deVere and Partners

Weekly Currency Update 27/01/2012

2012-01-27T04:01:56+00:00

Weekly Currency Update 27/01/2012

Europe

Europe’s shared currency advanced to a five-week high against the greenback and rose to a one-month peak against the yen on Thursday following speculation of a breakthrough in Greek debt negotiations and also a day after the Fed pledged that it will hold interest rates low until late 2014.

The euro rose to $1.31678 against the dollar, its highest level since Dec 21, moving beyond its 55-day moving average which comes in around $1.3130. The Stoxx 600 index gained 1.1% to 257.86, erasing a two-day losing streak. However, early this morning, the euro slid amid concerns over Europe’s debt crisis. The common currency dropped 0.2 percent to $1.3079 and slid 0.3 percent to 101.19 yen.

North America

The dollar weakened against all its 16 most-traded peers following the announcement of the Fed that it will keep interest rates near a zero level for a longer period than originally predicted, thus encouraging investors to seek for higher yields. The greenback reached a five-week low versus the euro after policy makers announced yesterday that the benchmark interest rate would remained unchanged until at least end of 2014 from mid-2013 and also because Italian yields dropped to a six-week low. The dollar was little changed at $1.3109 per euro yesterday afternoon in New York after sliding to $1.3184, the weakest level since Dec 21.

Canada’s dollar hit parity with its major counterpart for the first time in almost three months as commodities rose following the report that the Fed will extend its freeze on U.S borrowing costs. The loonie reached the strongest level since Nov. 1 and headed for a 1.1 percent advance on the week. The Canadian currency appreciated 0.3 percent to C$1.0018 per U.S dollar after touching 99.82 Canadian cents.

Around the world

Asia stocks experienced some fluctuations at the end of a slightly positive week, with bourses in Tokyo and Hong Kong losing their earlier gains. The Hang Seng Index slipped 0.1% in Homg Kong, while Japan’s Nikkei Stock Average dropping 0.1%. However, the yen advanced against all of its 16 major counterparts as extended negotiations over a debt-swap deal to avoid a Greek failure boosted the demand for refuge assets. The yen rose 0.4 percent to 101.11 euro today in Tokyo from yesterday, when it also advanced 0.4 percent.

Elsewhere, the New Zealand’s dollar was set to complete a six-week gain after a report showed that the country registered its first trade surplus in five months. The kiwi dollar was little changed at 82.17 U.S cents and set to advance 1.9 percent this week. It slid 0.5 percent to 63.29 yen, snapping the five-day surge to 1.9 percent. The Aussie on the other hand, dropped 0.1 percent to $1.0617 and dropped to 0.7 percent to 81.78 yen.

Finally, South Africa’s rand advanced to its strongest level versus the dollar in two and a half months after the Fed pledged to keep interest rates low until late 2014, spurring demand for higher-yielding assets. The rand appreciated as much as 0.2 percent to 7.8710 per dollar, the strongest level since Nov. 14.

For a more detailed currency outlook or to find out how economic and political news could affect your currency transfers, speak to a deVere FX Manager today.

deVere announces Pensions and Investments Seminar in Paris

2012-01-27T03:01:43+00:00

deVere announces Pensions and Investments Seminar in Paris

The deVere Group, the World's Largest Independent Financial Advisory, is organising an informative Seminar about pensions and investments, as well as how to make money in adverse market conditions.

The Seminar will be held on Wednesday April 4th, 2012, at the new deVere Paris office and it is aimed at giving attendants the chance to truly understand who the deVere Group is, their position in the market and how the deVere Group assists its clients from an independent professional advisory capacity.

The event will be opened and hosted by deVere Group Paris Managing Partner, Jason Trowles.

Guest speakers from some of the world’s leading financial institutions will also be there to give their expert view on what is going on in the markets and how to get the best out of such an uncertain economic time.

US economy picks up with biggest growth in 18 months

2012-01-27T02:01:33+00:00

US economy picks up with biggest growth in 18 months

The US economy, the world's largest, has seen a pick-up in growth at the fastest pace in 18 months in the 3 months to December, according to new figures from the US Commerce Department.

The American economy grew at an annualised rate of 2.8%, compared to 1.8% in the previous quarter, boosted by more goods-stockpiling by businesses.

Meanwhile, US Fed officials said this week that they are concerned about the economy's growth pace, 2 years after the recession ended, thus prompting a pledge to keep interest rates low into 2014. The improvement in the job market has yet to translate into gains in wages to spur household spending which accounts for about 70% of the economy, they said.

If you are looking for investment products that can give you positive returns even in a flat market, speak to a deVere Financial Adviser today.

Euro must fall 30% to save Europe – Roubini

2012-01-27T10:01:51+00:00

Euro must fall 30% to save Europe – Roubini

Nouriel Roubini, the American economist who had anticipated the collapse of the US housing market and the worldwide recession in 2008, is now warning that the Euro needs to see a sharp fall of at least 30% to bring it in line with the US dollar, in order to save the 17-nation periphery.

During the World Economic Forum in Davos, Roubini said that only a sharp fall in the Euro could restore the stability and competitiveness in Europe.

“What is necessary is for the value of the euro to fall sharply – at least a 30% depreciation, close to parity with the dollar. Unless you restore stock and flow, the euro-zone is doomed”, he said. Roubini also added that if the Euro-zone just implements austerity measures by cutting spending and raising taxes, the recession is going to get worse.

dVfx Manager James Stanton also commented that, "If the Euro drops by 30% against most major currencies, you will see substantial investment into the stagnating European markets. With more people investing in the Euro-zone, more foreign investment will be made."

The Euro is trading at $1.131 against the US Dollar, as at the time of writing.

For a more detailed currency outlook or to find out how economic and political news could affect your currency transfers, speak to a deVere FX Manager today.

Japan sees fastest pace in retail sales since 2010

2012-01-27T08:01:02+00:00

Japan sees fastest pace in retail sales since 2010

Japanese consumer retail sales grew at the fastest pace since August 2012, as consumer spending rebounded to boost the Asian economy that is still recovering from the historic earthquake and tsunami in March.

The Trade Ministry said in Tokyo today that retail sales rose 2.5% in December from a year earlier, the biggest advance in more than a year and exceeds median forecasts of economists.

“Consumers are gradually regaining their appetite”, Chief Economist Yoshimasa Maruyama commented. Bank of Japan Governor Masaaki Shirakawa, said earlier this week that consumer spending has been “unexpectedly robust”, citing the potential benefits of a strong Yen which makes imports cheaper, as well as the increased demand after the March disaster.

The optimistic data however comes as export shipments from Japan slid the most since May, on the back of a stronger Yen which strengthened the most in a month against the US Dollar.

Notably, earthquake survivors are now tapping record growth in deposits from insurance payouts and donations received in the aftermath of the disaster. Household deposits in the Tohoku area rose 8% in November from a year earlier, the biggest gain since 1999 when data started being recorded.

If you are living in Asia and are looking for professional financial advice, speak to a deVere Financial Adviser today.

Brazil unemployment falls to record low, sees higher economic growth

2012-01-27T07:01:05+00:00

Brazil unemployment falls to record low, sees higher economic growth

Unemployment in Brazil, one of the major emerging markets and the largest economy in Latin America, fell to a record low of 4.7% in December, amplifying the strength of the labour market, as Finance Minister Guido Mantega sees higher economic growth in 2012.

The percentage of the Brazilian population unemployed dropped by half a percentage point from November, according to figures released earlier today. The strength of the job market is therefore good news for the Government led by President Dilma Rousseff, who is keen to restore the economy to its previous high-growth territory after stalling in the third quarter of 2011.

Meanwhile, the central bank also predicted that its historically high benchmark Selic interest rate could fall into single digits this year, a favourable move for the economy.

“We are going to have higher growth in 2012 than we did in 2011 and inflation is going to be lower in 2012”, Mantega told reporters after the announcements.

If you wish to learn more about investing in Emerging Markets, speak to a deVere Financial Adviser today.

Asia stocks, rally as Yen strengthens most in a month

2012-01-27T07:01:47+00:00

Asia stocks rally, as Yen strengthens most in a month

The MSCI Asia Pacific Index is heading for the 6th consecutive week of advances after it reached a 3-month high yesterday, after Japanese Prime Minister Yoshihiko Noda said that he expects the central bank to take “bold” action to address the Yen’s strength, as it strengthened the most in a month against the US Dollar.

The Japanese currency advanced against all of its 16 major peers, increasing 0.5% to 77.03 per USD.
Senior Currency Analyst Toshiya Yamauchi, said that “Uncertainty over the Greek situation is sending money into refuge currencies such as the yen”. Moreover, the Fed's monetary easing also adds to the Yen’s outperformance versus the dollar, he added.

Meanwhile, the Institute of International Finance, which represents private creditors also said that talks on a Greek debt swap made some progress yesterday and will continue today, as a solution is desperately being sought.

At the time of writing, the Euro has not changed against the USD to trade at $1.3101, whilst it fell 0.42% against the Yen to 101.093.

If you are looking for professional financial advice about your next investment move, speak to a deVere Financial Adviser today.

deVere launches ‘Future of the Euro-Zone’ informative seminar

2012-01-24T01:01:09+00:00

deVere launches ‘Future of the Euro-Zone’ informative seminar

The deVere Group, the World’s Largest Independent Financial Consultancy, is please to launch the ‘Unlocking UK pensions and the Future of the Euro-zone’ informative seminar, taking place on Wednesday 1st of February 2012 at the Daniya Hotel, in Denia.

How does the current market situation in the Euro-zone affect your investments? Our experts will advise you on how you can protect your investments by opting for alternative means of accessing your UK pension. They will also explain the fantastic opportunities available to you as a UK expatriate living abroad with a frozen pension back home, including potential exemption of IHT and Income Tax, should you choose to retire abroad

deVere Senior Managing Partner Andy Oliver commented, “The hot topic is currently Europe and the potential consequences of it sticking together, and also of its break-up. Whatever the outcome, it will have consequences for expatriates. We want to help people protect their money. The obvious advice would be to start a pension fund, which is the bedrock of future financial security. We will be exploring ways of how we can help people do this”.

At deVere Group, international investors and expatriates employ us to find the right financial products that best suit their medium to long-term requirements for insurance, investments, savings and pensions.

Book Online Now

deVere launches ‘Future of the Euro-Zone’ informative seminar

2012-01-24T01:01:10+00:00

deVere launches ‘Future of the Euro-Zone’ informative seminar

The deVere Group, the World’s Largest Independent Financial Consultancy, is please to launch the ‘Unlocking UK pensions and the Future of the Euro-zone’ informative seminar, taking place on Thursday 2nd of February 2012 at the Le Meridien in La Rambla, Barcelona.

Did you know that you have the ability to directly control your pension fund and maximise its potential by having the flexibility to invest it? Our experts will explain the fantastic opportunities available to you as a UK expatriate living abroad with a frozen pension back home.

We will also discuss the implications of the Euro-zone crisis and the effects it could have on investments.

deVere Senior Managing Partner Andy Oliver commented, “The hot topic is currently Europe and the potential consequences of it sticking together, and also of its break-up. Whatever the outcome, it will have consequences for expatriates. We want to help people protect their money. The obvious advice would be to start a pension fund, which is the bedrock of future financial security. We will be exploring ways of how we can help people do this”.

At deVere Group, international investors and expatriates employ us to find the right financial products that best suit their medium to long-term requirements for insurance, investments, savings and pensions.

Book Online Now

Euro-zone private sector returns back to growth

2012-01-24T12:01:51+00:00

Euro-zone private sector returns back to growth

The Euro-zone’s private-sector has returned to growth for the first time in 5 months in January, driven by robust output growth in Germany and expansion in France, thus adding to hopes that the region may indeed escape recession.

Purchasing managers’ indices for the Euro-zone unexpectedly rose sharply in January, driven by robust output growth in Germany (the highest in seven months) and modest expansion in France, following a bleak end to 2011.

The optimistic data was also backed the European Central Bank’s view that economic activity is stabilising and could fuel a rebound on optimism in the financial markets, which sense that the economic impact of the region’s debt crisis may not be as disastrous as feared.

Meanwhile, economists nonetheless commented that albeit the fact that a weaker Euro may have boosted export activity in January, austerity measures and modest global growth are expected to somewhat curb growth throughout 2012.

If you are looking for professional advice about the economic outlook for 2012, speak to a deVere Financial Adviser today.

Asian markets remain strong despite stalemate in EU

2012-01-24T12:01:00+00:00

Asian markets remain strong despite stalemate in EU

Asia’s benchmark stock index maintained its strong gains for the 6th consecutive day, even as a stalemate emerged between European policy makers and Greek bondholders.

The Shanghai Composite Index is up 1%, whilst Japan’s Nikkei 225 Stock Average rose 0.2% even after the Bank of Japan kept its zero-interest rate policy. The MSCI Asia Pacific Index also rose 0.1% to 121.11 in Tokyo, after it yo-yoed between gains and losses for at least 8 times.

“The market has gotten used to developments in Europe”, said Naoteru Teraoka, General Manager at Chuo Mitsui Asset Management. “The Euro’s rebound against the Yen is contributing to a buyback in shares”, he added.

The Euro gained 0.14% to 100.38500 Yen as at the time of writing, rising 0.6% yesterday after Germany and France said that talks between Greece and bondholders were making progress. A strong Euro will thus boost the value of Asian exporters’ earnings overseas.

If you are looking for professional financial advice about investing in Asia, speak to a deVere Financial Adviser today.

deVere sponsors Wimbledon Village Stables Annual Charity Ball

2012-01-20T05:01:53+00:00

deVere sponsors Wimbledon Village Stables Annual Charity Ball

The UK branch of the deVere Group, the World’s Largest Independent Financial Advisory, is delighted to announce the sponsorship of this year’s Wimbledon Village Stables Annual Charity Ball in aid of The Royal Marsden Cancer Charity.

The 2012 WVS Charity ball is taking place on Saturday the 3rd March at the Cannizaro House Hotel. This popular annual social event is being organised in aid of The Royal Marsden Cancer Charity, which raise money to help The Royal Marsden hospital provide world-class care for cancer patients and to support pioneering work in cancer research.

deVere UK Managing Partner Kevin White commented, “We at deVere United Kingdom are delighted to have the opportunity to be involved with Wimbledon Village Stables and their prestigious annual charity ball, in what will no doubt be a fantastic event for such a noble cause”.

-End-

The deVere Group is the World's Largest Independent International Financial Consultancy. International investors and expatriates employ us to find financial services products that suit their medium to long term requirements for investments, savings and pensions. With in excess of US$8 billion of funds under administration and management, deVere has more than 60,000 clients in over 100 countries. Our independence and ability to offer financial products that are tailor-made to fit an individual's needs are behind our success.

www.devere-group.com

T +34 636 978 880

Weekly Currency Update 20-01-2012

2012-01-20T03:01:37+00:00

Weekly Currency Update 20-01-2012

Europe

The shared currency has reached its highest level in two weeks following Spain’s success in selling its debts. The euro strengthened to a two-week high against the greenback and the yen as Spain raised more than its maximum predicted debt sale, boosting optimism the debt crisis is under control. Encouraging signs that the debt crisis is stabilizing spurred demand for the region’s assets with Europe’s common currency gaining 2.4 percent in the past three days against the dollar. The euro rose 0.8 percent to $1.2968 in New York after climbing earlier to $1.2971, its strongest level since Jan.4.

Following the progress made in the debt swap talks in Greece, the euro also advanced as Greek Prime Minister Lucas Papademos is set to complete an accord to lower his nation’s debt, key to a second financing package for Greece.

North America

The dollar headed for a weekly loss against most of its major counterparts amid U.S. data pointing to recovery in the world’s biggest economy thus reducing demand for safer assets. The greenback slid to a two-week low versus the euro before a report forecast showed that sales of existing U.S. homes reached its highest level in one and a half year.

The greenback dropped 0.1 percent to $1.2977 per euro this morning in London from $1.2968 yesterday in New York. It reached $1.2981 against the shared currency earlier, its weakest level since Jan.4.

Canada’s dollar was little changed against its U.S. peer and fluctuated as a drop in crude oil countered rise in stocks. The loonie was little changed at C$1.0108 per U.S. dollar after touching C$1.0071, the most since Dec.8. One Canadian dollar buys 98.93 U.S cents.

Around the world

For a fifth consecutive week, Asian stocks have risen this week with South Korea’s won leading the pace after U.S. jobless claims fell to the lowest level in almost four years added to the good news that Spain and France have successfully sold their debts. The MSCI Asia Pacific Index(MXAP) increased 1.1 percent, bringing its weekly rally to 3.1 percent and the Nikkei 225 Stock Average advanced 1.5 percent. China’s stocks have also risen with the benchmark index registering its back-to-back weekly gains in two months following speculation the government will ease lending curbs to boost economic growth.

The Australian and New Zealand dollars were poised to strengthen for a fifth week as the debt crisis in Europe seems to be contained at the moment, encouraging investors to seek for higher-yielding assets. The Aussie traded at $1.0409 from $1.0419 in New York yesterday, set for a 0.8 percent weekly advance. The kiwi on the other hand traded at 80.22 U.S. cents from 80.29 cents and has risen 0.9 percent since Jan.13.

Elsewhere, South Africa’s currency rose to a two-month high against the greenback after the Governor of the central bank, Gill Marcus, said policy makers didn’t discuss the possibility of cutting borrowing costs after they left interest rates unchanged. The rand appreciated as much as 1.1 percent to 7.9028 per dollar, the strongest level since Nov.14. It traded 0.7 percent higher at 7.9363 per dollar in Johannesburg. It rose to its strongest level since Sept.15 against the euro as it reached 0.4 percent to 10.2296.

For a more detailed currency outlook or to find out how economic and political news could affect your currency transfers, speak to a deVere FX Manager today.

Emerging stocks set for best week in 2 months

2012-01-20T11:01:23+00:00

Emerging stocks set for best week in 2 months

Emerging-market stocks rose this week, heading towards the biggest weekly gain in almost 2 months, amid speculation that China, one of the leading emerging market economies, may ease lending to spur economic growth.

The MSCI Emerging Markets Index (MXEF) added 0.4% in Hong Kong today, set for the highest close since Oct 28, after climbing 4.4% in this week and has risen 8.5% in this year alone.

Chinese banking stocks led the gains, on speculation that the government will ease lending facilities in order to boost economic activity. “The rally is supported by expectations that more liquidity will be released”, commented Fund Manager Wu Kan.

Moreover, an optimistic US government report also showed yesterday that Americans claiming jobless benefits fell by 50,000 to 352,000 last week, the lowest level since April 2008, whilst France and Spain auctioned EUR14.6 billion of notes at lower yields amid boosted sentiment.

“While we expected market conditions to improve this year, we have been surprised by the speed and intensity of the rally”, Barclays Strategists added.

If you are looking to review your funds to position your portfolio for 2012, speak to a deVere Financial Adviser today for a professional review.

Apple worth more than Greece

2012-01-20T09:01:31+00:00

Apple worth more than Greece

As Apple Inc, the most valuable technology company in world, saw its value rising to a record high of $400 billion on the stock market on Thursday, it surpassed the value of Greece.

During trading on Thursday, Apple stock rose to an all-time high of $431.37, putting it in exclusive territory as PetroChina, Apple's closest competitor, is valued at $270 billion and Microsoft at $235 billion.

Notably, Analysts commented that Apple's market cap is thus higher than the gross domestic product of Greece, Austria, or Argentina.

Apple is still one of the fastest growing technology companies, with a stunning achievement for the 35-year old company which had a market cap of just $10 billion a decade ago. Analysts expect Apple to report 45% sales growth in Q4 from its previous year.

The company's success began with the launch of the iPod and then skyrocketed after the iPhone's release in 2007. Apple is forecast to have sold a record 30 million iPhones last quarter, following the launch of the iPhone 4S in October.

If you wish to learn more about investing in the lucrative technology market, speak to a deVere Financial Adviser today.

Asia looking to close week in positive territory

2012-01-20T12:01:00+00:00

Asia looking to close week in positive territory

Asian markets have extended gains on Friday, with the Japan’s Nikkei 225 up 1.47%, the Shanghai Composite index added 1% and the MSCI Asia Pacific Index also advancing 1%, following yesterday’s successful bond auctions in France and Spain, as well as optimistic economic data from the US.

Positive sentiment amongst investors therefore boosted appetite for risk and thus, growth-focused assets were in demand as investors took an optimistic view of recent developments regarding the Euro-zone, US economic data and corporate earnings.

Financial stocks rose across the board, following positive earnings results from Bank of America and Morgan Stanley, with HSBC jumping 2.6%.

“Better economic data, progress in the Greek negotiations and successful peripheral European bond auctions have bolstered market sentiment for the time being”, Analysts at Barclays commented.

In currency markets, safe havens such as the Yen and the Dollar suffered against the Euro, trading at Y100.25400 and $1.29860 versus the shared currency, respectively.

In commodities markets, spot gold gained today 1.18% to $1,657.30 per ounce, while February Nymex crude oil futures advanced to $100.50 per barrel on Globex.

If you are looking to review your funds to position your portfolio for 2012, speak to a deVere Financial Adviser today for a professional review.

SOPA, PIPA piracy bills petition gets millions of signatures

2012-01-20T12:01:00+00:00

SOPA, PIPA piracy bills petitions get millions of signatures

The online petitions against the SOPA and PIPA anti-piracy legislation bills which are currently being debated in Congress, already topped over 7 million signatures according to Google which used its blacked-out logo as a link to the petition on Wednesday.

Google announced today that it already collected more than 7 million signatures from the US alone, for its online petition against the anti-piracy legislation backed that is backed by Hollywood.

Meanwhile, coordinated efforts from Google and Wikipedia against SOPA and PIPA, two of the 5 most popular website in the world, changed the face of the internet on Jan 18. According to Wikipedia, more than 162 million people saw their black-out message on Wednesday which saw Congress’s switchboards shut down as their servers reportedly melted. The company said on its website on Thursday, “From all around the world your messages dominated social media and the news. Millions of people have spoken in defence of a free and open Internet....For us, this is not about money. It’s about knowledge. As a community of authors, editors, photographers, and programmers, we invite everyone to share and build upon our work”.

Internet companies said that the SOPA (Stop Online Piracy Act) and the PIPA (Protect IP Act) in the Senate would promote online censorship, disrupt the Web’s architecture and harm their ability to innovate. On the other hand, the movie and music industries, as well as the US Chamber of Commerce, the nation’s largest business-lobbying group, back the legislation as a means to fight piracy by websites that operate outside the US.

The Online Piracy Act is an effort to fight online trafficking of copyrighted intellectual property and counterfeit goods. The Protect Intellectual Property Act provides additional tools to curb access to "rogue websites dedicated to infringing or counterfeit goods".

JP Morgan and Goldman Sachs CEOs see Wall Street rebound

2012-01-19T04:01:15+00:00

JP Morgan and Goldman Sachs CEOs see Wall Street rebound

JPMorgan Chase Chief Executive Officer, Jamie Dimon, and Goldman Sachs Group CEO, Lloyd C. Blankfein, predict that Wall Street will rebound from the 2011 plunge sooner than expected.

In an effort to reassure investors that global stock markets and securities units earnings will rebound, Dimon and Blankfein said that the markets will get back to high performance quicker than investors are anticipating.

“The world will snap back, and it will be a surprise, and it will be faster than people think”, Blankfein said in November, whilst Chief Financial Officer David Viniar echoed the remarks earlier this week after Goldman said that trading revenue fell 25% from the third quarter to $3.06 billion in Q4 of 2011.

“You just have to manage the business carefully and understand it’s going to have those kinds of swings. I don’t think the lower numbers are permanent. I think when things come back, these numbers will boom again”, Dimon told reporters.

S&P 500 sees best rally since 1987

2012-01-19T04:01:05+00:00

S&P 500 sees best rally since 1987

US stocks are seeing the best start of a year since 1987, as investors are hyped on speculating that the world's largest economy is well insulated from Europe’s debt crisis.

The S&P 500 gained 4%, the highest rally since it rose 10% over the first 11 days of 1987, according to data. The S&P 500 also advanced 7 of the first 8 days in 2012, a phenomenon that occurred only eight times since 1900, according to data compiled by JPMorgan.

Stocks are therefore overcoming last year's weaker corporate earnings, as improvements in hiring, manufacturing and car sales extended the largest fourth-quarter advance since 2003.

Notably, the 4 companies that showed the 10 largest declines in the S&P 500 last year, are among the 10 biggest gainers in 2012. Netflix, the movie service, climbed 42%, First Solar is up 27%, Charlotte gained 22% and Sears Holdings rose 24%.

Furthermore, almost $640 billion have been added to the value of American shares this year and the S&P 500 reached an almost 6-month on Wednesday, as optimistic economic reports outweighed concerns about the downgrades of European nations.

“We’re starting to see that modest economic growth expectation for this year”, Chief Investment Officer James Dunigan commented.

European stocks trade at 5-month high

2012-01-19T01:01:02+00:00

European stocks trade at 5-month high

Most European stocks are upbeat on Thursday, as investors were boosted by a wave of optimism in view of recent developments surrounding the Euro-zone, as well as optimistic US economic data and corporate earnings.

The FTSE 100 gained 0.55%, the Eurofirst 300 added 0.88% and the FTSE 100 All-World equity index is up 0.5%, propelled by factors that are supportive of valuations.

In Europe, hopeful sentiment is building that Greece is very close to a deal with its creditors which will end the imminent chances of a messy default. Meanwhile the IMF yesterday announced that it is looking to expand its funding by at least $500 billion.

Consequently, the Euro is trading at a 2-week high to $1.29130, whilst Italian sovereign bond yields remain below 6.5%, following recent strong auctions. Spain and France debt sales on Thursday were also well-received, seeing strong demand and lower yields.

Furthermore, recent US macroeconomic data also bolstered global growth hopes, following improvements in jobless claims (which dropped by 50,000 to 352,000) and manufacturing.

If you are looking for professional financial advice about your next investment move, speak to a deVere Financial Adviser today.

Moody’s upgrades Indonesia on improved prospects

2012-01-19T09:01:05+00:00

Moody’s upgrades Indonesia on improved prospects

Indonesia, the largest economy in Southeast Asia and one of the emerging markets, has been granted its second credit rating upgrade, as Moody's ratings agency upgraded its debt to investment grade.

Moody's raised Indonesia’s debt rating from Baa3 to Ba1 with a stable outlook, citing the country’s success in shrinking its debt-to-GDP ratio, gains in investment spending, improved prospects for infrastructure development and a well-managed financial system.

“Indonesia's cyclical resilience to large external shocks points to sustainably high trend growth over the medium term”, Moody's said in a statement.

Indonesian officials commented that the upgrade reflects recognition of the fact that Indonesia is now a global financial “safe haven”.

The upgrade also comes after Fitch ratings agency in December returned Indonesia’s rating to the level it lost after the Asian financial crisis.

If you wish to learn more about investing in emerging markets, speak to a deVere Financial Adviser today.

Brazil slashes interest rates to 10.5%

2012-01-19T08:01:27+00:00

Brazil slashes interest rates to 10.5%

The Banco Central do Brasil, has yet again cut its key interest rates for the 4th consecutive time, by 50-basis points to 10.5%, in an attempt to bolster economic growth.

The move comes in response to Brazil’s development bank announcement earlier this month that lending reduced last year. Lower interest rates will thus make it easier for people to take loans, spend money and generate the economy.

Meanwhile, economists believe that the central bank’s cycle of interest rate easing is already yielding results, with GDP in Q4 of 2011 expected to be marginally positive and 2012 economic growth seen as returning to above 3%. Nonetheless, they also stated that the Government wants to use the somewhat slowdown in growth seen last year as an opportunity to continue to reduce Brazil’s real interest rates, which are the highest for any large economy and stabilise inflation.

“The monetary policy committee understands that to mitigate in a timely way the effects coming from a more restrictive global environment, a moderate adjustment in interest rates is consistent with the convergence of inflation to the target in 2012”, the central bank said.

If you wish to learn more about investing in emerging markets, speak to a deVere Financial Adviser today.

EM stocks rallying to highest since November

2012-01-18T03:01:45+00:00

EM stocks rallying to highest since November

Emerging-market stocks have gained to levels last seen on November 14, on the back of positive speculation that Greece is nearing a deal to write down its pile of debt.

The MSCI Emerging Markets Index climbed 0.2% to 974.30, after Greek Prime Minister Lucas Papademos today resumed talks with private bondholders in an attempt to write down some of the country’s debt. Meanwhile, the IMF is proposing to raise its lending capacity by $500 billion in order to insulate the global economy against any worsening of Europe’s debt crisis.

Presented by IMF Managing Director, Christine Lagarde, the estimate will most likely be financed by voluntary ad hoc loans, rather than require all IMF member countries to contribute. The IMF currently has $387 billion in immediately available resources.

If you are looking for professional financial advice about your next investment move, speak to a deVere Financial Adviser today.

Wikipedia stages blackout to block anti-piracy legislation

2012-01-18T02:01:24+00:00

Wikipedia stages blackout to block anti-piracy legislation

Wikipedia, the free online encyclopedia, has joined forces with search engine giant Google to stage online protests against anti-piracy legislation which is currently being discussed in Congress.

In its first coordinated political demonstration towards the legislation, Wikipedia began a global blackout of its English-language sites at 5am, while Google is urging millions of daily visitors on its US homepage to sign an online petition against the Online Piracy Act and the Protect Intellectual Property Act.

“As we saw in the Arab Spring, the internet gives new power to the public to engage in effective grassroots movements to change the world for the better”, said Wikipedia co-founder Jimmy Wales.

Meanwhile, Google stated that, “Like many businesses, entrepreneurs and web users, we oppose these bills because there are smart, targeted ways to shut down foreign rogue websites without asking American companies to censor the internet”.

In contrast, those in favour of the legislation, including media companies, claim that illegal downloads of movies and music from the internet are costing billions of dollars per year and killing thousands of jobs.

The Online Piracy Act is an effort to fight online trafficking of copyrighted intellectual property and counterfeit goods. The Protect Intellectual Property Act provides additional tools to curb access to "rogue websites dedicated to infringing or counterfeit goods".

Emerging economies to grow 5.4% in 2012, developed 1.4% - World Bank

2012-01-18T11:01:30+00:00

Emerging economies to grow 5.4% in 2012, developed 1.4% - World Bank

The World Bank, the international financial institution that provides loans to developing countries, has just announced that it is predicting economic growth of 5.4% for emerging countries in 2012 and 1.4% for developed countries.

On a broad scale, the World Bank also said that the over-all global economy is likely to grow by 2.5% in 2012 and 3.1% in 2013.

The organisation explained that lower inflation had been good news for developing countries but warned that, “Developing countries need to evaluate their vulnerabilities and prepare for further shocks, while there is still time”. It also predicted a 0.3% contraction for the Euro-zone in 2012.

“The importance of contingency planning cannot be stressed enough”, World Bank Chief Economist Justin Yifu Lin said.

If you wish to learn more about investment products that provide an attractive return, even during flat market performances, speak to a deVere Financial Adviser today.

Dollar drops on signs of economic recovery

2012-01-18T08:01:44+00:00

Dollar drops on signs of economic recovery

The US Dollar fell against most of its major peers ahead if the anticipated US data which is expected to show later today that industrial production in the world’s largest economy rose, thus reducing demand for safer assets.

“The US economy is showing signs of recovery”, commented Rochford Capital Managing Director, Thomas Averill. He also said that haven currencies such as the USD and the Yen “will come under a bit more pressure” over the next 12 months.

The Euro therefore gained versus the Greenback, as well as the Japanese Yen, for the second consecutive day after a Greek official announced yesterday that Greece is moving closer to a deal on stabilising its debt. Meanwhile, Prime Minister Lucas Papademos is expected to resume negotiations with private bondholders today.

Moreover, the AUS neared an 11-week high ahead of tomorrow’s report which economists anticipate will show that unemployment decreased in Australia in December.

At the time of writing, the US Dollar is trading at $1.27660 and the Yen valued at 97.87150 versus the Euro.

If you are looking for a more detailed outlook or wish to find out how economic and political news could affect your currency transfers, speak to a deVere FX Manager today.

Israeli hackers attack Arab stock market

2012-01-18T12:01:00+00:00

Israeli hackers attack Arab stock market

According to reports, a group of Israeli hackers who identify themselves as 'IDF Team', claimed earlier today that they have launched an attack on the websites of the stock markets in Saudi Arabia and Abu Dhabi.

Users trying to access the website of the Saudi stock market, Tadawul, late on Tuesday were told that the page could not load, whilst the website of the Abu Dhabi Securities Exchange, ADX, was taking much longer than normal to load.

The attack comes as a reply to a similar hacking assault reported on Monday, claimed by a pro-Palestinian group 'Nightmare', which targeted the websites of the Tel Aviv Stock Exchange, the Israeli national airline El Al and also several Israeli bank websites. 'Nightmare' claims affiliation with 0xOmar, the Saudi-based hacker who ignited the cyber-war by posting online the credit details of thousands of Israelis earlier this month.

In an internet posting on Tuesday, the Israeli hackers declared that, "If the lame attacks from Saudi Arabia will continue, we will move to the next level, which will disable these sites longer term", which may come to weeks or even months. "You have been warned", they said.

deVere Group launches in Lisbon, as part of global expansion

2012-01-17T02:01:08+00:00

deVere Group launches in Lisbon, as part of global expansion

The deVere Group, the World’s Largest Financial Advisory firm, has started the New Year by forging ahead with its ambitious global expansion in announcing that it is to open new offices in Lisbon, Portugal, next month.

The base in the Portuguese capital is the first of 12 new offices that will open in 2012. It is part of a wider, strategic plan to operate a total of 100 within five years to service the company’s continually growing client figures and to keep in-step with the increasing demand for the deVere Group’s services.

deVere Group Director for Western Europe, Mike Coady, says: “To continue to deliver world-class service to a rapidly-expanding number of clients worldwide, we’re delighted to confirm that deVere Group will open in Lisbon in February”.

He adds: “We offer locally-based expert financial advisors who are part of an established, global organisation to best serve the needs of our existing and potential clients.

Whilst the economic woes of Portugal as a whole have been well-documented, Lisbon remains an extremely vibrant business hub, with expatriates being some of the city’s leading employers, top-earners and major investors.

In addition, it is the ideal location from where we can reach Portugal’s tens of thousands of foreign residents in other areas of the country, such as the Algarve.

Since the economic downturn, there has been an increasing awareness, especially amongst expats, of the need to seek professional, independent financial advice if they are to maximise their wealth. Since those who live abroad require a completely different planning strategy to their counterparts in the UK, the deVere Group believes that tailor-made financial solutions should be devised with the client wherever they may be”.

With more than 60 offices worldwide, the deVere Group has a truly global presence. The Lisbon office will join the firm’s four existing offices (Marbella, Madrid, Barcelona and Denia) on the Iberian Peninsula.

-End-

UK inflation drops to 4.2% in December

2012-01-17T10:01:26+00:00

UK inflation drops to 4.2% in December

According to the Office for National Statistics, the rate of Consumer Prices Index inflation in the UK fell to 4.2% in December, a 0.6% drop from a month earlier.

Moreover, the Retail Prices Index inflation fell to 4.8% from 5.2%, the biggest monthly drop since April 2009, and the lowest rate since June 2011, mainly due to lower fuel prices and cheaper clothing. Nonetheless, food prices rose by 1.4%.

Analyst Chris Williamson commented that further falls in inflation will be welcomed in order to reduce the squeeze on incomes and provide a much-needed boost to economic growth in 2012.

Despite the downturn, the impact of the 4.2% UK inflation rate on investments can be quite significant, especially as many investors are still forced to endure low real interest rates. Higher inflation with low interest rates means that most cash investors are losing money in real terms. With the UK base interest rate still at 0.5%, cash investments are being virtually eroded. If you wish to learn more structured products that could potentially offer much more attractive returns even in a flat market, speak to a deVere Financial Adviser today.

Markets on a high note following positive data

2012-01-17T08:01:17+00:00

Markets on a high note following positive data

Following a series of positive data from the world’s second largest economy, indicating that the Government is progressing with efforts to bolster the stock market, Shanghai soared 4% and Europe opened in the green.

The FTSE All-World equity index is also up 0.9%, FTSE 100 gained 0.75% and the FTSE Eurofirst added 0.60%, as a broad “risk-on” mindset has swept the dealing desks on Tuesday.

Moreover, assets which that tend to display a high beta to global growth hopes are also seeing demand, with the Australian Dollar up 0.9% and Copper surging 3% to $3.74. Conversely, perceived havens such as the US Dollar are under pressure, with the dollar index down 0.6% and thus, Gold gained 1.3% to $1,665 an ounce.

Investors commented that the positive news from China has somewhat shifted the focus away from the Euro-zone woes, at least for the time being.

Notably, the Euro is up 0.8% to $1.2763 and Italian 10-year yields are down 5 basis points to 6.57%.

If you are looking for professional financial advice on your next investment move, speak to deVere Financial Adviser today.

China GDP grows 8.9% in Q4, heading for soft landing

2012-01-17T12:01:00+00:00

China GDP grows 8.9% in Q4, heading for soft landing

The world’s second largest economy expanded 8.9% in the fourth quarter of 2011, as the country continues to battle inflation to cool economic growth.

Most Analysts therefore concluded that China has successfully managed to engineer a “soft landing”, as price-increases stabilised from a peak of 6.5% in July to 4.1% in December. The drop in inflation figures was welcomed as the Chinese economy was seen as growing too fast, too soon.

Nonetheless, officials said that the challenges to stabilise economic growth will continue this year, as China enters the year of the dragon. “In terms of the domestic and international situation, 2012 will be a year of complexity and challenges so we should be fully prepared”, said Ma Jiantang, Spokesman for China’s National Bureau of Statistics.

Economists however also warned that the US and crisis-hit Europe are China’s biggest markets and consequent to their respective fiscal troubles, export growth to both regions is slowing.
“The authorities are clearly still trying to navigate between the twin dangers of over-stimulating the economy again and causing the current slowdown to sharpen dangerously”, said Economist Stephen Green.

If you are looking for advice about investing in the complex markets of Asia, speak to a deVere Financial Adviser today.

Emerging markets to receive rate upgrades

2012-01-16T03:01:49+00:00

Emerging markets to receive rate upgrades

Emerging market growth is still significantly outperforming developed markets, with a growth rate of 4.6% in 2012, compared to a mild recession in Europe and 1.8% growth in the US and thus, a credit rating upgrade is expected for developing economies, according to JP Morgan Gobal Head of Emerging Markets Debt Pierre-Yves Bareau.

Ratings upgrades for emerging market countries are expected, as rating agencies are recognising stronger economic fundamentals such as those in China, Russia, Turkey, Peru and Uruguay.

Bareau also explained that Emerging markets have the ability to stimulate their economies through both monetary and fiscal policies, should this be necessary, whilst headline inflation rates are expected to continue falling in the first half of the year, allowing central banks to cut interest rates, such as in Brazil, Chile, Mexico, Peru, Indonesia, Israel and Poland.

“Currently, our valuation metrics indicate that all EM debt sectors are cheap”, he added.

If you wish to learn more about investing in Emerging Markets, speak to a deVere Financial Adviser today.

Carnival Cruise ship sinking costs $95 million

2012-01-16T12:01:08+00:00

Carnival Cruise ship sinking costs $95 million

Carnival Cruise Lines, the British-American cruise liners giant, has just confirmed that the sinking of the Costa Concordia is expected to cost up to $95 million, pushing its shares down 18% in early trading.

Costa Concordia, the ship that ran aground near Giglio Island on Friday night off Italy's coast, reportedly had 3,200 passengers and 1,000 employees on board. At the time of writing, the death count reached 6 people.

Meanwhile, reports from Italian press have emerged that the Captain of the Italian cruise ship, Francesco Schettino, passed close to its rocky shores to please the Head Waiter with a good view of his homeland. The ship's operator said that he committed “errors of judgement”.

Furthermore, in a statement to the London Stock Exchange, Carnival said that “The vessel is expected to be out of service for the remainder of our current fiscal year if not longer...For the fiscal year ending November 30, the impact to 2012 earnings for loss of use is expected to be approximately $85-$95m or $0.11-$0.12 per share”.

London to become leading centre for trading Yuan

2012-01-16T10:01:14+00:00

London to become leading centre for trading Yuan

The UK Treasury has announced plans to make London the leading international centre for trading the Yuan, in a bid to bring billions of pounds into the City, as China continues to relax its strict controls on the value of its currency.

UK Chancellor George Osborne said on his visit to Hong Kong on Monday that, “London is perfectly placed to act as a gateway for Asian banking and investment in Europe” and is holding talks with his Chinese counterpart “on establishing London as the new hub for the Renminbi market as a complement to Hong Kong”.

Meanwhile, Treasury officials stated that the new partnership with Hong Kong will establish London as the major centre for trading the Chinese currency outside China and Hong Kong, as well as the world's largest centre for foreign exchange.

According to currency strategists, the relaxation of strict state controls is bound to set the Yuan to become a major, globally-traded currency, in keeping with China's status as the world's second largest economy. Trade transactions settled in Yuan are expected to reach around a trillion dollars (£650 billion) by 2020.

If you have investments linked to a foreign currency, speak to a deVere Financial Adviser today to learn more about your next investment move.

Euro falls after a series of Euro-zone credit rating cuts

2012-01-16T07:01:21+00:00

Euro falls after a series of Euro-zone credit rating cuts

The Euro weakened to an 11-year low versus the Yen, after credit rating agency Standard & Poor’s on Friday stripped off France’s top credit rating and cut eight other Euro-zone nations.

The European shared currency continued a six-week-long drop against the US Dollar, as concern that Europe’s financial turmoil will intensify boosted demand for the safety characteristics of the Greenback. Concerns mounted as S&P on Friday lowered the top ratings of France and Austria by one level to AA+ with “negative” outlooks, while affirming the ratings of countries including Germany, Belgium and the Netherlands. The rating agency also downgraded Italy, Portugal, Spain and Cyprus by two levels and Malta, Slovakia and Slovenia by one level.

“Those downgrades provided another excuse for the speculative community to add to their short positions in euro”, (bets that the Euro will decline in value), Currency Strategist Mike Jones said. The downgrades came ahead of a series of debt auctions scheduled for this week, including France’s bill sale today.

The Euro is trading at $1.26430 at the time of writing.

If you have investments linked to the Euro and are looking for professional financial advice, speak to a deVere Financial Adviser today.

deVere expands further in Eastern Europe with 2 new offices in February

2012-01-13T05:01:10+00:00

deVere expands further in Eastern Europe with 2 new offices in February

The deVere Group, the World’s Largest Independent Financial Advisory, is very pleased to announce that it is yet again expanding its roots in Eastern Europe with two new offices in Kiev and Budapest.

deVere Regional Manager for Eastern Europe, Mr Darren Height, confirmed that Senior Consultant Gerard Campbell from the deVere Moscow office will move to Ukraine to head the Kiev operation, after over 2 years working for the company.

Both the Kiev and Budapest offices are expected to be fully open for business in February.

“This is an exciting step for deVere in Eastern Europe. Demand for our services has been building in both Kiev and Budapest for some time and we are pleased to be putting permanent offices in place, both to service clients and grow our business”, Height said in a statement.

The Group’s expansion therefore continues to confirm its commitment to be within easy reach for its ever-growing international customer-base, which has today risen to over 60,000 clients across 100 countries around the globe. deVere Group has over 50 offices worldwide.

-End-

Weekly Currency Update 13-01-12

2012-01-13T03:01:27+00:00

Weekly Currency Update 13-01-12

Europe

As a result of an announcement made by the ECB’s President Mario Draghi, the shared currency reached a one-week high versus the Dollar. Draghi said that policy makers have avoided a credit shortage and that Spain succeeded in selling almost twice of its maximum target at a note auction. The President of the ECB also said that he saw signs of stabilisation in the region.

Such good news made the Euro rebound from a 16-month low versus the Dollar and near an 11-year low versus the yen. In addition, this strengthening of the Euro also happened after industrial production in the Euro-zone declined by less than economists forecast.

The common currency climbed 0.8% to $1.2814 in New York and reached $1.2845, the highest since Jan 5, after falling to $1.2662 yesterday, the lowest since September 2010.

North America

US stocks finished with modest gains earlier this morning with the S&P 500 closing at a 5-month high for the fourth day, as investors continued to keep faith that Europe would get through its debt difficulties. The S&P 500 has risen 1.4%, but has added only 0.3% since Tuesday, as investors are still awaiting signs of recovery of the US economy and a progress towards resolving the European debt crisis. The Dow Jones industrial average gained 21.57 points (0.17%) to 12,471.02 and the Nasdaq Composite Index rose 13.94 points (0.51%) to 2,724.70.

Canada’s Dollar dropped against most of its major peers amid concerns that its largest trading partner, the US, will experience a weaker economic growth than that forecasted. The Loonie weakened after sales at US retailers in December rose 0.1% due to cheaper fuel prices and holiday discounting that helped hold down the value of goods sold.

Canada’s Dollar was little changed at C$1.0191 per US Dollar after gaining as much as 0.6%. One Canadian dollar buys 98.13 US cents.

Around the world

Positive headlines from the other side of the globe that the debt auctions in Europe were successful, added to the ECB’s decision to leave interest rates unchanged, suggesting that officials are not that worried about the situation in the euro-zone, resulted in higher Asian stock markets today.

As a matter of fact, Japan’s Nikkei Stock Average rose 1%, South Korea’s Kospi Composite climbed 0.4%, Hong Kong’s Hang Seng Index was flat and India’s Sensex advanced 0.5%.

Also, South Korea’s Won extended gains after the central bank kept borrowing costs unchanged for a seventh month to support the economy. The Won gained 0.6% to 1,151.53 per Dollar and reached its strongest level since Jan 5 at $1,150.78.

Elsewhere, the Australian and New Zealand Dollars dropped against most of their 16 major counterparts following concern that US economic growth could be weaker than predicted. Australia’s Dollar, also known as the Aussie, slid 0.2% to $1.0309 from yesterday, when it traded as high as $1.0378, the strongest level since Jan 4. New Zealand’s Dollar slipped 0.4% to 79.07 US cents yesterday.

If you are looking for a more detailed outlook or wish to find out how economic and political news could affect your currency transfers, speak to a deVere FX Manager today.

JP Morgan net income rises to record $19 billion

2012-01-13T03:01:12+00:00

JPMorgan net income rises to record $19 billion

JPMorgan Chase & Co, which is currently the largest US bank by assets, has just announced that net income for the total of 2011 was a record $19 billion, 9% higher than in 2010, whilst JPMorgan shares gained 11% this year through yesterday.

In the much anticipated statement today, JP Morgan however also that whilst net income for the year increased 9%, Q4 profit fell 23%, as a result of a decline in trading revenue. Furthermore, in the fourth quarter of 2011, net income was $3.73 billion, amounting to 90 cents per share, compared to $4.83 billion, or $1.12, in the same period a year earlier.

JP Morgan Chief Executive Officer Jamie Dimon said that the investment-banking business fell 30%, including an 18% drop to $4.36 billion revenue in trading, as corporate clients remained cautious on concern that Europe’s debt crisis would lead to an economic slowdown. “We believe these returns were reasonable given the environment, although the return for the fourth quarter was modestly disappointing”, he added.

UK savers lose £44.5 billion as interest rate remains 0.5%

2012-01-13T08:01:14+00:00

UK savers lose £44.5 billion as interest rate remains 0.5%

UK bank savers are losing out on £44.5 billion because of the widening gap between inflation and the Bank of England interest rate, according to Save our Savers campaign group which believes that it is the right of every citizen to save to secure their future and that it should be the aim of every Government to encourage saving.

The spokesman for Save Our Savers, Simon Rose, said that, "It is unfair to confiscate £44.5 billion annually from savers and pensioners and transfer it to those in debt; to penalise those who have struggled to put something by in order to support those who ran up debts and caused this financial crisis; to reward debt and penalise savings".

The comments come as the BOE yesterday decided to maintain its key interest rates at 0.5%, a relatively low interest rate in order to encourage spending. The banks also said that the quantitative easing programme will remain at £275 billion for the time being, despite calls from the British Chambers of Commerce to increase its support with a £50 billion top-up to QE.

Meanwhile, the European Central Bank yesterday also maintained its interest rate at a record low of 1%.

Higher inflation with low interest rates means that most cash investors are losing money in real terms. With the UK base interest rate still at 0.5%, cash investments are being virtually eroded. Financial Advisers therefore believe that alternative investment products that offer a potentially much higher return rate even in a flat market, such as Structured Products, are far more attractive for savers. If you wish to learn more about Structured Products, speak to a deVere Financial Adviser today.

Europe averts credit crunch, stability emerging – Draghi

2012-01-13T07:01:31+00:00

Europe averts credit crunch, stability emerging – Draghi

ECB President Mario Draghi yesterday said that Europe’s central bank has successfully averted a serious shortage of credit and that positive signs that the economy is stabilising are indeed emerging.

“According to some recent survey indicators, there are tentative signs of stabilization of economic activity”, Draghi told reporters yesterday in Frankfurt after the ECB kept its benchmark interest rate at 1% following two straight reductions. However, he also assured that the ECB remains “ready to act” if the need arises.

Economists commented that such signs of economic resilience thus give the ECB more room to assess the impact of its previous stimulus measures to date, which include lending a record amount of cash to banks that Draghi claims was crucial to prevent a “serious” credit contraction. He also noted that borrowing costs for Governments across the 17- nation region have dropped.

Yesterday, the Euro climbed to $1.2790 in Frankfurt, it is now trading 0.36% higher to $1.2860.

If you have investments linked to the Euro and are looking for professional financial advice about your next investment move, speak to a deVere Financial Adviser today.

Grain stocks in demand as food prices rise

2012-01-13T12:01:00+00:00

Grain stocks in demand as food prices rise

The threat of food inflation has somewhat abated as high prices for grains have moderated consumption and as better crop yields in Europe and Russia replenished grain stocks.

Wheat prices in Europe rose on Friday, in line with US futures, as grain markets steadied after plunging in the previous session when the US government stunned investors with larger-than-expected estimates of US and world supply.

According to the United Nation's Food and Agriculture Organisation, its food index fell last month to its lowest level in more than a year, reflecting a reduced food inflation rate across Asia. Concurrently, the US reported that its domestic production and stocks of corn, which is a key commodity for the global food chain, were higher than previously thought, thus sending prices sharply down.

“There are a number of indicators that suggest that food inflation is going to abate”, said Richard Feltes at US brokerage RJ O’Brien in Chicago. Moreover, Agricultural Economist Darrel Good explained that, “The increase in commodity prices that we have experienced in recent years has now been pretty much fully passed through to the consumer”.

Record Food Price

Meanwhile, the price of corn hit a record high of $7.99¾ in June. Since then, prices have fallen by more than 23%. The drop in corn, wheat, rice, soyabeans and other agricultural commodities’ prices therefore pushed the FAO food index in December to its lowest since October 2010.

If you wish to learn more about alternative investing that only the industry's leaders can offer, speak to a deVere Financial Adviser today.

Spain sells double its target at bond auction

2012-01-12T03:01:55+00:00

Spain sells double its target at bond auction

Spain has today sold 10 billion Euros worth of bonds at auction, doubling its 5 billion Euro target, with a new benchmark 3-year note due July 2015 to yield 3.384%, down from the 5.187% yield it paid at a similar auction in December.

Meanwhile, Italy also successfully placed 12 billion Euros of bills on the market, selling 1-year bills at 2.735%, less than half the 5.952% it paid on similar maturity securities on Dec 12. Both countries therefore somewhat eased concern that they may struggle to finance their debts.

The successful auctions come as Italian Technocratic Prime Minister Mario Monti and his Spanish counterpart Mariano Rajoy are imposing austerity measures to convince investors that they can indeed put their nations’ finances in order and weather the sovereign debt crisis.

Furthermore, the ECB last month lent 489 billion Euros of 3-year funds, in a move that would allow banks to buy more government debt. The ECB lending “means there is abundant liquidity in the system and this is something that helps ease the supply pressure”, Economist Silvio Peruzzo commented.

If you are looking for professional financial advice about positioning your portfolio for 2012, speak to a deVere Financial Adviser today.

ECB, BOE hold interest rates

2012-01-12T01:01:09+00:00

ECB, BOE hold interest rates

The European Central Bank, as well as the Bank of England, have held their respective interest rates steady, following upbeat data that gave them scope to pause.

After two consecutive rate cuts, ECB policy makers meeting in Frankfurt decided to kept the benchmark interest rate at a record low of 1%, as predicted, following signs of economic resilience which gave the ECB room to assess the impact of its stimulus to date. ECB President Mario Draghi is expected to explain the decision at a 2:30 p.m. press conference.

Concurrently, the Bank of England also left the UK monetary policy unchanged, after the rate-setting Monetary Policy Committee concluded its two-day policy meeting with a decision to leave the bank's key interest rate at a record low of 0.5% and the target for its asset purchase program at £275 billion.

“We’ve had a couple of indications that things may not be as bad in 2012 as people expected them to be”, Economist Tobias Blattner commented.

China inflation falls to 4.1%, sets stage for looser policy

2012-01-12T08:01:56+00:00

China inflation falls to 4.1%, sets stage for looser policy

Inflation in China edged down to 4.1% in December, the lowest in 15 months, therefore setting the stage for a continuation of policy loosening.

Consumer prices in the world’s second largest economy thus rose by 4.1% from a year earlier, marking the 5th consecutive month of receding inflation. “This continued moderation in price pressures is a welcome development and will increase the scope for policy to respond”, Economist Brian Jackson commented.

Meanwhile, the Chinese Government had already opted to gradually and cautiously loosen monetary policy last year, following a massive stimulus that was unleashed when the global financial crisis broke in late 2008. The 2011 measures included: Beijing trimming the portion of deposits that banks must hold in reserve, as a way of releasing more liquidity into the economy; the central bank had also suspended sales of Government bonds in open-market operations, as another way of ensuring that there is enough cash remaining in the financial system. More importantly, the Government had instructed banks to increase their lending, which was effective measure as data showed that there was a rise in lending in December.

The Shanghai Composite Index jumped 0.6% soon after opening as investors welcomed the prospect of additional easing.

If you are looking for more information about investing in Asian markets, speak to a deVere Financial Adviser today.

RBS cuts 3,500 jobs to shrink investment arm

2012-01-12T07:01:28+00:00

RBS cuts 3,500 jobs to shrink investment arm

The Royal Bank of Scotland, the UK retail bank, has confirmed that it is planning to cut 3,500 jobs, as part of a reorganisation of the company and to shrink its investment banking arm.

The cuts come after RBS had already announced earlier to cut 2,000 jobs. The Bank said that it plans to split its ‘wholesale banking’ business, which provides services such as investment banking services, into separate ‘markets’ and ‘international banking’ divisions. The markets division is set to focus on the bank's traditional strengths of debt, currency and money markets, whilst the wholesale banking division will provide services for the bank's largest clients.

RBS also said that it will close or sell off other business lines, such as those dealing with shares and stock markets, as well as its business advising companies on mergers and acquisitions.

Germany grew 3% in 2011, despite crisis

2012-01-11T11:01:02+00:00

Germany grew 3% in 2011, despite crisis

Germany, the EU pillar that holds the largest economy in the periphery, posted 3% economic growth in 2011 even amidst the Euro-zone crisis, twice as much as the US and the rest of the zone.

The German federal statistics office reported that even as the Euro-zone debt crisis escalated, 2011 had only seen a modest slowdown from the 3.7% growth in the previous year, thus highlighting the robustness of its economy. Moreover, public deficit also fell to just 1% of GDP, ahead of the 3% EU limit and down from 4.3% in 2010.

Germany had “again come out well from the crisis”, the statistical office’s President Roderich Egeler said.

On the other hand, the US economy is estimated to have grown by 1.6% in 2011, while the Euro-zone economy expanded by 1.5%.

Meanwhile, earlier today Germany received €8.97 billion in bids for 5-year notes at auction, more than double the maximum sales target of €4 billion.

If you wish to learn more about positioning your portfolio for 2012, speak a deVere Financial Adviser today.

Google signs its biggest deal ever with Spanish bank

2012-01-11T10:01:29+00:00

Google signs its biggest deal ever with Spanish bank

Search engine giant Google has today won its biggest enterprise contract ever, with Spanish bank Banco Bilbao Vizcaya Argentaria SA, in an effort to win over business clients from Microsoft.

All 110,000 employees of Spain’s second-largest lender, based in over 26 countries, will now start using the Google Apps offering, including Gmail, Calendar, Docs and Website-creation program Sites.

The deal marks Google’s increasing efforts to step up competition with Microsoft by selling business software as an alternative to Office programs, following slowing growth from its traditional online advertising business. “We are confident we can have more and more larger companies from all over the world because of the benefits we are bringing”, Google Enterprise VP for Europe, Sebastien Marotte said.

On the other hand, BBVA selected Google over other systems because of a better price, security and experience in the market, the company said. Spanish companies such as BBVA, need to cut costs and improve productivity amid a weakening economy with the highest unemployment rate in the European Union.

“Our main goal is to promote innovation and improve our employees’ efficiency and productivity”, Director for BBVA’s Innovation Observatory, Carmen Lopez said. “We live in a very competitive and fast-changing environment and we want to operate in a faster and more collaborative way”.

Both companies declined to comment on the value of the deal.

If you wish to learn more about investing in the ever-growing technology market, speak to a deVere Financial Adviser today.

Europe’s €30trn pension bomb grows, as expected income reaches 5-year low

2012-01-11T09:01:25+00:00

Europe’s €30trn pension bomb grows, as expected income reaches 5-year low

According to a study commissioned by the European Central Bank, state-funded pension obligations in 19 of the EU nations has ballooned to almost €30 trillion in projected obligations to their existing populations.

Of which, the report shows that Germany accounts for €7.6 trillion and France €6.7 trillion of the liabilities. Moreover, the ECB predicts that as the rising life expectancy keeps adding to pressures, the proportion of economic output devoted to giving out retirement benefits is projected to rise to 14% by 2060. “This is a totally unsustainable situation that quite clearly has to be reversed”, Researcher at the Peterson Institute for International Economics, Jacob Funk Kirkegaard said. Analysts also commented that the increased retirement ages and lower benefits must be part of any package to hold the 17-nation Euro-area together.

Meanwhile, according to a study for Prudential, the average retirement income that people in the UK expect to receive has reached a five-year low of £15,500. Furthermore, one in five of those retiring this year expect to have to get by on less than £10,000, this compares to the 2008 respondents who anticipated a yearly income of around £18,600.

This therefore continues to prove the importance of planning your own retirement finances privately, as companies and Governments no longer afford to provide a sustainable pension fund. Speak to a deVere Pension Expert today to learn more about planning for the retirement that you deserve.

Gold to hit $1,940 an ounce in 2012 - Goldman

2012-01-10T01:01:48+00:00

Gold to hit $1,940 an ounce in 2012 - Goldman

Goldman Sachs Group, the global investment banking and securities firm, has stated that it plans to remain “overweight” on commodities as investors seek a hedge against Europe’s debt crisis.

Head of Commodities Research Jeffrey Currie said at the 2012 Strategy Conference in London today that Gold futures on the Comex in New York may climb to $1,940 an ounce in 12 months, as US interest rates and inflation are expected to remain low. Low interest rates therefore increase the appeal of the bullion since they generally reduce the prospect of returns on bonds. “It is the sharp drop in price that makes it more attractive”, he added.

Meanwhile, demand for Gold strengthened for most of 2011, as Europe’s debt crisis widened and the US Federal Reserve pledged to keep interest rates near zero until at least mid-2013. At the time of writing, Gold per ounce is priced at $1,636.68.

Furthermore, Morgan Stanley also named Gold among its top picks today, citing that the bullion may average a record $2,200 an ounce. However, Currie explained that Gold prices are unlikely to move higher than $1,940, unless there is a “much weaker real rate environment” driven by inflation.

If you wish to learn more about investing in commodities, speak to a deVere Financial Adviser today. You may also download our Free Guide to Investing in Gold.

European stocks in demand on global growth hopes

2012-01-10T12:01:19+00:00

European stocks in demand on global growth hopes

The FTSE All-World equity index is up 0.8%, whilst bourses in Europe are again seeing gains with the Eurofirst 300 up 0.9%, after a strong performance in Asia sparked an upbeat mood.

Earlier today, Shanghai surged 2.7% on speculation that Beijing will loosen monetary policy to counteract weakening domestic demand, after December imports did not match up to expectations. On the other hand, weekend data showed that money supply in China is growing faster than forecast, as the Chinese Government continues to making headway in ensuring that the world’s second largest economy does not suffer a hard landing.

The bulls are therefore now arguing that the global economy can indeed overcome the impact of the lingering Euro-zone stresses. As a result, assets that traditionally perform well when risk appetite is back on, are seeing an influx of funds. The Australian dollar, for example, is up 0.8% to $1.0321 and Brent crude gained 0.5% to $113.05 a barrel.

Conversely, the Dollar index is down 0.2% and German Bunds are a tad softer, with 10-year yields up 2 basis points at 1.868%.

If you wish to learn more about positioning your portfolio for 2012, speak to a deVere Financial Adviser today.