Nike reports profit increase of 24%
Sports retailer Nike reported a 24% increase in profit, fuelled by sales of high end shoes and clothing.
The company said net income rose to by $267m, from $698m a year earlier to $865m at the end of May this year.
Their high tech running shoes, including the Lunar and Free models, led sales, as well as an increased popularity of basketball shoes in the US market. The company’s largest market, North America, saw sales rise by 13% in the quarter.
President and chief executive Mark Parker described the past year overall as “outstanding”.
The company’s shares were up 2.3% at $107.63 last night on the NYSE.
Zanaga Iron Ore Co Ltd posts audited results
Zanaga Iron Ore Co is one of the biggest fallers on the AIM this morning, dropping 23.64 percent after have publishing their audited results for the year ending 31st December 2014. They disclosed a cash balance of $12.5 million at the end of 2014 and and $10.4 million at the end of May 2015.
The company has just completed a feasibility study and received its mining license. However, Clifford Elphick, Non-Executive Chairman of Zanaga Iron Ore Company Limited, commented: “these positive developments have been discounted to some extent by a number of significant changes in the global iron ore industry. A major negative impact has been the substantial fall in iron ore prices due to the slow down in the Chinese economy reducing demand, as well as significant supply increases from the major diversified mining companies”, suggesting that the company many be in for a hard time.
9 reasons to invest in property in Whitechapel, east London
Famous for being in the brown section of the monopoly board, Whitechapel is not the dreary investment opportunity it once was. Here’s why:
1. Although Whitechapel Station is just inside Zone 2, much of Whitechapel is in Zone 1.
2. Whitechapel is well connected. From Whitechapel Station you are able catch the Hammersmith and City, District and Overground lines. A short walk up to Bethnal Green will get you on the Central Line.
3. A Crossrail Station is being built in Whitechapel, properties within a short walk of these stations are enjoying value increases that exceed the average. JLL has produced a tool that ranks Whitechapel as the area with the most potential for property price increases. You can use the tool here.
4. It has one of the largest supermarkets in central London. The Whitechapel Sainsbury’s is also set to be redeveloped, adding to the floor space in the already large store.
5. Sundays are host to Brick Lane’s market, where you can try a wide variety of global cuisines from the ranks of street food vendors.
6. At Whitechapel Street Market, just outside the station, you will find everything from fruit juice to frying pans and mattresses to marshmallows.
7. Tayyabs curry house on Fieldgate Street is arguably one of the best in London. Lahore just down the road is just as good.
8. The Royal London Hospital on Whitechapel Road has one of the best trauma centres in the country, just in case you run into trouble.
9. You are a short walk from many of east London’s popular attractions; Victoria Park, Columbia Road Flower Market, Broadway Market, London Fields, Tobacco Docks, Shoreditch High Street……
Chinese stocks suffer biggest drop in five months
China’s $8.8 trillion stock market has dropped to become the worse performer globally. The Shanghai Composite Index fell 7.4 percent to 4,192.87 at the close, bringing its drop from this year’s high to 19 percent.
This comes after Morgan Stanley joined the growing group of analysts not to buy shares listed on Chinese stock exchange. “This is probably not a dip to buy,” wrote Jonathan Garner, the head of Asia and emerging-market strategy at Morgan Stanley in Hong Kong. “In fact, we think the balance of probabilities is that the top for the cycle on Shanghai, Shenzhen and the ChiNext has now taken place.”
Technology and smaller companies led the fall, with China’s smaller exchange in Shenzhen sinking 20 percent from this year’s peak.
Morgan Stanley said their reasoning was based on increased equity supply, weak earnings growth, high valuations and the surge in margin debt, saying the Shanghai Composite may fall as much as 30 percent through mid-2016.