Team No Comments

Jupiter Asset Management – Active Minds Blog

Please see Active Minds article below from Jupiter Asset Management – received 06/08/2020

Summer warmth turns chilly for UK equities

In contrast to the warm, sunny weather in the UK at the moment, the UK equity market feels quite chilly and unloved in a global context, said Dan Nickols, Head of Strategy, UK Small & Mid Cap. The S&P 500 Index in the US is now up year-to date, while FTSE All-Share Index is down over 20% and the Numis Smaller Companies Plus AIM ex Investment Companies Index of UK small and mid-caps is down almost 18%.1

The reason why the UK has been so weak compared to other markets is partly compositional, as it contains fewer technology names, more financials, and more discretionary consumer stocks. Dan believes there is another layer too: the ongoing Brexit drama means that, for overseas investors, the UK can simply be filed under ‘too difficult’ and ignored for now in favour of other equity markets.

With an eye on the future, Dan is looking at real-time data around things such as credit card transactions, which indicate there was a good recovery until the end of June that then showed signs of slowing in July. Dan also highlighted a risk off unemployment picking up in the coming months, as the furlough scheme tapers off into a weak economy, bringing the importance of judicious stock and sector selection into sharp relief.

All of the above creates a challenging environment for UK equity investors. Dan highlighted that, in the UK small and mid-cap world, leadership in the market from a style perspective is very stark, as value continues to struggle badly while momentum, growth and revision factors remain relatively strong. Dan and the team are trying to navigate this by being purposefully overweight structural growth names, while tempering that with some exposure to what they believe are well-managed, conservatively financed stocks that are more geared into economic growth – although they have pared these back over the last few weeks, while retaining exposure to the stocks in which the team have highest conviction.

Large-cap tech stocks drive emerging markets

Emerging markets had a pretty good July, with the MSCI Emerging Markets Index finishing the month up around 3% (in sterling terms), noted Colin Croft, Fund Manager, Emerging Markets. Year to date, the index is almost flat, which is quite remarkable given the state of the global economy, said Colin.2  However, gains have been concentrated in a fairly narrow set of large-cap tech stocks, which now represent significant weightings in the index. These stocks are up significantly year to date, almost entirely driven by re-ratings, rather than seeing much in the way of earnings upgrades.

It is impossible to predict what the trigger could be for a change in the relative rating of these kinds of stocks. However, Colin suspects that as soon as there’s some sort of light at the end of the tunnel in terms of the pandemic, investors will want to take profits in these kinds of ‘haven’ stocks that have become so expensive, and could instead choose to move into stocks with more leverage to the recovery. It’s likely to be a bumpy road to get there though – for example, sentiment for recovery-dependent sectors such as financials and travel has been badly affected by a pickup in cases in countries that were previously looking much more encouraging, such as Spain and Australia. Elsewhere, the outbreak in Latin America shows no signs of abating – instead, it is plateauing at high levels.

Fortunately, there are some structural themes playing out that are more or less independent of the pandemic, highlighted Colin. One of these is the likely positive impact of the 5G rollout; another is the gas pipe reform we’re seeing in China. The latter has been under discussion for years, but finally some progress was made over the past month or so. Pipelines there were owned by the big three majors, which were also producers; however, now China is injecting all the pipe assets into a national company, which will then allocate the capacity in a strategic manner. Colin noted that this is happening on terms that have been surprisingly favourable to investors: they’re being injected at 1.2x or 1.4x book value; they’re also getting 40% cash payments for it, not just shares; and there’s talk about paying special dividends too.

Tech in the time of coronavirus 

The significant impact of technology across various sectors has been one key positive theme accelerated by the pandemic, says Makeem Asif, Fund Manager, Multi-Asset. Whether it is working from home, educating children online, retailers’ pivoting to online distribution or the need for more cybersecurity, the pandemic has led to a step change in the use of tech.

But, for Makeem and the global convertibles team, the biggest issue has been the valuation of some software companies where it is not unusual to see shares trade on 25x-40x revenues. In the semiconductor space, despite some initial supply chain disruptions, production in most factories in Asia is back on track. Earlier this week the semiconductor industry association published its monthly report which tracks sales and average selling prices of units. This highlighted how robust the semiconductor industry has been during the pandemic: in the twelve months to June, sales grew 7%, up from the 3% annual growth seen in May. The team expects chip sales to continue to rise driven by demand from data centres, autos, electric vehicles and other devices. In addition, says Makeem, such companies tend to have more reasonable valuations with good cashflow metrics.

In the fintech space, the hygiene requirements arising from the pandemic have acted as a catalyst to accelerate the uptake of digital payments with their clear advantage over cash. One of the dominant US card payment companies said it expected to reissue around 70% of its cards in the next 12-18 months. Although the switch to digital payments is not new, Makeem says there is still a significant amount of growth to come as some economies have been slow to adapt. Furthermore, there are still around 1.7 billion people worldwide who do not have a bank account.

1Source: FE, index returns in GBP to 31.07.2020
2Source: FE, index returns in GBP to 31.07.2020

Articles like this are useful for getting an insight to the market from market experts within their specified field.

The Coronavirus Pandemic has affected our lives in many different ways but as noted above a key positive theme has been the boost of the technology sector within the markets.

Please continue to check back for our latest blog posts and updates.

Charlotte Ennis

07/08/2020

Team No Comments

A.J. Bell – Property Fund Article

Please see below an article published by A.J. Bell yesterday, outlining why the reduced liquidity in property funds is not necessarily a bad thing:

Thanks to the introduction of technology, a competitive landscape for products and platforms and the general faster pace of 21st century life we have all got used to the idea of being to buy and sell our investments whenever we want.

The idea of giving six months’ notice to exit an open-ended property fund, a key recommendation put forward by regulator the Financial Conduct Authority in its latest response to the problems in this space (3 Aug), seems extremely onerous.

However, it is probably a move in the right sort of direction. Most open-ended property funds have been suspended anyway since March amid uncertainty over the valuation of their assets thanks to the Covid-19 pandemic.

Expectations of being able to buy and sell units in a fund which invests in an asset class which can take weeks or even months to sell was always liable to throw up problems.

These were particularly acute in the financial crisis and after the Brexit referendum, when facing a wave of redemptions as investors looked to sell out of the funds, managers ran out of cash and the funds had to be suspended.

THE DIFFERENCE BETWEEN TRADING AND INVESTING

Selling an asset during a period of intense volatility, when the kinds of liquidity issues seen with property funds are most likely to crop up, is not likely to be a good idea.

And while six months might seem like a hell of a time to wait, for an investor with a long-term horizon it is really the blink of an eye.

There are two main ways of profiting from the financial markets. The first is to buy and hold assets with the aim of achieving a reasonable and sustainable return. The second, higher risk approach, is to trade in and out of assets for a quick profit.

Only someone pursuing the former strategy could accurately be described as an ‘investor’ as opposed to a ‘trader’.

The biggest downside of the proposed 180-day notice period from this author’s perspective is that appears you would agree to sell at a price which you would only discover when the notice period came to an end.

If you want more flexibility and crucially transparency there are other options. You could buy a real estate investment trust or other property-related trust.

As these trade on the stock market you can buy and sell more or less whenever you like at a price you can see immediately but you also need to accept that trusts may trade at a discount to their net asset value, particularly in difficult markets.

As our clients are investors, not traders, we do not see this as an issue and generally the exposure to Commercial Property is nominal when you look at the average portfolio.

Please continue to check our Blog content for advice and planning issues and the latest investment, markets and economic updates from leading investment houses.

Please keep safe and healthy.

Carl Mitchell – Dip PFS

IFA and Paraplanner

07/08/2020

Team No Comments

UK Finance unveils ten Covid-19 and lockdown scams to be aware of

Please see below for the latest blog from UK Finance regarding scams:

UK Finance unveils ten Covid-19 and lockdown scams to be aware of

  • UK finance unveils ten Covid-19 and lockdown scams the public should be on high alert for and how to spot them
  • Criminals are preying on a worried public by tapping into their financial concerns due to coronavirus, asking for personal and financial information
  • New animation video from Take Five to Stop Fraud campaign warns people to remember criminals are sophisticated at impersonating other organisations

Using the coronavirus pandemic as an opportunity, fraudsters are using sophisticated methods to callously exploit people, with many concerned about their financial situation and the state of the economy. To coincide with the launch of its new animation urging people to follow the advice of the Take Five to Stop Fraud campaign, UK Finance today reveals ten Covid-19 and lockdown scams which criminals are using to target people to get them to part with their money.

 Some scams manipulate innocent victims, urging people to invest and “take advantage of the financial downturn”. Others impersonate well-known subscription services to get people to part with their cash and personal information. Criminals are even posing as representatives from the NHS Test and Trace service in an effort to trick people into giving away their personal details.

To remind people that criminals are experts at impersonating trusted organisations, UK Finance has launched a new animation video urging people to follow the advice of the Take Five to Stop Fraud campaign. Consumers are reminded to always take a moment to stop and think before parting with their money or information in case it’s a scam.

 The ten scams to be on the lookout for and how to spot them:

Covid-19 financial support scams

  1. Criminals have sent fake government emails designed to look like they are from government departments offering grants of up to £7,500. The emails contain links which steal personal and financial information from victims

  2. Fraudsters have also been sending scam emails which offer access to ‘Covid-19 relief funds’ encouraging victims to fill in a form with their personal information.

  3. Criminals have been targeting people with official-looking emails offering a ‘council tax reduction’. These emails, which use government branding, contain links which lead to a fake government website which is used to access personal and financial information.

  4. Fraudsters are also preying on benefit recipients, offering to help apply for Universal Credit, while taking some of the payment as an advance for their “services”.

Health scams

  1. One of the most shocking scams that has appeared during the pandemic has involved using the NHS Test and Trace service. Criminals are preying on an anxious public by sending phishing emails and links claiming that the recipient has been in contact with someone diagnosed with Covid-19. These lead to fake websites that are used to steal personal and financial information or infect devices with malware.

  2. Victims are also being targeted by fake adverts for Covid-related products such as hand sanitizer and face masks which do not exist.

Lockdown scams

  1. Criminals are sending fake emails and texts claiming to be from TV Licensing, telling people they are eligible for six months of free TV license because of the coronavirus pandemic. Victims are told there has been a problem with their direct debit and are asked to click on a link that takes them to a fake website used to steal personal and financial information.

  2. Amid a rise in the use of online TV subscription services during the lockdown, customers have been targeted by criminals sending convincing emails asking them to update their payment details by clicking on a link which is then used to steal credit card information.

  3. Fraudsters are also exploiting those using online dating websites by creating fake profiles on social media sites used to manipulate victims into handing over their money. Often criminals will use the identities of real people to strike up relationships with their targets.

  4. Criminals are using social media websites to advertise fake investment opportunities, encouraging victims to “take advantage of the financial downturn”. Bitcoin platforms are using emails and adverts on social media platforms to encourage unsuspecting victims to put money into fake investment companies using fake websites.

The banking and finance sector is working with the government and law enforcement to help identify scams and prevent people becoming victims of fraud. The industry is also encouraging everyone to remain vigilant and to follow the advice of the Take Five to Stop Fraud campaign, and to Stop, Challenge and Protect when they receive any messages out of the blue:

Stop: Taking a moment to stop and think before parting with your money or information could keep you safe.

Challenge: Could it be fake? It’s ok to reject, refuse or ignore any requests. Only criminals will try to rush or panic you.

Protect: Contact your bank immediately if you think you’ve fallen for a scam and report it to Action Fraud.

In order to spot a Covid-19 scam, people should be on high alert if:

  • The website address is inconsistent with that of the legitimate organisation
  • The phone call, text or emails asks for financial information such as PIN, passwords

  • You receive a call or email out of the blue with an urgent request for your personal or financial information, or to make an immediate payment

  • You’re offered a heavily discounted or considerably cheaper product compared to the original price

  • There are spelling and grammar mistakes, or inconsistencies in the story you’re given

Managing Director of Economic Crime at UK Finance, Katy Worobec, said:

“During this pandemic we have seen criminals using sophisticated methods to callously exploit people’s financial concerns, impersonating trusted organisations like the NHS or HMRC, to trick them into giving away their money or information.

“The banking and finance industry is tackling fraud on every front, investing millions in advance technology to protect customers and working closely with the government and law enforcement to stop the criminal gangs responsible and neutralise the threat.

“We would always urge people to follow the advice of the Take Five to Stop Fraud campaign to keep their  money and personal information safe from fraudsters.”

As the world rapidly changes, we have criminals adapting just as quickly to pounce on vulnerable situations. We post blogs like this to keep you up to date and aware of the latest scams you should be aware of, some of which even surprised us with their inhumanity.

We are all in this together, the way to battle this new wave of crime is to be vigilant and don’t be afraid to question anything that doesn’t seem normal, even by the most minor detail. Please remember if you receive these communications:

  • If it seems to good to be true, it probably is
  • If you were not expecting it, treat it with suspicion
  • Do NOT give away any personal details if communications make you think either of the points above

Anyone can be vulnerable to these scams. These criminals are career experts in what they do and can catch anybody off guard with devastating consequences, do not be afraid or embarrassed to discuss these matters or ask for help/advice.

Keep safe and well.

Paul Green

06/08/2020

Team No Comments

Brewin Dolphin – Markets in a Minute

Please see below the latest market update article from Brewin Dolphin – received 04/08/2020.

Brewin Dolphin – Markets in a MinuteEquity markets mixed, gold and silver continue to rise

Global share markets were mixed last week, with China outperforming the rest of the world as its economic recovery continues. US indices were flat or marginally up thanks to some extraordinary results from the US tech giants, but equities in the UK and Europe have fallen on poor economic data, rising coronavirus cases and a “wall of worry” about the economic outlook later this year.

Bond yields broadly fell again with yields on US Treasuries hitting record lows, while gold and silver prices rose as investors looked for safe havens. Meanwhile, the US dollar suffered its worst month in 10 years against a basket of currencies.

A positive start to the week…

Markets started the new week with a rebound. Equities in the UK, Europe, US and Asia all pushed higher on Monday, as surveys of manufacturing businesses in the US, UK and Europe suggested that factory activity was increasing. The FTSE100 saw the largest daily increase, jumping by 2.3% on Monday, pushing back up through the 6,000 level to 6,032.85.

Virus developments

New cases appear to be slowing in the US, suggesting the pausing of re-openings and the mandated use of masks in many states may be working. It also saw a reduction in hospitalisations, and the fatality rate is now around 1.5% compared to 7% in April. This is probably because more young people are getting the virus while older people are taking more care to protect themselves, while treatments are also improving. All this helps reduce the chance of another national lockdown.

Unfortunately, after a period of falling cases, Europe is now seeing infection rates rise again, driven heavily, but not exclusively, by Spain (about 50%).

Japan has also seen a big rise and even China has seen a pick-up in new cases, albeit from a very low base. It demonstrates just how hard the virus is to completely suppress, but China is an example of how an economy can recover while managing localised outbreaks.

The news of two revolutionary new coronavirus testing kits that give results in 90 minutes will no doubt be a great help in containment efforts. Previous tests took two days.

What’s eating the dollar?

Even after falling so far last month, we suspect the trend remains weaker for the dollar. Despite the recent reduction in coronavirus cases it still seems as if Europe will do a better job of containment than the US, with governments generally prepared to impose local lockdown measures before things get out of hand.

Both regions have produced stimulus packages that are supporting growth, primarily consumption at the moment, which you might expect to be positive for the dollar. But it comes at the cost of an increased budget deficit (where government spending exceeds its revenues), and this will likely result in an increased current account deficit (where the value of its imports exceed the value of its exports). Both of these can weigh on the dollar.

Time is tight for US stimulus deal

The extra $600-a-week in unemployment payments announced as part of the original stimulus package in March, came to an end last week. Politicians are still deadlocked in negotiations about the details of a new stimulus bill, with Republicans wanting to cut the payments to $200 a week and Democrats wanting to keep payments unchanged.

All this while the employment crisis burns (as evidenced by another week of higher jobless claims). Even given the tight timeframe, with the Senate due to go into summer recess on 7 August, we still think a deal will be passed, even if it means having to push back the summer break. The alternative would be delaying until September which is an outcome that both parties would be keen to avoid.

Corporate news

Earnings season in the US has been producing the right kind of headlines. Around halfway through and nearly 85% of companies have beaten EPS estimates, ahead of the more usual 80%. Exactly two thirds of companies have reported better-than-expected sales levels. That is an improvement on most other years, when an average of 50% of firms exceeded sales expectations.

Last week saw updates from some of the big tech names. After announcing stellar results as beneficiaries of the new work and play at home environment, the combined market value of Facebook, Amazon, Apple and Google soared by $230bn in after-hours trading on Thursday, taking their total value to more than £5trn for the first time and lifting the S&P500 into positive territory for the week.

All that glitters…

The best play on a weaker dollar has been precious metals, and while the focus has centred on the gold price hitting record highs, silver has actually been the better performer of late, rising nearly 25% in July alone. We still think there is more upside because silver’s rebound has not yet fully reversed the historic divergence in the ratio between the price of the two metals, plus silver has additional demand for industrial uses.

Another good overview of the markets from Brewin Dolphin. Although markets started with a rebound this week, we are still experiencing high levels of volatility.

Please continue to check back for our latest blog posts and updates.

Charlotte Ennis

05/08/2020

Team No Comments

Blackfinch Asset Management Monday Market Update

Please see below for Blackfinch Asset Management’s latest market commentary:

In the ever-changing world that we live in, we recognise the importance
of regular and current communication. This weekly news update provides
you with a short summary of events around the world which we
hope you will find useful. 

Issue 2 | 3rd August, 2020

UK COMMENTARY

  • Following the introduction of a two-week quarantine for travellers returning from Spain, Boris Johnson announces that further quarantines are being considered with Belgium, Luxembourg and Croatia the next likely candidates.
  • The UK finance ministry extends help to small businesses, announcing that Companies with fewer than 50 employees and a turnover of less than £9mln can now benefit from loans of up to £5mln under the Coronavirus Business Interruption Loan Scheme.
  • Data from Nationwide shows that house prices in the UK rose 1.7% in July.
  • Boris Johnson confirms that the UK needs to slow the reopening of the economy, delaying the reopening of some leisure businesses, as well as imposing restrictions in some areas of the country to counter a rise in infections.

US COMMENTARY

  • Florida and California continue to be the hubs for COVID-19 cases in the US, with both approaching 500,000 total cases, with only 5 countries globally having a higher case number.
  • Republicans and Democrats attempt to come to an agreement over a $1 trillion stimulus plan to help bolster the economy. A variety of steps are being proposed including $1,200 payments to most Americans and further funding for schools, businesses and increased testing.
  • The Federal Reserve leaves interest rates unchanged, as expected. A post-meeting statement confirms that “Following sharp declines, economic activity and employment have picked up somewhat in recent months but remain well below their levels at the beginning of the year.”
  • Data shows that the US economy contracted at its fastest pace ever in the second quarter of the year, falling 32.9%.
  • Donald Trump takes to Twitter to propose a delay to the November Presidential election, claiming that postal voting will make the election ‘inaccurate and fraudulent’.

EUROPE COMMENTARY

  • The European Central Bank (ECB) has told banks in the Eurozone to cancel dividends until 2021 and to exercise ‘extreme moderation’ with bonuses.
  • The German economy contracts by 10.1% in the second quarter of the year.
  • Data for the Eurozone as a whole shows economic contraction of 12.1% in the quarter.

COVID-19 COMMENTARY

  • Moderna Therapeutics began the final phase of clinical trials for its COVID-19 vaccine. The US trial, in collaboration with the National Institue of Alergy and Infectious Diseases is reported to involve up to 30,000 people.
  • The UK decides not to join an EU scheme to purchase COVID-19 vaccines, instead forming its own deals.
  • Following news that the UK had secured 90mln doses of the COVID-19 vaccine being developed by Pfizer and BioNTech, a deal worth £500mln was signed to purchase a further 60mln doses from Sanofi. In addition it is expected that Astrazeneca, in conjunction with the University of Oxford, may make 30mln doses available as early as September.

These articles are useful for breaking down market input into sectors. This facilitates an all-round view of the markets from the experts.

Please keep reading these blogs to keep your own view of the markets up to date.

Keep safe and well.

Paul Green

04/08/2020

Team No Comments

Invesco Weekly Market Performance Update

Please see below an article from Invesco which was published today providing their views on the performance of the markets over the past week:


Please continue to check our Blog content for advice and planning issues and the latest investment, markets and economic updates from leading investment houses.

Please keep safe and healthy.

Carl Mitchell – Dip PFS

IFA and Paraplanner

03/08/2020

Team No Comments

AJ Bell Precious Metals Blog

An article received from Russ Mould of A J Bell over the weekend weighing up precious metals.

The silver price is cheap relative to gold

But silver miners aren’t quite the bargain relative to the metal

 Russ Mould

The Silver Surfer was the creation of Marvel Comics legend Jack Kirby and the character acted as the herald of Galactus, the devourer of planets. This intergalactic super-being was usually fended off by the Fantastic Four or The Avengers.

From the point of view of investors, inflation devours wealth as scarily as Galactus consumed solar systems. Rather than turn to superheroes for protection against this potential threat, markets are turning toward something else known for being nearly indestructible, precious metals – principally gold and silver.

At the time of writing gold is setting new record highs above $1,900 an ounce but at $24 an ounce silver is still trading way below its prior peaks of 2011 and 1979, even if silver’s 34% year-to-date gain in 2020 outpaces that of gold by several percentage points.

PRECIOUS HAVENS

Precious metals tend to arouse strong feelings among investors. Some investors love them as a potential hedge against inflation, some against deflation and some against unforeseeable disasters and market dislocations, while others detest them, viewing gold in particular as a barbarous relic or inert useless lump.

But bulls are putting bears to flight right now and there may be three possible reasons why gold and silver are both doing well.

First, the market may be pricing in the almost unthinkable return of inflation, thanks to rampant central bank money creation through quantitative easing (QE) schemes, governments’ accumulation of ever-higher deficits, supply-side dislocation thanks to Covid-19 and possibly firms putting up their prices to help the meet the additional costs of staying in business in a post-pandemic world.

A five-year forward expectation for inflation of 1.67% in the US is hardly earth-shattering stuff, compared to the double-digit rates of the 1970s and early 1980s, but it does seem as if investors are becoming more wary of inflation.

Second, so-called ‘Austrian school’ economists do not define inflation by price changes, but change in money supply, relative to the volume of services and goods produced. The 24% year-on-year surge in US M2 money stock will have anyone who follows their theories on a state of high alert.

Third, related to the money supply, central bank money creation and higher government deficits could be driving fears of monetary debasement, prompting a rush to perceived havens and stores of value such as gold and to a lesser degree silver.

The US Federal Reserve has ramped up QE in 2020 in response to the pandemic, taking its total assets from $4 trillion to $7 trillion, through a series of programmes designed to buy a wide range of financial instruments.

Gold and silver surged between 2008 and 2011 as the Fed ran its first three rounds of QE but they then lost ground as it looked like the monetary authorities had regained control of the economic situation.

The pandemic may have changed all that, and the cost of keeping the show on the road this time around has already been much higher. One question that buyers of gold may already be asking themselves is what action will be taken by the Fed and other central banks next time a recession hits, as the system will feature even more debt and potentially be even more susceptible to an unexpected shock.

HOT STUFF

There is a fourth angle which pertains to silver only. Unlike gold, silver has industrial uses and as such is a more ‘cyclical’ play, because it is the best conductor of all metals and has antimicrobial attributes which make it a perfect biocide.

Demand from the traditional film photography industry is probably all but gone but these chemical properties means silver is ideal for the medical equipment, electronics, water purification and solar power industries.

As the world focuses more on renewable energy, solar panels could be a driver of silver demand. Whether this proves more potent than demand for a haven remains to be seen, but historical data does suggest silver is trading cheaply relative to gold.

The gold/silver price ratio has average 56 since 1970 but an ounce of gold currently trades at 80 times the price of an ounce of silver.

While the HUI Golds Bugs index trades below its average ratio to the metal price, silver miners do not look especially cheap compared to the physical commodity, based on the relationship between the metal and the Solactive Silver Miners index.

That benchmark has a fairly limited history and silver miners traded a lot more expensively relative to the metal in 2008 and 2011, so investors who prefer miners to metal still have much to ponder.

There is no guarantee that silver’s run will continue – if Covid-19 is beaten and the economy bounces back more strongly than hoped then the appeal of haven assets might not be anywhere near as strong.

As an investment on its own precious metals are a little different.  Safe haven assets but with the physical cost of storage and no income yield.  Fund Managers may occasionally use precious metals as part of a portfolio in heightened volatility, but they don’t tend to hold for example gold for the long term.

Trying to buy and sell precious metals and get your timing right is difficult.  George Soros, a famous Hedge Fund Manager, managed to call it right a few times but he also shorted sterling and was known as ‘The man who broke the Bank of England’ in the 1992 Black Wednesday UK currency crisis.

Steve Speed

03/08/2020

Team No Comments

AJ Bell Youinvest – The Growth of China’s Consumer Economy

Please see article below from AJ Bell Youinvest received 30/07/2020

The growth of China’s consumer economy

The country could stoke domestic demand to become more self-reliant

Thursday 30 Jul 2020 Author: Tom Sieber

In the last decade or more the Chinese economy has undergone a significant transition as it moves away from an infrastructure-driven and export-reliant economy to one fired by domestic consumption.

This change can be tracked by looking at how the country’s current account surplus has moved to a deficit. Broadly speaking a current account surplus means an economy is exporting a greater value of goods and services than it is importing.

Having peaked in 2008 when China truly lived up to its reputation as ‘The World’s Factory’ the surplus has declined significantly.

There are several factors underpinning the growth of the consumer economy, one being a natural offshoot of the maturation of the Chinese economy. A larger Chinese middle class is more likely to have disposable income to spend on products and services at home.

In the short term at least, exports have been hit by the coronavirus crisis as demand has dried up and trade routes have been affected by lockdown restrictions. Chinese tourists who might have taken their renminbi overseas are also shopping domestically instead.

There are signs China wants to move further in this direction as it looks to become more self-reliant. This may reflect pressure on the country and its businesses from other countries concerned about its growing global influence, and about its recent actions in Hong Kong and in the immediate aftermath of the Covid-19 outbreak.

A report by the Chinese Academy of Social Sciences, a think tank closely affiliated to the state, suggests the next five-year policy plan – due for 2021 – should prioritise home-grown innovation and look to tap into a substantial domestic market.

Please continue to check back for our latest blog posts and updates.

Charlotte Ennis

31/07/2020

Team No Comments

Prudential Update on Recent Investment Scams

Please see below an article just received from Prudential detailing an ongoing Investment Scam:

It is important to remain vigilant with your data and if you have received a communication that you are unsure of, please do not hesitate to contact our office on 0151 546 1969.

Please continue to check our Blog content for advice and planning issues and the latest investment, markets and economic updates from leading investment houses.

Please keep safe and healthy.

Carl Mitchell – Dip PFS

IFA and Paraplanner

30/07/2020

Team No Comments

J.P. Morgan – Multi-Asset Solutions Weekly Strategy Report

Please see below an article published by J.P. Morgan on the 27/07/2020 detailing their view on current market conditions and their position:

Please continue to check our Blog content for advice and planning issues and the latest investment, markets and economic updates from leading investment houses.

Please keep safe and healthy.

Carl Mitchell – Dip PFS

IFA and Paraplanner

30/07/2020