Lord Myners to speak on bank profits in Dec. -Treasury
* No investigation under way
British financial services minister Lord Myners will voice concerns over bumper investment banking profits in a speech in December, but no investigation of the sector is under way, a Treasury spokesman said.
"Lord Myners intends to delve further into these issues in a speech early next month," the spokesman said.
"There isn't a formal investigation."
The Sunday Times newspaper reported that Myners had launched a probe into whether recent hefty investment banking profits had been facilitated by the billions of pounds of public money pumped into the financial system.
HSBC, Britain's biggest lender, in August reported that its investment banking profits rose by 130 percent in the first half of the year, while rival Barclays (BARC.L) said its investment banking profit doubled.
Investment banks pay out a high proportion of their profits in the form of staff bonuses, a practice which critics say fuelled a culture of excessive risk-taking which contributed to the credit crunch and subsequent banking crisis. (Reporting by Myles Neligan; Editing by Mike Nesbit) ((myles.neligan@reuters.com; +44 207 542 13 73))
UKCIG News, from Reuters, November 2009
Monday, November 30, 2009
Sunday, November 22, 2009
Macquarie rolls out first structured product for UK Capital Investments
Macquarie Funds Group has launched its first structured product, dubbed the Macquarie Global Infrastructure Growth plan, into the UK capital investments market.
The asset management arm of Australia-based Macquarie Group said it added the plan to its existing managed funds range to provide UK investors with the potential for defensive long-term capital growth and annual income combined with partial capital protection.
According to Macquarie, the plan provides investors with the opportunity to diversify their portfolio by gaining exposure to the global infrastructure sector.
The company said exposure to the sector could be relevant for investors focusing on long-term wealth planning, diversification, inflation protection and defensive investing.
The Global Infrastructure Growth plan is open for investment until December 17.
Investors will have the opportunity to benefit from any increase in the level of the S&P Global Infrastructure index.
Philipp Graf, head of the UK investment solutions and sales team at Macquarie, said: "Given the essential nature of infrastructure, demand for its creation and maintenance continues to rise.
"Investors have recognised this opportunity, and infrastructure is now an established asset class globally."
Mr Graf said Macquarie was offering UK capital investments investors "tailored access" to the asset class through the new plan.
"The payoff profile of the Macquarie Global Infrastructure Growth plan has been specifically designed to reflect the underlying characteristics of infrastructure assets represented in the S&P Global Infrastructure index," he said.
"The plan will enable investors to add infrastructure exposure to their portfolios for diversification and long-term wealth planning purposes."
UK Capital Investments News, November 2009
The asset management arm of Australia-based Macquarie Group said it added the plan to its existing managed funds range to provide UK investors with the potential for defensive long-term capital growth and annual income combined with partial capital protection.
According to Macquarie, the plan provides investors with the opportunity to diversify their portfolio by gaining exposure to the global infrastructure sector.
The company said exposure to the sector could be relevant for investors focusing on long-term wealth planning, diversification, inflation protection and defensive investing.
The Global Infrastructure Growth plan is open for investment until December 17.
Investors will have the opportunity to benefit from any increase in the level of the S&P Global Infrastructure index.
Philipp Graf, head of the UK investment solutions and sales team at Macquarie, said: "Given the essential nature of infrastructure, demand for its creation and maintenance continues to rise.
"Investors have recognised this opportunity, and infrastructure is now an established asset class globally."
Mr Graf said Macquarie was offering UK capital investments investors "tailored access" to the asset class through the new plan.
"The payoff profile of the Macquarie Global Infrastructure Growth plan has been specifically designed to reflect the underlying characteristics of infrastructure assets represented in the S&P Global Infrastructure index," he said.
"The plan will enable investors to add infrastructure exposure to their portfolios for diversification and long-term wealth planning purposes."
UK Capital Investments News, November 2009
UK Capital and Land investment helps food security - UK Capital Investments
Yet another top scientific report has emphasised the acute problem of food security currently facing the world’s ever-increasing population. With up to 50% more food needed over the next half century, investment in soft commodities via investment in agricultural farmland has the perfect exit strategy.
The latest report into the huge food security challenge comes from the Royal Society, the national academy of science in the UK and Commonwealth. The report titled ‘Reaping the Benefits: Science and the Sustainable Intensification of Global Agriculture’ argues that the UK capital investments should receieve £2 billion on crop research over the next decade to ensure that the world has enough to eat by 2050.
One of the main themes behind the report is the immediate call to action. “We need to take action now to stave off food shortages,” said Sir David Baulcombe, Chairman of the report. “If we wait even five to ten years it may be too late,” he said, underlining the sense of urgency.
This sense of needing to act now before it’s too late is very real. Speaking on BBC News, Sir Baulcombe said that “several scientific studies have all identified over the next 30 to 40 years the need for a massive increase in the amount of food that is produced”. By 2050, the world’s population could well number 9 billion and all these new mouths will need feeding. This means food production will have to grow by 50% – a tall order in a world where the supply of suitable farmland is limited.
One of the few countries where agricultural land is still available is Ukraine. Here, vast tracts of farmland currently lie fallow – BBC Newsnight recently quoted that the amount of unexploited agricultural land in Ukraine is the equivalent of the size of England – and the land’s rich black soil is one of the most fertile in the world. The availability of land together with its fertility is one of the main factors behind the recent surge in interest in investment in Ukraine land.
But fertile land isn’t enough on its own and extensive research is required to boost yields from farmland. The Royal Society believes that UK research should lead the bid to meet the huge challenge of producing enough food to feed the world. These research efforts need to focus on several key areas in agriculture. These include improving irrigation to avoid the effects of drought on crops, better crop and plant management, and genetic modification to allow higher yields of stronger crops.
As an additional challenge, the research needs to achieve these improvements without damaging the environment. The research will also have to take into account the effects of climate change. According to the Royal Society, climate change will increase “the scale of the challenge ahead”.
The Royal Society’s report concludes that “if we are to overcome the challenge that now lies before us we will need an even greater agricultural revolution”. Part of that revolution is already taking place in the fields of Ukraine where millions of tonnes of grain are produced and exported to the hungry world. But more food is needed and as this need grows so will investment in Ukraine land.
UK Capital Investments News, November 2009
The latest report into the huge food security challenge comes from the Royal Society, the national academy of science in the UK and Commonwealth. The report titled ‘Reaping the Benefits: Science and the Sustainable Intensification of Global Agriculture’ argues that the UK capital investments should receieve £2 billion on crop research over the next decade to ensure that the world has enough to eat by 2050.
One of the main themes behind the report is the immediate call to action. “We need to take action now to stave off food shortages,” said Sir David Baulcombe, Chairman of the report. “If we wait even five to ten years it may be too late,” he said, underlining the sense of urgency.
This sense of needing to act now before it’s too late is very real. Speaking on BBC News, Sir Baulcombe said that “several scientific studies have all identified over the next 30 to 40 years the need for a massive increase in the amount of food that is produced”. By 2050, the world’s population could well number 9 billion and all these new mouths will need feeding. This means food production will have to grow by 50% – a tall order in a world where the supply of suitable farmland is limited.
One of the few countries where agricultural land is still available is Ukraine. Here, vast tracts of farmland currently lie fallow – BBC Newsnight recently quoted that the amount of unexploited agricultural land in Ukraine is the equivalent of the size of England – and the land’s rich black soil is one of the most fertile in the world. The availability of land together with its fertility is one of the main factors behind the recent surge in interest in investment in Ukraine land.
But fertile land isn’t enough on its own and extensive research is required to boost yields from farmland. The Royal Society believes that UK research should lead the bid to meet the huge challenge of producing enough food to feed the world. These research efforts need to focus on several key areas in agriculture. These include improving irrigation to avoid the effects of drought on crops, better crop and plant management, and genetic modification to allow higher yields of stronger crops.
As an additional challenge, the research needs to achieve these improvements without damaging the environment. The research will also have to take into account the effects of climate change. According to the Royal Society, climate change will increase “the scale of the challenge ahead”.
The Royal Society’s report concludes that “if we are to overcome the challenge that now lies before us we will need an even greater agricultural revolution”. Part of that revolution is already taking place in the fields of Ukraine where millions of tonnes of grain are produced and exported to the hungry world. But more food is needed and as this need grows so will investment in Ukraine land.
UK Capital Investments News, November 2009
Wednesday, November 18, 2009
Capital leads FTSE 100 lower on UK captial investment fund worries - UKCIG
For much of the day supermarket group Morrisons was the leading faller in the FTSE 100, following the surprise news that its chief executive Mark Bolland was leaving to take up the same position at Marks & Spencer. But at the last minute outsourcing group Capita took the wooden spoon, falling 39.5p to 721p.
The 5% decline in Capita's shares came after what seemed - initially at least - a reasonably positive trading update. The company said it had performed well in the second half, and expected to meet analysts' expectations for the full year.
But the statement also revealed that new contract wins were lower than last year, and it was likely to take a hit relating to its financial management division. This business was caught up in the market turmoil which followed the collapse of Lehman Brothers, and dealings in two investment funds where it was the corporate director have been suspended. Capita said it was investigating with the Financial Services Authority whether investors had suffered any detriment. It said "any material costs incurred by Capita" would be disclosed separately in its accounts for the year. Lurking in the background is the prospect of some sort of legal action relating to the suspension of the funds.
Overall the FTSE 100 tried hard to stay in positive territory, but gave up the ghost after an opening dip on Wall Street, finally finishing 3.8 points lower at 5342.13. The US market was unsettled by some poor housing data and higher than expected consumer prices figures, which stoked concerns about inflationary pressures. The dollar continued to weaken on the news, which helped push gold to a new peak above $1,150 an ounce and also lifted base metal prices. So miners were among the leading risers, with Fresnillo 43p higher at 920p, Lonmin lifted 61p to £17.44 and Xstrata adding 52p to £11.27.
Vodafone, down 3.7p at 135.15p, and Cable & Wireless, 4.8p lower at 135.9p, both went ex-dividend and between them knocked more than 8 points off the leading index.
As already mentioned the Mark Bolland news left Morrison's shares 14.6p lower at 280.9p. To emphasise which company investors thought had got the better deal, Marks and Spencer was the biggest riser in the leading index, up 21.7p to 390p.
ITV added 1.8p to 53.75p after appointing Archie Norman as chairman, while Cadbury climbed 9.5p to 797.5p as Hershey and Ferrero confirmed they were considering their options for the UK group in the wake of Kraft's hostile offer.
The day's bit of bid speculation concerned British Gas owner Centrica, up 4.5p to 256.7p on revived talk that Russia's Gazprom could be interested. Dana Petroleum, tipped earlier this week as a possible takeover target for BP, added another 6p to £12.99.
Aerospace and defence group Cobham climbed 6.2p to 236.2p after Morgan Stanley began coverage of the company with an overweight rating and a 300p price target. The bank said:
We believe its exposure to high-tech communications, surveillance, cyber warfare and intelligence positions it extremely well to the changing priorities of the US Department of Defense – we encourage investors to build positions ahead of 2009 results.
But building materials group Wolseley lost 50p to £13.23 after reporting a fall in profits and a rise in borrowings.
Bovis Homes fell 11.3p to 437.2p despite its talk of an improving market. Analysts at KBC Peel Hunt issued a sell note, saying its rating was not justified by its prospective future earnings potential.
Bank of America/Merrill Lynch was backing the bookies, Ladbrokes at least. The bank raised its target price from 140p to 160p and its recommendation from underperform to buy, helping lift Ladbrokes 6.1p to 133.1p.
Lower down the market Petra Diamonds put on 6.25p to 72.25p as it confirmed last week's report it was touring the City looking for cash. It is raising $100m, partly to fund its plan to double its stake in the Cullinan mine in South Africa to 74%.
UK Capital Investments news, November 2009
The 5% decline in Capita's shares came after what seemed - initially at least - a reasonably positive trading update. The company said it had performed well in the second half, and expected to meet analysts' expectations for the full year.
But the statement also revealed that new contract wins were lower than last year, and it was likely to take a hit relating to its financial management division. This business was caught up in the market turmoil which followed the collapse of Lehman Brothers, and dealings in two investment funds where it was the corporate director have been suspended. Capita said it was investigating with the Financial Services Authority whether investors had suffered any detriment. It said "any material costs incurred by Capita" would be disclosed separately in its accounts for the year. Lurking in the background is the prospect of some sort of legal action relating to the suspension of the funds.
Overall the FTSE 100 tried hard to stay in positive territory, but gave up the ghost after an opening dip on Wall Street, finally finishing 3.8 points lower at 5342.13. The US market was unsettled by some poor housing data and higher than expected consumer prices figures, which stoked concerns about inflationary pressures. The dollar continued to weaken on the news, which helped push gold to a new peak above $1,150 an ounce and also lifted base metal prices. So miners were among the leading risers, with Fresnillo 43p higher at 920p, Lonmin lifted 61p to £17.44 and Xstrata adding 52p to £11.27.
Vodafone, down 3.7p at 135.15p, and Cable & Wireless, 4.8p lower at 135.9p, both went ex-dividend and between them knocked more than 8 points off the leading index.
As already mentioned the Mark Bolland news left Morrison's shares 14.6p lower at 280.9p. To emphasise which company investors thought had got the better deal, Marks and Spencer was the biggest riser in the leading index, up 21.7p to 390p.
ITV added 1.8p to 53.75p after appointing Archie Norman as chairman, while Cadbury climbed 9.5p to 797.5p as Hershey and Ferrero confirmed they were considering their options for the UK group in the wake of Kraft's hostile offer.
The day's bit of bid speculation concerned British Gas owner Centrica, up 4.5p to 256.7p on revived talk that Russia's Gazprom could be interested. Dana Petroleum, tipped earlier this week as a possible takeover target for BP, added another 6p to £12.99.
Aerospace and defence group Cobham climbed 6.2p to 236.2p after Morgan Stanley began coverage of the company with an overweight rating and a 300p price target. The bank said:
We believe its exposure to high-tech communications, surveillance, cyber warfare and intelligence positions it extremely well to the changing priorities of the US Department of Defense – we encourage investors to build positions ahead of 2009 results.
But building materials group Wolseley lost 50p to £13.23 after reporting a fall in profits and a rise in borrowings.
Bovis Homes fell 11.3p to 437.2p despite its talk of an improving market. Analysts at KBC Peel Hunt issued a sell note, saying its rating was not justified by its prospective future earnings potential.
Bank of America/Merrill Lynch was backing the bookies, Ladbrokes at least. The bank raised its target price from 140p to 160p and its recommendation from underperform to buy, helping lift Ladbrokes 6.1p to 133.1p.
Lower down the market Petra Diamonds put on 6.25p to 72.25p as it confirmed last week's report it was touring the City looking for cash. It is raising $100m, partly to fund its plan to double its stake in the Cullinan mine in South Africa to 74%.
UK Capital Investments news, November 2009
UK's Blair encourages capital investment in Sierra Leone
Former British Prime Minister Tony Blair drummed up support Wednesday for investment in Sierra Leone, arguing that the west African country has recovered from its brutal civil war and could offer unmatched opportunities in agriculture and tourism.
With miles (kilometers) of untouched beaches and arable land, Blair encouraged investors to take a chance on the land once riven by civil war — especially since its leadership is committed to stamping out the corruption that has impeded growth in other African countries. Sierra Leone's president, Ernest Bai Koroma, fired one of his ministers for corruption earlier this month and has promised to make the government more transparent.
"It's (Sierra Leone) got massive natural resources, wonderful possibilities commercially in agriculture, tourism, mining," Blair told The Associated Press on the sidelines of the conference. "What it's got now for the first time is a stable system of government with a president who genuinely wants to make change, root out corruption."
Blair said, for example, that Sierra Leone had one of the biggest reserves of iron ore in the world, and had recently privatized its port, which could be used for exports off the west African coast.
"Africa is a rich country with poor people — Sierra Leone is the clearest example of that," he said.
Sierra Leone is still struggling to recover from a civil war between 1991 and 2002 during which rebels recruited child solders and were known for hacking off the limbs of civilians to terrorize them into submission.
Many in Sierra Leone credit Blair for helping to end its brutal conflict. British troops that Blair sent to Sierra Leone in 2000 played a decisive role in preventing rebels from seizing the capital, Freetown.
He now works with Sierra Leone through a charitable group, the Africa Governance Initiative, which encourages private investment in sub-Saharan Africa.
Sierra Leone is still one of the world's poorest countries. Britain's Department for International Development, the government department that coordinates aid programs, says the country has one of the worst infant mortality rates in the world, and that 70 percent of women and 50 percent of men are illiterate.
But in a speech given earlier at the conference, Koroma said Sierra Leone was improving fast, with growth of around 6 percent a year since the war ended seven years ago. It is expected to grow around 4 percent this year.
"Instead of symbolizing Africa's tragedy, Sierra Leone symbolizes Africa's hope," Koroma said.
With miles (kilometers) of untouched beaches and arable land, Blair encouraged investors to take a chance on the land once riven by civil war — especially since its leadership is committed to stamping out the corruption that has impeded growth in other African countries. Sierra Leone's president, Ernest Bai Koroma, fired one of his ministers for corruption earlier this month and has promised to make the government more transparent.
"It's (Sierra Leone) got massive natural resources, wonderful possibilities commercially in agriculture, tourism, mining," Blair told The Associated Press on the sidelines of the conference. "What it's got now for the first time is a stable system of government with a president who genuinely wants to make change, root out corruption."
Blair said, for example, that Sierra Leone had one of the biggest reserves of iron ore in the world, and had recently privatized its port, which could be used for exports off the west African coast.
"Africa is a rich country with poor people — Sierra Leone is the clearest example of that," he said.
Sierra Leone is still struggling to recover from a civil war between 1991 and 2002 during which rebels recruited child solders and were known for hacking off the limbs of civilians to terrorize them into submission.
Many in Sierra Leone credit Blair for helping to end its brutal conflict. British troops that Blair sent to Sierra Leone in 2000 played a decisive role in preventing rebels from seizing the capital, Freetown.
He now works with Sierra Leone through a charitable group, the Africa Governance Initiative, which encourages private investment in sub-Saharan Africa.
Sierra Leone is still one of the world's poorest countries. Britain's Department for International Development, the government department that coordinates aid programs, says the country has one of the worst infant mortality rates in the world, and that 70 percent of women and 50 percent of men are illiterate.
But in a speech given earlier at the conference, Koroma said Sierra Leone was improving fast, with growth of around 6 percent a year since the war ended seven years ago. It is expected to grow around 4 percent this year.
"Instead of symbolizing Africa's tragedy, Sierra Leone symbolizes Africa's hope," Koroma said.
Tuesday, November 17, 2009
Invesco to launch split-uk capital investments trust - UKCIG
Invesco Perpetual has announced the launch of a new split- UK capital investment trust, the Invesco Perpetual Dual Return Trust plc.
The trust will invest predominantly in UK equities and be managed by Martin Walker, who has worked within the UK investment team for 10 years and who manages the Invesco Perpetual Children's Fund and the Invesco Perpetual UK Growth Fund
The trust will be launched in November/early December 2009 with the possibility of a second tranche of shares in February/March 2010.
It will have a seven-year life, with a capital structure comprising an equal number of income shares and capital shares, with no bank debt. It will be available at launch as an issue of units (one of each share class) for 200p, and which may be split into separate share classes and reassembled at any time. Invesco Perpetual will operate discount and premium control mechanisms for the trust.
"The Invesco Perpetual Dual Return Trust plc is reminiscent of the original days of split-capital investment trusts - the 1960s - and is designed to provide a simple, straightforward separation of returns between income and capital for shareholders with differing requirements and tax arrangements," explained Graeme Proudfoot, head of specialist funds at Invesco Perpetual. "While Sipps and Isas are designed to protect against both income tax and capital gains tax, it may make sense to consider the inclusion of income shares only in one or both of these wrappers, as all returns from these shares over the trust's seven-year life will be in the form of income. The capital shares could then be held outside of the wrappers so that any capital gains accruing could be mitigated by an investor's annual CGT allowance. Alternatively, holding units gives shareholders a conventional, ungeared exposure to our UK equities expertise within an investment trust structure over a seven-year life."
The fund's investment objective is to achieve a total return from a portfolio of predominantly UK equities. While the fund manager will have the ability to invest in fixed interest securities, it is expected that the portfolio will initially be 100 per cent invested in equities. The portfolio is anticipated to generate both capital and dividend growth. There will be no benchmark constraints, but performance will be measured against the FTSE All-Share Index.
Commenting on the investment rationale for the trust, Martin Walker said: "While there has been a rally generally in the stock market, what we believe to be high quality, dividend paying and often defensive stocks have been left behind. These stocks are now trading at valuations which are at absolute and relative lows. By exploiting the dual return nature of the trust's structure, income investors will have an opportunity to lock into good dividend yields, while those interested in capital growth can focus their investment on a geared exposure to some of what we believe to be the cheapest stocks in the market."
The trust will invest predominantly in UK equities and be managed by Martin Walker, who has worked within the UK investment team for 10 years and who manages the Invesco Perpetual Children's Fund and the Invesco Perpetual UK Growth Fund
The trust will be launched in November/early December 2009 with the possibility of a second tranche of shares in February/March 2010.
It will have a seven-year life, with a capital structure comprising an equal number of income shares and capital shares, with no bank debt. It will be available at launch as an issue of units (one of each share class) for 200p, and which may be split into separate share classes and reassembled at any time. Invesco Perpetual will operate discount and premium control mechanisms for the trust.
"The Invesco Perpetual Dual Return Trust plc is reminiscent of the original days of split-capital investment trusts - the 1960s - and is designed to provide a simple, straightforward separation of returns between income and capital for shareholders with differing requirements and tax arrangements," explained Graeme Proudfoot, head of specialist funds at Invesco Perpetual. "While Sipps and Isas are designed to protect against both income tax and capital gains tax, it may make sense to consider the inclusion of income shares only in one or both of these wrappers, as all returns from these shares over the trust's seven-year life will be in the form of income. The capital shares could then be held outside of the wrappers so that any capital gains accruing could be mitigated by an investor's annual CGT allowance. Alternatively, holding units gives shareholders a conventional, ungeared exposure to our UK equities expertise within an investment trust structure over a seven-year life."
The fund's investment objective is to achieve a total return from a portfolio of predominantly UK equities. While the fund manager will have the ability to invest in fixed interest securities, it is expected that the portfolio will initially be 100 per cent invested in equities. The portfolio is anticipated to generate both capital and dividend growth. There will be no benchmark constraints, but performance will be measured against the FTSE All-Share Index.
Commenting on the investment rationale for the trust, Martin Walker said: "While there has been a rally generally in the stock market, what we believe to be high quality, dividend paying and often defensive stocks have been left behind. These stocks are now trading at valuations which are at absolute and relative lows. By exploiting the dual return nature of the trust's structure, income investors will have an opportunity to lock into good dividend yields, while those interested in capital growth can focus their investment on a geared exposure to some of what we believe to be the cheapest stocks in the market."
Wednesday, November 11, 2009
EU hedge fund plan may choke investment-UK minister - UKCIG
European Union plans to tighten regulation of hedge funds and private equity managers could choke off investments and deepen the credit crunch, British Business Secretary Peter Mandelson said in the text of a speech to be delivered on Friday.
The executive European Commission has put forward a draft law that requires managers of alternative investment funds to register and disclose more information to regulators if they want to operate in the 27-nation bloc.
The move followed accusations by some policymakers that hedge funds amplified the crisis by short-selling bank stocks. EU governments and the European Parliament will have the final say on the draft.
Britain, the EU's top hedge fund and private equity centre, has criticised the draft legislation for being protectionist and its "one size fits all" approach. France, Spain and Germany back strong regulation of the sector. "It is vital that this (directive) is fully consulted on and carefully designed," Mandelson said in the text of the speech, to be delivered at an industrial conference in Brussels.
"We have to make sure that we don't cut off important sources of venture capital or do anything that makes it harder to manage venture capital investments within the single market," he said.
Mandelson said the draft law could choke the flow of capital to projects aimed at boosting growth and creating jobs and put European companies at a disadvantage to U.S. firms.
"What we can't afford is to trade an acute credit crunch for a chronic one," he said.
"Even before the credit crunch we just weren't getting enough venture capital to innovative and high tech companies. Even in this environment, U.S. firms could tap venture capital markets worth over $5 billion this year. In the EU it was about a tenth of that."
He urged the Commission to set up an EU-level fund to pool capital and risk across the region to back high-tech funds. The draft law is expected to come into force, probably around 2015. (Reporting by Foo Yun Chee; Editing by Steve Orlofsky)
UKCIG, UK Capital Investments News, November 2009
The executive European Commission has put forward a draft law that requires managers of alternative investment funds to register and disclose more information to regulators if they want to operate in the 27-nation bloc.
The move followed accusations by some policymakers that hedge funds amplified the crisis by short-selling bank stocks. EU governments and the European Parliament will have the final say on the draft.
Britain, the EU's top hedge fund and private equity centre, has criticised the draft legislation for being protectionist and its "one size fits all" approach. France, Spain and Germany back strong regulation of the sector. "It is vital that this (directive) is fully consulted on and carefully designed," Mandelson said in the text of the speech, to be delivered at an industrial conference in Brussels.
"We have to make sure that we don't cut off important sources of venture capital or do anything that makes it harder to manage venture capital investments within the single market," he said.
Mandelson said the draft law could choke the flow of capital to projects aimed at boosting growth and creating jobs and put European companies at a disadvantage to U.S. firms.
"What we can't afford is to trade an acute credit crunch for a chronic one," he said.
"Even before the credit crunch we just weren't getting enough venture capital to innovative and high tech companies. Even in this environment, U.S. firms could tap venture capital markets worth over $5 billion this year. In the EU it was about a tenth of that."
He urged the Commission to set up an EU-level fund to pool capital and risk across the region to back high-tech funds. The draft law is expected to come into force, probably around 2015. (Reporting by Foo Yun Chee; Editing by Steve Orlofsky)
UKCIG, UK Capital Investments News, November 2009
Sunday, November 1, 2009
National Savings and Investments set to shake up savings market
The National Savings and Investment body has launched a one-year 3.95% fixed-rate savings bond which has caught the attention of consumers and savers in the UKCIG. This is significantly higher than the vast majority of savings accounts and savings bonds offered in the wider market and will no doubt put significant pressure upon other companies in the UK to follow suit. However, there may well be other considerations when looking at the overall picture.
It is well-known that with the money markets not yet back to "traditional liquidity levels" many banks are depending upon customer savings deposits to make up part of any funding shortfall. However, with the National Savings and Investment body introducing an ultracompetitive savings bond there is every chance that business will be lost to this particular product and UK capital investments banks will need to review their savings rates.
The problem is that any increase in savings rates will have to be offset by an increase in other product rates such as mortgages, loans and overdrafts. In simple terms, if money becomes more expensive for UK banks then money will become more expensive for UK borrowers. The market will at some stage return to "normality" but at this moment in time that does seem some way off.
It is well-known that with the money markets not yet back to "traditional liquidity levels" many banks are depending upon customer savings deposits to make up part of any funding shortfall. However, with the National Savings and Investment body introducing an ultracompetitive savings bond there is every chance that business will be lost to this particular product and UK capital investments banks will need to review their savings rates.
The problem is that any increase in savings rates will have to be offset by an increase in other product rates such as mortgages, loans and overdrafts. In simple terms, if money becomes more expensive for UK banks then money will become more expensive for UK borrowers. The market will at some stage return to "normality" but at this moment in time that does seem some way off.
Russia's £11bn UK bond bid
The Russian government is to announce an £11bn bond issue in London this week in an attempt to draw Western investment into its crisis-hit economy.
The Business Secretary, Peter Mandelson, will meet the Russian finance minister and deputy prime minister, Alexei Kudrin, on Thursday when the bond will be announced. It is the first such move by the Kremlin in over a decade.
Despite the clashes, British Government officials believe that the business relationship with Russia has thawed considerably since the economic crisis as Vladimir Putin, the Russian prime minister, now needs Western money to support the ailing Russian economy. Two weeks ago, The Sunday Telegraph revealed that Gazprom was looking for tax changes in Russia to encourage Western investment in energy.
"I'm delighted that deputy prime minister Kudrin is coming to the UK," Lord Mandelson said. "This is an important opportunity for us to build on our strong trade relationship with Russia. Over 1,000 UK firms are already established in Russia, and Russia is our 12th largest export market. Whatever our differences, we must continue to work hard at deepening our understanding of each other and improving our commercial ties."
News of the bond issue comes as David Miliband, the Foreign Secretary, arrives in Russia today for the first visit by a British foreign secretary in more than five years. Although much of his visit will be devoted to political and diplomatic issues such as Afghanistan and the Litvinenko murder, he will also host a business breakfast where guests will include senior executives from British companies in Russia including Delloittes, HSBC and JCB.
Foreign Office sources said that Mr Miliband would tell his Russian counterparts that Western firms needed a more modern economy to invest in. Infrastructure needed to be improved, the economy expanded beyond its reliance on energy and a more 'transparent' business environment put in place. Officials pointed out that Russia had fallen to 120th out of 183 in the World Bank's ease of doing business survey and was 143th on the Corruption Perceptions Index.
Britain's multi-billion pound trading relationship with Russia has in fact flourished in recent years despite worsening political relations and Soviet-style bureaucracy. Yet analysts say the relationship has been held back by fears about Russia's unpredictable investment climate and by a series of diplomatic and corporate crises.
Thursday is being billed as a turning point. Mr Kudrin is to lead a Russian delegation that will include senior figures from the Russian central bank and finance ministry as well as top business people.
"Everything in Russia is very political and this is a signal to Russian business and officials that it is OK to do business with the UK," says one person who follows the bilateral relationship closely.
Mr Kudrin will meet Lord Mandelson as part of a joint UK-Russia steering committee which is meeting in London for the first time after a long hiatus caused by stormy diplomatic relations. The two sides will discuss barriers to doing business in both countries and what can be done to remove them. The UK has five priority business sectors in Russia: the oil and gas industry, financial services, hi-tech, life sciences and sporting infrastructure.
Though hammered by the global downturn, Russia is keen to diversify its economy away from oil and gas and to upgrade its crumbling Soviet-era infrastructure. UK officials say British companies can and should play a big role in the country's modernisation.
Separately, Mr Kudrin will give a presentation to potential investors on the £11bn bond issue planned for February next year. The Eurobond issue will be Russia's first since 1998 and is designed to cover budget deficits between now and 2012. Demand is expected to be high.
Although the UK regards itself as the largest bona fide foreign investor in Russia with an estimated cumulative investment of £26.7bn, continental competitors such as France and Germany have stolen a march when it comes to expanding business and trade in Russia.
More than 1,000 UKCIG companies operate in Russia, the world's largest country. Cadbury has its largest factory outside the UK in Russia, retail chains such as Kingfisher and Monsoon are well established, and banking behemoths HSBC and Barclays have been aggressively opening up retail banking outlets.
UKCIG, October 2009
The Business Secretary, Peter Mandelson, will meet the Russian finance minister and deputy prime minister, Alexei Kudrin, on Thursday when the bond will be announced. It is the first such move by the Kremlin in over a decade.
Despite the clashes, British Government officials believe that the business relationship with Russia has thawed considerably since the economic crisis as Vladimir Putin, the Russian prime minister, now needs Western money to support the ailing Russian economy. Two weeks ago, The Sunday Telegraph revealed that Gazprom was looking for tax changes in Russia to encourage Western investment in energy.
"I'm delighted that deputy prime minister Kudrin is coming to the UK," Lord Mandelson said. "This is an important opportunity for us to build on our strong trade relationship with Russia. Over 1,000 UK firms are already established in Russia, and Russia is our 12th largest export market. Whatever our differences, we must continue to work hard at deepening our understanding of each other and improving our commercial ties."
News of the bond issue comes as David Miliband, the Foreign Secretary, arrives in Russia today for the first visit by a British foreign secretary in more than five years. Although much of his visit will be devoted to political and diplomatic issues such as Afghanistan and the Litvinenko murder, he will also host a business breakfast where guests will include senior executives from British companies in Russia including Delloittes, HSBC and JCB.
Foreign Office sources said that Mr Miliband would tell his Russian counterparts that Western firms needed a more modern economy to invest in. Infrastructure needed to be improved, the economy expanded beyond its reliance on energy and a more 'transparent' business environment put in place. Officials pointed out that Russia had fallen to 120th out of 183 in the World Bank's ease of doing business survey and was 143th on the Corruption Perceptions Index.
Britain's multi-billion pound trading relationship with Russia has in fact flourished in recent years despite worsening political relations and Soviet-style bureaucracy. Yet analysts say the relationship has been held back by fears about Russia's unpredictable investment climate and by a series of diplomatic and corporate crises.
Thursday is being billed as a turning point. Mr Kudrin is to lead a Russian delegation that will include senior figures from the Russian central bank and finance ministry as well as top business people.
"Everything in Russia is very political and this is a signal to Russian business and officials that it is OK to do business with the UK," says one person who follows the bilateral relationship closely.
Mr Kudrin will meet Lord Mandelson as part of a joint UK-Russia steering committee which is meeting in London for the first time after a long hiatus caused by stormy diplomatic relations. The two sides will discuss barriers to doing business in both countries and what can be done to remove them. The UK has five priority business sectors in Russia: the oil and gas industry, financial services, hi-tech, life sciences and sporting infrastructure.
Though hammered by the global downturn, Russia is keen to diversify its economy away from oil and gas and to upgrade its crumbling Soviet-era infrastructure. UK officials say British companies can and should play a big role in the country's modernisation.
Separately, Mr Kudrin will give a presentation to potential investors on the £11bn bond issue planned for February next year. The Eurobond issue will be Russia's first since 1998 and is designed to cover budget deficits between now and 2012. Demand is expected to be high.
Although the UK regards itself as the largest bona fide foreign investor in Russia with an estimated cumulative investment of £26.7bn, continental competitors such as France and Germany have stolen a march when it comes to expanding business and trade in Russia.
More than 1,000 UKCIG companies operate in Russia, the world's largest country. Cadbury has its largest factory outside the UK in Russia, retail chains such as Kingfisher and Monsoon are well established, and banking behemoths HSBC and Barclays have been aggressively opening up retail banking outlets.
UKCIG, October 2009
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