Chilean Banking Industry: Big Opportunities

Written by Daniel Subelman-Banco Penta. Posted in Finance

The banking industry has been fundamental to the Chilean economy and has played a key role in the country´s development, especially in recent decades since the economic and financial crisis of 1982. 

The 1982 crisis was one of the worst in the country’s history. Its impact on the Chilean economy, both short and long term, was far greater than that of the financial crisis of 2008. At the beginning of the 1980s, numerous Chilean banks were seized, some of which were nationalised and others dissolved. GDP fell by 13.6% in 1982, the sharpest drop since the global recession of 1929. Subsequently, the unemployment rate moved over the 20% threshold, where it remained for several years.

Gaza conflict brings GDP forecast cut in Israel as inflation falls to zero

Written by Fergal Hogan. Posted in Finance

Israel has reduced its growth forecast to 2.4% for 2014, Bloomberg has reported, as the country's inflation rate collapsed to zero in August. Israel's economy has been hit hard by fighting in the Gaza strip, as domestic consumption slowed and the number of tourist visitors dropped dramatically. Bloomberg quoted an Israeli government official as saying that the economy will expand 2.4% in 2014 rather than the 2.9% forecast in July. Output is set to grow by 2.8% in 2015, down from an earlier forecast of 3%. Meanwhile, Israel's inflation rate fell to zero in August according to official data, below the government's official inflation target range, which is between 1% and 3%. 

africa Ready for Investment Boom

Written by Howard Byrom. Posted in Finance

With more investors looking past the BRIC countries for the next big emerging market opportunities, Africa is ready for an investment boom. There are several challenges when it comes to investing in Africa, including unemployment, poverty, corruption and conflict. All of these are genuine obstacles to the business environment, but Africa’s economic foundations have been strengthening. Developed economies are only just shaking off the side-effects of the global economic downturn of 2008-2009, but Africa recovered quickly and is now displaying strong economic fundamentals.

Africa’s Lions Set to Roar

Written by Martin Gold. Posted in Finance

A 20-year surge in growth in Africa indicating that the world’s poorest continent is coming to terms with its challenges has raised the prospect of the African lion economies emulating the Asian tiger economies in the 21st century. Africa’s advantages include enormous untapped resources, a youthful population and an expanding middle-class. Of course, it should not be forgotten that there a still a few problems to be resolved, including poverty and inequality, Islamist militant violence and poor infrastructure.

Data assembled by the African Development Bank lends support to the theory that Africa is on the rise: Average life expectancy increased to 58 in 2011 from 37 in 1950, and primary school enrolment rose to 77% in 2011 from 52% in 1990. Last July, the International Monetary Fund estimated that sub-Saharan Africa’s economies will grow by 5.4% this year and 5.8% in 2015 compared to 1.7% and 3% in the US.

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.

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