Cash reserves of EMEA’s listed companies hit new high – but ‘pivot point’ will herald wave of investment

Written by Howard Byrom. Posted in Finance

 

·           Listed companies in EMEA have almost €1tn in cash, up from €714bn in 2007

·           59% of major businesses in this region will invest in the next 12 months

·           Training and development is the investment priority as companies seek to boost     productivity

·           EU and North America to attract most investment as interest in BRICs cools

 Listed companies across Europe, the Middle East and Africa have built up cash reserves of almost €1 trillion (€963 billion), according to a new report by Deloitte.  The 1,200 listed companies in the region have added a further €47 billion to this surplus in the last 12 months alone, whilst the total has increased by around €250 billion since 2007.  More than 75% of this sum is held by just 17% of companies, mirroring the global trend where around a third of companies hold 80% of the $3.53 trillion in cash reserves.

Ignore geopolitical risk at your peril, investors warned

Written by Fergal Hogan. Posted in Finance

Investors are being urged by a leading global analyst to review their portfolios more regularly and to include a small exposure into real assets, such as commodities and precious metals, as a precaution against rising geopolitical risk. Tom Elliott, International Investment Strategist at deVere Group, which has 80,000 clients and $10bn under advice, believes many investors are becoming complacent of the threats to the markets posed by political turmoil. He comments: “There seems to be a growing disconnect between investment and global political tension.  Russia is at war with Ukraine, the Middle East is engulfed in a Sunni/Shia conflict on multiple fronts, and China is testing the resolve of its neighbours to defend their maritime borders, amongst other situations.  All are challenges to the West to defend its interests, and on all scores the West is hesitant to intervene.

Big business decisions driven by gut instinct as well as gigabytes – PwC report

Written by Henry Martin. Posted in Finance


Business leaders are taking major strategic decisions about the future of their businesses based on their gut instinct and experience in preference to the use of data and analytics, according to a new report published by PwC and written by the Economist Intelligence Unit. 

The report, ‘Guts & Gigabytes’, explores the changing nature of corporate decision-making and the use of data by companies across the globe. It shows that senior business leaders in the UK are using their intuition and experience, as well as the advice and experience of others in their companies, over and above data and analytics. When asked about how they make major decisions, they ranked data and analytics as the third most important factor (23%) behind their own intuition and experience (41%) and the experience of others (31%).

WHEN CROSS BORDER ACQUISITIONS MAKE SENSE

Written by By Bruce Blonigen Knight, Lionel Fontagné, . Posted in Finance

Cross-border acquisitions constitute the overwhelming majority of foreign direct investment flows. Such takeovers transfer ownership of valuable assets held by domestic firms – including technologies, trade secrets, capital, and distribution networks – to foreign enterprises. Many policy makers malign cross-border takeovers that occur within their national industries, citing concerns that such activity transfers domestic economic prowess into foreign hands.

Dinc and Erel (2013) show broad evidence from 15 EU countries that national governments are much more likely to resist foreign acquisitions of domestic firms, despite the fact that EU treaty rules do not grant the right of governments to oppose mergers and acquisitions (M&A) on the basis of nationality.

ALTERNATIVE FINANCING STRATEGIES ARE NEEDED TO REACH PENSIONS STABILITY

Written by Online editor. Posted in Finance

LONDON August 2014 – Aon Hewitt, the global talent, retirement and health solutions business of Aon plc (NYSE:AON), has said that with defined benefit pension schemes climbing towards healthier funding status, they should be changing their approach and diverting sponsor contributions into alternative financing strategies.

Various measures of the funding status of schemes indicate that many are now over 100% funded.  A recent survey of 86 Aon Hewitt clients with recently completed funding valuations showed that 30% of them were substantially above 100% funded while 42% of them were around 100% funded on a best estimate basis. Similarly, when viewed on an accounting basis, around 25% of FTSE350 schemes are now over 100% funded.

TECH VENTURES

Written by By Henry Martin. Posted in Finance

The blend of highly motivated entrepreneurs and experienced venture capital fund managers with the right skills to commercialise innovation on a world-wide scale are now making European venture capital a convincing investment story. Europe has become the home to a huge range of digital media, mobile, software and hardware start-ups. The lower cost of building online businesses – as much as a third of the cost in 2000 – together with the rapid adoption of new technologies means that companies can go from a standing start to achieving great success within just a few years.

Pictured Klarna co-founders Victor Jacobsson, Niklas Adalberth, Sebastian Siematkowski (L-R)

 

TIME TO LOOK AT EMERGING MARKETS

Written by By Fergal Hogan. Posted in Finance

Emerging markets” is an expansive one. It can encompass everything from behemoths China and Brazil to up-and-coming Mexico and the testing frontiers of Africa. The appeal for investors is stronger growth and younger economies than typically found in the developed West, and emerging markets have delivered decisively on this over the past ten years. The trade-off for this growth is higher volatility and more risk. Emerging-market investments tend to suffer in the short term when turbulence hits, but in the long run they are tipped to outperform. Around 70% of world growth over the next few years is expected to come from emerging markets, with China and India due to account for 40% of that growth. Most emerging markets have young working age populations that can contribute to the economy and keep retirees’ pensions topped up. Traditionally, most investors buy stocks of European, Japanese and US companies, which account for nearly half of the world's market capitalisation.

TRANSPARENCY -TRADES

Written by Jamie. Posted in Finance


OECD releases full version of global standard for automatic 
exchange of information.

Taking an important step towards greater transparency and putting an end to banking secrecy in tax matters, the OECD today released the full version of a new global standard    for the exchange of information between jurisdictions. The Standard for Automatic   Exchange of Financial Account Information in Tax Matters calls on governments to obtain detailed account information from their financial institutions and exchange that information automatically with other jurisdictions on an annual basis. The Standard, developed at the OECD under a mandate from the G20, endorsed by G20 Finance Ministers in February 2014, and approved by the OECD Council.

A Captivating Way of Controlling Insurance Costs

Written by chris Brown. Posted in Finance

Insurance, the equitable transfer of the risk of a loss from one entity to another in exchange for payment, has been around for centuries. Over 500 years ago, ship owners in London met in Lloyd's coffee shop to write down their names and value of cargo. These were the first recorded private agreements to share risks associated with cargo. Now, the captive industry is the new kid on the block and in relative terms is still in its infancy. 

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