Global finance news from Investment International, the leading offshore investment magazine http://www.investmentinternational.com Tue, 07 Feb 2012 02:46:57 +0100 FeedCreator 1.7.3 http://www.investmentinternational.com/images/M_images/joomla_rss.png http://www.investmentinternational.com Global finance news from Investment International, the leading offshore investment magazine http://www.investmentinternational.com/index.php?option=com_content&task=view&id=5012&Itemid=27 Barclays Stockbrokers’ clients have revealed the sectors they believe offer the best investment opportunities for 2012.Investors were asked to name the sector they felt would offer the best prospects for their portfolio this year. The research revealed Oil and Gas topped the list, with backing from 21% of respondents.The Financial sector took second spot with 18% of the vote, followed by the Mining sector in third place (15%) and Utilities in fourth spot (8%). The research also found investors are bullish in their outlook for the FTSE 100.  Barclays Stockbrokers’ clients were asked for their outlook for the FTSE in 2012, and responses show that almost half of investors (46%) said they had a bullish outlook and were confident that the FTSE will rally.A third (30%) said they were undecided on their FTSE outlook for the year, while 24% said they were not confident in FTSE performance in the year ahead. Paul Inkster, co-head of product, Barclays Stockbrokers, said: “It is great to see our self-directed investors have a positive outlook for the sectors that will deliver for their portfolios this year, and are optimistic about the performance of the FTSE 100.“With returns on cash consistently low it is encouraging to see investors confidently seeking out the right investment opportunities for them, and capitalising on market volatility where possible.” Thu, 26 Jan 2012 13:11:57 +0100 http://www.investmentinternational.com/index.php?option=com_content&task=view&id=5011&Itemid=27 New research from Legal & General Investments reveals that more than a quarter (28%) of investors rated ‘investment provider’ as the main influencer when choosing a fund. The findings come from Legal & General Investments’ annual What Matters Investment Index which aims to investigate the views of the everyday investor, and track how sentiment and behaviour changes over time.Other factors that investors consider when selecting an investment fund include past performance, which was the choice for almost a quarter (23%) of respondents. More than one in eight (14%) look at the fund manager before choosing a fund.Fund fees and charges were a consideration for less than one in ten (8%) investors, highlighting the willingness of investors to accept fees and charges when a fund’s performance meets their requirements.Geographical coverage of the fund was important to 6% of investors. Simon Ellis, managing director, Legal & General Investments, said: “The result of this research highlights how important the strength of the investment house is for customers when making investment decisions.“At a time of significant market volatility and low returns a strong brand with an established heritage is well positioned to help consumers navigate the troubled economic waters.” Thu, 26 Jan 2012 13:09:40 +0100 http://www.investmentinternational.com/index.php?option=com_content&task=view&id=5010&Itemid=27 Chinese New Year is on a different date each year because the lunar calendar does not have any connection with the solar calendar. Gung hay fat choy is the traditional Chinese greeting for new year. It means: Best wishes and congratulations. Have a prosperous and good year. The Chinese have identified 12 animals to express zodiacal time. The choice of these animals is based on a tale from Chinese mythology that has been given several interpretations. One version is: The rat was assigned the job of inviting a variety of animals to a banquet to meet the Jade Emperor, who rules the heaven and the earth. At this special meal the animals would have a chance to be selected for the zodiac signs. The animals who showed up found a place in calendar. The cat apparently never found a spot because the rat fooled him into believing that the banquet was one day later; hence since that day the rat and the cat have been enemies for eternity. Based on your year of birth, find out which sign you belong to:The Dragon: 1916, 1928, 1940, 1952, 1964, 1976, 1988, 2000, 2012The Snake: 1917, 1929, 1941, 1953, 1965, 1977, 1989, 2001The Horse: 1918, 1930, 1942, 1954, 1966, 1978, 1990, 2002The Sheep: 1919, 1931, 1943, 1955, 1967, 1979, 1991, 2003The Monkey: 1920, 1932, 1944, 1956, 1968, 1980, 1992, 2004The Rooster: 1921, 1933, 1945, 1957, 1969, 1981, 1993, 2005 The Dog: 1922, 1934, 1946, 1958, 1970, 1982, 1994, 2006The Pig: 1923, 1935, 1947, 1959, 1971, 1983, 1995, 2007The Rat: 1912, 1924, 1936, 1948, 1960, 1972, 1984, 1996, 2008The Ox: 1913, 1925, 1937, 1949, 1961, 1973, 1985, 1997, 2009The Tiger: 1914, 1926, 1938, 1950, 1962, 1974, 1986, 1998, 2010The Rabbit: 1915, 1927, 1939, 1951, 1963, 1975, 1987, 1999, 2011 Wed, 25 Jan 2012 16:19:55 +0100 http://www.investmentinternational.com/index.php?option=com_content&task=view&id=5009&Itemid=27 “Real estate, particularly England, will have very apparent increase in value, whereas Netherlands, Belgium and Germany will have less of an increase,” said Sherman Tai. “Eastern Europe, countries like Iceland and Norway, will still be weak in economy and real estate. On the other hand, Southern European countries like Italy, Greece, Turkey, and other countries will have declines, which will be initial, then subsequently they will become stronger later on.”While there is no hope of eliminating the Euro, Sherman Tai said it will be weaker this year, compared to the USD, about 1 Euro to 1.3 – 1.41 USD, with rather large changes. But he added: “The Great Britain Pound will still be a strong currency, of 1 GBP to 1.55 – 1.65 USD. On average, the unemployment rate in Europe is still high. Some countries will be in double digit. The British Stock Exchange and Frankfurt Stock Exchange will have the largest fluctuations, but on average may have a 6-8% increase.” Wed, 25 Jan 2012 16:17:58 +0100 http://www.investmentinternational.com/index.php?option=com_content&task=view&id=5008&Itemid=27 Property prices are set to rise, the pound will grow stronger and the British Stock Exchange will have an 8% increase, Chinese fortune teller and feng shui master Sherman Tai has predicted. 2012 is the year of the Dragon and as celebrations continue up and down the country at the start of Chinese New Year Sherman Tai predicted that in 2012 “Europe’s economy is actually not bad”.Sherman Tai added: “Where there are changes that lead to improvement, particularly for Germany, England, and France will perform better. “The decline in banking and insurance in the past year is no longer. Internal consumerism and spending is stable.” Wed, 25 Jan 2012 16:16:49 +0100 http://www.investmentinternational.com/index.php?option=com_content&task=view&id=5006&Itemid=27 TD Direct Investing is giving investors the opportunity to kick-start or boost their investment portfolios with the offer of 10,000 commission-free online and mobile purchases.The offer is available to both new and existing customers who open a new account (Trading, ISA or SIPP) from now until 14th February 2012 - with the free purchases available until 29th February 2012. It is limited to 10,000 buys across all qualifying accounts on a first come, first served basis and applies to UK and international trades made online at www.tddirectinvesting.co.uk or via the TD Trading App for iPhone and iPod touch.Commenting, Stuart Welch, CEO, TD Direct Investing said: “This is the time of year when people are looking to give their finances a shake-up and our offer of 10,000 free purchases provides the perfect opportunity to get their investment portfolios off to a great start. “By giving away commission free purchases the offer can be ideal for those looking to invest for the future. Whether they want to make the most of their annual tax allowance, start investing for their retirement or simply looking to rebalance and build their current investment portfolio TD has a product or service that caters to all of these needs.” Thu, 19 Jan 2012 13:37:57 +0100 http://www.investmentinternational.com/index.php?option=com_content&task=view&id=5005&Itemid=27 Friday evening saw the widely anticipated downgrade of France's sovereign debt rating by Standard and Poor's from triple A to double A plus (with a negative outlook). Austria was also downgraded by the same amount (due to fears of Austrian exposure to Eastern Europe), which leaves only four eurozone countries with triple A ratings:  Germany, the Netherlands, Finland and Luxembourg.Last week also saw the deterioration of negotiations between international creditors and the Greek government on the prospect of taking voluntary haircuts on outstanding Greek sovereign debt.Threadneedle Investments comments on the implications of what is happening in the eurozone.The implications“It is easy to say that these downgrades were already "priced" by the bond markets. That doesn't stop the embarrassment factor for, in particular, the French and Austrian administrations. “Could this mean the end of the "Merkozy" love-in we have seen over the past few months? This is more likely now than before. Sarkozy has an election to fight in May, and it is difficult to argue that France and Germany are equal at this stage of the crisis (if they ever were).“This downgrade drives a wedge into the inner core of the eurozone, with France moving ever closer to becoming a "problem country" rather than a "solution country".“Clearly the loss of triple A by France also has significant negative implications for the creditworthiness of bailout vehicles such as the European Financial Stability Fund, or EFSF - of its €440 billion firepower France accounts for €158.5 billion and Austria €21.6 billion.  The proposed €500 billion permanent rescue, known as the European Stability Mechanism (ESM) also relies on direct capital contributions from its members.“We have argued consistently that a lasting solution can only be found if the Germans allow the ECB to print money and become the lender of last resort for Europe.“Estimates suggest that the deleveraging required by the European Banking Authority (EBA) to achieve target capital ratios in the banking sector will result in a credit contraction of around €4 trillion from the European banking system, unless capital can be raised by other means. “We still consider it very likely that there will be government involvement in this process, à la the UK in 2008/9.  In the UK and the US QE has been successfully deployed to plug this deleveraging deficit - without which these economies would have seen significantly more contraction since the 2008 banking crisis.“Our belief is that the ECB needs to do the same for Europe, in a decisive and direct manner.“The announcement of the Long-Term Refinancing Operation (LTRO) in December has been hailed by many as QE by the back door. So far we have only seen a very small amount of the approximately €480 billion borrowed at the ECB LTRO window in December deployed by the banks that borrowed it.  If this money is used to buy back sovereign and bank debt below par values, then there is a positive effect from both deleveraging and effectively raising bank capital through the capital gain.“The danger is that the European banking system, fearing a banking crisis, hoards that capital in order to maintain liquidity and does not do the quasi QE.  The downgrades make this scenario more likely.“Ultimately we are still waiting for a package which, as well as promoting austerity, also stimulates growth.  This would include unlimited and unsterilised QE from the ECB.  Without this we fear a severe and potentially prolonged recession for the eurozone.What about the Greek situation?“Greece looks like it will now default - the only question is whether this is done in an orderly or disorderly way.“Ironically a Greek exit is likely to strengthen the euro, at least temporarily. There has been a well flagged deposit flight from Greece of roughly €65 billion - one third of total deposits - which suggests that Athens requires a further €10 billion to recapitalise its banking sector.“As the situation in Greece worsens, October's €130 billion rescue package looks increasingly insufficient. A disorderly default, which would trigger instruments such as CDS, could lead to a run on the global financial system with potentially serious unforeseen consequences.“Furthermore with Portuguese debt now rated as junk, how long will it take before markets start to apply the same degree of pressure to Portugal as they have done to Greece?European stock markets“We have been advocating avoiding exposure to domestically focused businesses, regardless of their defensive or cyclical qualities.“We feel that markets are likely to be increasingly discriminating between domestic and global businesses over the coming months. This does not lead us to any significant sector conclusions; rather, the source and sustainability of earnings will be scrutinised at a stock-by-stock basis.“The Q4 earnings season will provide an opportunity to hear how companies are seeing the outlook for profits in the coming quarters.“As expected, results so far have been mixed, with a bias towards the negative. The results season doesn't really start until next week but our expectation is that companies will be cautious with their outlook for 2012 - there are unlikely to be many positive revisions to companies' forecasts.Threadneedle funds“In simple terms our positioning and strategy can be summarised as follows: we are avoiding domestic exposure, avoiding value traps and selectively favouring income where that income is stable and growing. “Most of all we continue to prefer high quality companies which can continue to grow in the current environment. Typically these are companies with higher than average margins, returns on capital and cashflow where we believe there is a sustainable competitive advantage.“We continue to be underweight financials.“This overall positioning is unlikely to change until the policy responses we expect are more likely. When it does change, however, it may change quickly. We therefore need to maintain a nimble approach.“We continue to believe that selectively the opportunities in Europe are very attractive. The good companies continue to be dragged down by the macro situation and are typically priced at a discount to their global peers.“We are not universally defensive in our portfolios, as we believe that a business's geographic and end market is currently more important than its underlying cyclicality.” Thu, 19 Jan 2012 13:33:25 +0100 http://www.investmentinternational.com/index.php?option=com_content&task=view&id=5004&Itemid=27 There was a mass exodus from European and Emerging Market Equity funds during Q4 2011 according to Skandia's latest Investment Trends report. The eurozone debt crisis was rarely out of the news during the period leading to sales of European Equity funds falling by almost a quarter via the Skandia Investment Solutions platform.Emerging Market funds also took a surprise fall with sales decreasing by 19% compared to Q3 2011.The analysis shows a swing back towards both UK and Overseas Fixed Interest funds, increasing 7% and 28% respectively, albeit Overseas Fixed Interest started from a low base.The UK Fixed Interest sector has been the highest selling sector since Q4 2008, and now accounts for nearly 23% of all fund sales through the Skandia platform.   Managed funds are the second most popular sector, accounting for 16% of sales, a 14% increase on Q3 according to Skandia.The Managed sector may have been helped in part by the trend towards risk-targeted funds. Skandia's range of risk-targeted funds continue their rise in popularity, with 4 out of the 6 Spectrum funds now in the top 5% of fund sales, as investors seek managed investment solutions that are directly aligned to the level of risk they want to take in their portfolio. Cash and Money Market funds did see a spike in Q3 (up 121%) but in Q4 sales have levelled off, falling 13%. In terms of risk assets, UK Equity and Global Specialist funds account for 15% and 10% of sales respectively with confidence returning to North American funds with sales increasing by 3%.Commenting, Graham Bentley, Skandia's investment expert, said: "It is encouraging that the spike in Cash and Money Market funds has dropped off, and investors are recognising the opportunities that exist in relatively depressed equity prices.“However, the flight away from European equities is a short term knee jerk reaction in response to negative sentiment created by the eurozone debt crisis. The FTSE Eurotop 300 index is up about 10% since early October so once again this shows the pitfalls of trying to time the market. "In times of stock market uncertainty it is crucial that investors are in well balanced portfolios that match their attitude to risk over the long term. This should give them the confidence to ride out short term volatility. Fixed Interest funds can be used to reduce overall portfolio risk if that is desired, which could account for their continued popularity. "Risk-targeted funds are another great way to gain greater control over the volatility within portfolio. Demand for these funds is reflected in the popularity of managed funds and any investor concerned about volatility should take a look at this relatively new investment solution." Tue, 17 Jan 2012 17:08:45 +0100 http://www.investmentinternational.com/index.php?option=com_content&task=view&id=5003&Itemid=27 Skipton Building Society has launched a new suite of fixed rate bonds with rates on some bonds increasing by up to 0.40%.Commenting, Kris Brewster, Skipton’s head of products, said: “Our fixed rate bonds consistently rank among the most competitive available and we are delighted to be able to reward savers even more with a rate increase on our shorter term products, while continuing to offer excellent value across our bond range.”The new bonds are just the latest competitive products launched by Skipton so far  this year, to encourage and reward people for developing the saving habit. The society has also added a My New Year’s Resolution Saver to its My Savings goal-based account range for a limited time.This offering combines a rate of 2.50% with easy access and the encouragement people need to keep what they are saving up for very much in mind.It means that there are now 13 accounts in the My Savings range – including everything from a ‘My Bills Saver’ to a ‘My Retirement Saver’ and, for those looking forward to a warmer time of year, a ‘My Holiday Saver’.The My New Year’s Resolution Saver replaces the limited edition My Christmas Saver which Skipton launched at the end of November to help people start putting away some cash towards Christmas 2012.Product details for the new suite are as follows:1 Year Fixed Rate Bond Fixed until 15 February 2013£500-£24,999: interest rate 2.85% p.a. AER (was 2.45%);£25,000-£49,999: interest rate 2.95% p.a. AER (was 2.55%);£50,000 plus: interest rate 3.05% (was 2.65%).2 Year Fixed Rate BondFixed until 15 February 2014£500-£24,999: interest rate 3.05% p.a. AER (was 2.85%);£25,000-£49,999: interest rate 3.15% p.a. AER (was 2.95%);£50,000 plus: interest rate 3.20% p.a. AER (was 3.05%).3 Year Fixed Rate BondFixed until 15 February 2015£500-£24,999: interest rate 3.25% p.a. AER (unchanged);£25,000-£49,999: interest rate 3.35% p.a. AER (unchanged);£50,000 plus: interest rate 3.45% p.a. AER (unchanged).5 Year Fixed Rate BondFixed until 15 February2017£500-£24,999: interest rate 3.65% p.a. AER (unchanged);£25,000-£49,999: interest rate 3.75% p.a. AER (unchanged);£50,000 plus: interest rate 3.85% p.a. AER (unchanged). Tue, 17 Jan 2012 16:37:35 +0100 http://www.investmentinternational.com/index.php?option=com_content&task=view&id=5002&Itemid=27 Adrian Lowcock, senior investment adviser at Bestinvest, has reacted to November IMA figures showing the biggest investor retreat from markets for 20 years.Commenting he said: “As 2011 drew to a close there was an increase in risk aversion amid concerns over the eurozone crisis.“This concern over the global economic situation is combined with a deteriorating outlook in the UK as austerity measures start to have an effect. Whilst the net outflow is negative it is relatively small. In comparison the out flow of money invested in equities is of greater significance with outflows of over £850 million in November.“This reflects investor concerns over the state of the economy and the ability of European politicians to address the crisis in the eurozone. Investors have clearly moved money away from higher risk assets to lower risk and less volatile investments such as bonds – which was the highest selling sector in November with new money of £443m being invested along with absolute return funds which also featured highly with new money of £164m being invested.   “Investors continue to find gilts popular which proved to be a good decision in 2011, however even low risk assets can become a bubble and investors can lose money.“With real returns below the level of inflation gilts do not offer an attractive investment at this stage and investors should look to consider reducing exposure to the asset class in favour of higher yielding investments such as bonds or equity income.“Trying to time the market will be incredibly difficult and frequently result in exaggerating the impact of falling markets because it is not easy to buy back in at the right point.“Instead investors should ensure they have a diversified portfolio and their investments meet with their objectives.” Tue, 17 Jan 2012 16:19:44 +0100 http://www.investmentinternational.com/index.php?option=com_content&task=view&id=5001&Itemid=27 By Yuan PhoonProperty investors in the UK should be very selective about the areas they choose to buy in this year, warned Assetz.The property investment adviser said that with rising unemployment and the ongoing eurozone crisis yet to play out, taking a punt on secondary locations could prove risky.It said popular residential areas where there is good infrastructure and a strong employment market, such as most of London and upmarket commuter hotspots around all major cities, would support price growth.In contrast areas that are reliant on manufacturing or the public sector, for example, which may be struggling with high levels of unemployment, would see relatively low transaction levels during 2012 and a fall in values of 5% or even greater.Stuart Law, chief executive of buy-to-let group Assetz, said: “Now is not the time to take a punt on potentially “up and coming” locations, or those that are dependent on sectors which are at risk from high levels of unemployment. “The deepening eurozone crisis is far from over and it will no doubt continue to impact the property market here in the UK by limiting the amount banks are able to lend and stifling consumer confidence."High levels of tenant demand and the lack of first-time buyer finance will continue to underpin the market with rent rises expected in the region of 5%, as increasing numbers of people turn to buy to let as a way to generate a decent income from their cash. “Buying in a strong location will help deliver a reliable rental income and a good supply of quality tenants, albeit alongside only modest capital growth for the time being.”Assetz said rents are expected to continue growing strongly in most areas, in the region of 5% over the next year as restricted mortgage lending and poor employment prospects leave a whole generation of potential first-time buyers with little prospect of buying a home. Tue, 17 Jan 2012 16:11:09 +0100 http://www.investmentinternational.com/index.php?option=com_content&task=view&id=5000&Itemid=27 Despite forecasting that the Bank of England base interest rate will not rise until mid-2014, Lloyds TSB International has increased the rates on its two, three and five year fixed-term deposits.The bank’s own sales data shows that demand for one year FTDs has increased ten-fold in the three months to the end of November, as savers lock in to better interest rates in the medium-term until there is any prospect of base rate rises.The market currently expects that the Bank of England won’t lift the base rate from its current record low until mid-2014.Nicholas Boys Smith, Lloyds TSB International said: “Demand for short and medium term deposits has increased markedly over the past three months. Much of this is due to our improved rates in September, but we’re also aware that many expat savers are trying to make the most of flat-lining base interest rates and the expectation that these rates won’t increase for quite some time.“In 2011 we saw a definite shift towards FTD accounts, particularly those with a one year term, but also those with longer durations,” Boys Smith continued.“In this low interest rate environment, many people have realised they need to make some changes to ensure they’re getting a decent return on their savings.“We expect demand for FTD accounts to continue rising, and with inflation forecast to fall in 2012, it won’t be long before FTD savers are making money in real terms.” Tue, 17 Jan 2012 15:54:22 +0100 http://www.investmentinternational.com/index.php?option=com_content&task=view&id=4997&Itemid=27 Despite forecasting that the Bank of England base interest rate will not rise until mid-2014, Lloyds TSB International has increased the rates on its two, three and five year fixed-term deposits.The bank’s own sales data shows that demand for one year FTDs has increased ten-fold in the three months to the end of November, as savers lock in to better interest rates in the medium-term until there is any prospect of base rate rises.The market currently expects that the Bank of England won’t lift the base rate from its current record low until mid-2014.Nicholas Boys Smith, Lloyds TSB International said: “Demand for short and medium term deposits has increased markedly over the past three months. Much of this is due to our improved rates in September, but we’re also aware that many expat savers are trying to make the most of flat-lining base interest rates and the expectation that these rates won’t increase for quite some time.“In 2011 we saw a definite shift towards FTD accounts, particularly those with a one year term, but also those with longer durations,” Boys Smith continued.“In this low interest rate environment, many people have realised they need to make some changes to ensure they’re getting a decent return on their savings.“We expect demand for FTD accounts to continue rising, and with inflation forecast to fall in 2012, it won’t be long before FTD savers are making money in real terms.” Tue, 10 Jan 2012 16:50:36 +0100 http://www.investmentinternational.com/index.php?option=com_content&task=view&id=4996&Itemid=27 Legal & General Investment Management has launched a range of passive emerging market debt funds responding to client demand.Greater long-term growth dynamics, higher yields and attractive demographics have contributed to an increased interest in emerging market debt in recent years.  As developed nations and their corporations attempt to increase trade and relationship opportunities with emerging markets, this elevation in importance looks set to continue.   Given this backdrop Legal & General Investment Management has launched: •    Emerging Market Passive Local Currency Government Bond Fund – the reference index is the JP Morgan GBI-EM Global Diversified Index.•    Emerging Market Passive USD Government Bond Fund (Hard Currency) – the reference index is the JP Morgan EMBI Global Diversified Index •    Emerging Market Passive USD Government Bond Fund (Hard Currency) – GBP Hedged – the reference index is the JP Morgan EMBI Global Diversified Index, and hedged into sterling. The funds are available to institutional pensions investors who want exposure to emerging market debt which, when combined with an existing investment portfolio, can bring potential diversification benefits.Nick Hodges, business development manager at LGIM said: “These funds have been launched following demand from our clients and trustees who have indicated a significant appetite for passive emerging market debt exposure.“Having researched our options, we have decided that the JP Morgan Indices, which are transparent and rules-based and already widely used, best meet our clients’ needs. I am very confident that these funds will prove extremely popular with both clients and trustees.”   Fri, 06 Jan 2012 16:26:22 +0100 http://www.investmentinternational.com/index.php?option=com_content&task=view&id=4995&Itemid=27 The outlook for 2012 is highly uncertain, with the potential outcomes unusually split between disaster and safety, perhaps now more so than at any other time in recent history, according to Percival Stanion, head of asset allocation at Barings.Commenting on the year ahead, he said: “While we continue to attach only a relatively small probability to a global double dip recession, the ultimate outcome of the current troubled world economy will be messy and we therefore expect markets to remain susceptible to sudden swings in investor sentiment.“On a general level, we are closely monitoring developments in Europe, China and the US as these economies will be the key determinants of the investment landscape in 2012.“The key risk for investors remains the eurozone debt crisis, and its subsequent impact on the banking sector and the availability of credit. We expect European leaders to do enough to stave off a collapse of the banking sector, but the fiscal squeeze will continue and recession in Europe and the UK now looks certain.”While the likes of Greece, Spain and Italy have dominated the headlines, Stanion believes that France will increasingly find itself in the spotlight in 2012. He believes that France has entered a state of ‘sub-sovereign debt denial’ and with no central bank, France’s government does not have the mechanism to buy French sovereign bonds, in effect becoming little more than a local authority at the mercy of the European Central Bank.Stanion said: “Greece, which has already been in a recession for the past four years, will continue to suffer for the foreseeable future and may ultimately leave the eurozone, with the possibility of Italy and other southern members following.“We believe that the Greek and Italian technocratic governments will also likely be replaced in the short term as enforced austerity policies remain deeply unpopular and social unrest snowballs. However, we expect the core of the eurozone to stay together, at least for the next year, and there should be no dramatic implosion even if weaker parts are brushed off.”He believes that the prospects for the US economy are more positive.  “This is highlighted by generally better-than-expected recent economic data releases – and the outlook is for modest growth over 2012,” he said. “In this regard, it is important to recognise that the US enjoys several huge benefits over Europe, namely an integrated policy formation process via one national government, a pragmatic central bank, and a willingness to suffer short-term pain through wage cuts, or redeployment of labour, that will restore competitiveness. “Consumer spending remains resilient supported by employment growth. Corporate spending could increase with more capital expenditure spending in 2012. Overall, the current earnings growth rate in the US is better than anywhere else in the world.”Elsewhere, Percival believes that the emerging world looks vulnerable to a sharp slowdown in exports and a contraction in credit availability as the European banking sector shrinks its balance sheet.  He said: “While policymakers still have policy tools that could turn things around later in 2012, the short-term trajectory is now likely to be significantly lower. We are also concerned that investors seem to have pinned their hopes on the People’s Bank of China implementing the perfect policy mix to successfully engineer an economic ‘soft landing’ for Asia’s largest economy.“The Chinese Government has yet to pursue an aggressive stimulus package and although reserve requirement ratios have been reduced, Chinese GDP should bottom out in the first quarter of 2012, with growth rates widely expected to drop below 8%. In our view, it will be a few months before China becomes a good buying opportunity again.“In 2012, Russia could potentially prove to be an attractive option, although this depends on the results of the impending presidential election. Firm oil prices have allowed Russia to insulate itself from the rest of the eurozone and this should mean good opportunities for equities towards the second quarter, assuming the political situation remains stable.“Korea and Taiwan, which rely heavily on the direction of the global economy, could also present good opportunities later in 2012, once the eurozone debt situation becomes clearer.He concluded: “A further decline in valuations, or meaningful progress on the eurozone debt crisis, would lead us to become more positive on equities, but we are currently content to keep risk down at minimal levels given the uncertainties facing the global economy.Sometime next year will represent a great buying opportunity for risk assets - or earlier if Germany relents and allows the ECB to increase its programme of buying European government bonds.“As policy stimulus comes onto the agenda in China and other emerging economies, we may also be inclined to look more favourably on those markets. Fri, 06 Jan 2012 16:24:22 +0100 http://www.investmentinternational.com/index.php?option=com_content&task=view&id=4994&Itemid=27 With such uncertainly stalking the London and other major global markets, Offshoreonline.org has put together six simple tips for expatiates to help them weather 2012.Expatriates of all nationalities, wherever they are living, will probably have experienced some unpleasant ups and downs with their investments in 2011. Cast your mind back to December 2010 and analysts from UBS were forecasting the FTSE would finish 2011 at 6700, whilst Seven Investment Management went for the satan-like sounding 6666.Many other brokerages forecast the UK market would finish 2011 in a range from 6200 – 6700. Actually, it finished the year at 5572, considerably adrift of the views of many of the experts.Offshoreonline.org’s six simple tips for expatiates to weather 2012 are: 1.    Get a heath check on your pension and investment portfolio. Volatile stock markets have made many worried, so clients will want to know their portfolios are well balanced and prudently invested. If all markets are going down, it is likely many portfolios will suffer, but unless you are holding good quality funds, you risk missing out on any upturn when it eventually comes. Use a UK regulated broker such as Offshoreonline.org to provide analysis and advice to both those holding a portfolio and those considering new investments.2.    Diversify. Consider quality property. In the year to November 2011, Greater London property prices still managed to advance by 1.4% on average and with rental yields of 5% available in quality locations, that added up to a valuable combination for clever buy to let landlords.3.    Use a property search agency to help build your portfolio though, as averages hide the detail.  Whilst quality areas such as Wandsworth, Wimbledon, Westminster (up 7.1%) and others all advanced, many areas in the East of the capital which up to now may have benefited from the Olympic effect dropped back, some by over 2%, according to search experts Expatfindaproperty.com4.    Consider overseas property too – French real estate has weathered the storm well, particularly in areas such as the Cote D’Azur. Here good quality new homes can be purchased which make ideal rental projects with strong all year round corporate rental demand reflecting a busy conference and cultural calendar in centres such as Cannes, according to Newfrenchrivierahomes.com. 5.    Check your existing mortgage rates. Many expatriates will find fixed rate contracts coming to an end, but may not have wanted to move mortgage provider. There are still good deals to be had, particularly where the loan represents less than 70% of the value of the house. 6.    Check your insurance. Are life and health insurance policies up to date? Going in to 2012, the last thing you want is an expensive medical bill to pay. Get a quote – on average 50% of expatriates do not have any cover - but with apparently mundane complaints such as a trapped nerve in an arm potentially costing over £36,000 to treat, annual cover can look very attractive. Modern plans often offer discounts of up to 50% of premiums for those happy to take on an excess, so budgets can be managedAbove all though, the message is be proactive. Take an interest in your finances and make sure you are on top of the detail to avoid nasty shocks down the line. Plan for the worst, hope for the best. Fri, 06 Jan 2012 16:21:28 +0100 http://www.investmentinternational.com/index.php?option=com_content&task=view&id=4993&Itemid=27 Stenham Asset Management, the investment management firm, has launched a new Global Macro fund of hedge funds called Stenham Helix.Stenham has been invested in Global Macro hedge funds since the 1980s and its flagship macro fund of hedge funds, Stenham Trading, has achieved an annualised return of +9.07% since inception compared to the HFRX Macro Index which has posted a return of 6.51% and the MSCI World Equity Index which was 4.13% over the same period according to the company. The Stenham Helix fund aims to invest in similar types of macro managers but to assemble a portfolio where the liquidity provided by the underlying managers allows Stenham to offer monthly liquidity with 35 days’ notice.The fund will consist of a concentrated portfolio of around 15 managers with a target return of Libor +5% to 6% and low volatility. The minimum investment is US$ 25,000 with no lock up period. The Stenham Helix fund has launched with US$ 36 million and is available in USD, GBP and EUR share classes.Commenting, Javier Uribarren, investment director at Stenham Advisors, said: “We are very excited to be launching this new fund in response to both a continued interest in Global Macro strategies and the need for liquidity. We have never gated or restricted redemptions from any of our funds because our fundamental philosophy is to ensure that there is a comfortable match between the liquidity terms offered to investors and those available from the underlying hedge funds that form the investment portfolio.”He added: “In the latter half of 2011, countries in the eurozone came under growing pressure to show monetary and fiscal restraint, investable trends developed and the fundamental outlook became more accurately reflected in the pricing of financial assets. This environment is ideal for Global Macro strategies.”Global Macro funds have a unique set of characteristics that favour their ability in this environment:•    Ability to access all markets and asset classes globally•    Highly liquid portfolios in which exposures can be quickly changed •    Risk management and superior trade construction to limit the downside when shorter term moves are not consistent with long-term views•    Substantial organisations with outstanding talent pools and operational controls.Stenham has over US$ 1.1 billion invested in Global Macro hedge funds and has US$ 2.7 billion invested in hedge fund strategies overall. Fri, 06 Jan 2012 16:19:04 +0100 http://www.investmentinternational.com/index.php?option=com_content&task=view&id=4992&Itemid=27 Offering his investment outlook for the year ahead, Morris said: “The second half of 2011 was one of the most volatile periods witnessed in many years. Markets far too regularly saw substantial intraday corrections.“Much of this volatility was a consequence of the actions and inactions of politicians and central bankers. Looking into what seems a very murky and uncertain crystal ball for 2012; in the near term, one can reasonably and frustratingly expect more of the same. “Planned political changes during the year include elections in France, USA and Russia as well as the leadership handover in China. In addition, the march of democracy in the Middle East may well spread to other authoritarian regimes in the world. As citizens seek regime change, the long term effects of this would hopefully be positive; nevertheless it may well be a further source of short term uncertainty. “The dominance of the eurozone issues are likely to be maintained at least in the near-term, with the substantial amounts of debt that must be raised in the first quarter of the year by both European Sovereigns and the banking sector, the most notable of which is Italy.“Together, these two events will likely once again test the foundations of the eurozone and perhaps crucially, the resolve of European Central Bank President Mario Draghi.“Whilst his actions to date have emphasised the importance of not financing profligate member states and steadfastly following the prescribed role of the ECB, he may well find himself forced to make the choice between the single currency or a reassessment of his principals, particularly with regard to quantitative easing.“Recession over large parts of Europe now seems highly likely and consequently Mario will probably pursue further interest rate cuts, in addition the European outlook will probably see continued weakness in the currency. “Data from the US during the final quarter of 2011 was on the whole reassuring; it was particularly encouraging to see what appear to be early signs of a bottoming in the housing market. It will obviously be preferable for Obama to fight the presidential election with a robust economy. Indeed this would appear a probable scenario, despite the twin issues in the summer of the US debt downgrade and the deficit ceiling fiasco.“The fact that the economy has performed as it has, in the face of so many challenges with a notable lack of help from Washington given the deadlock between the two parties, shows its resilience. Surprisingly, at this point Obama would seem to have a reasonable chance of serving a second term as President, not necessarily by him winning the election but more likely as a consequence of the Republicans losing it through their failure to field a creditable candidate. “China remains a concern, and whilst signs that the economy is beginning the transition into a more consumer orientated one are encouraging, both a general slowdown and speculation in the housing market present a real problem for the authorities who must appease what are effectively conflicting issues, with one necessitating supportive Government policies and the other requiring tightening.“Japan remains something of an enigma, with net debt one of the highest in the OECD coupled with the worst demographic profile of any of the developed world, it now issues more debt than it collects in taxes. Yet in spite of this it is able to able to issue 10 year bonds at a yield of circa 1%, surely it can only be a matter of time before the bond market loses confidence in what looks an unsustainable situation.“2011 will be remembered for political change, particularly in the Middle East, and there is every reason to expect this to be continued in 2012. Recent protests in Russia following the sham elections in November as well as the continued unrest in Syria are likely to continue to impact on local markets and potentially on global sentiment.“One of the more overlooked protests of 2011 was in Israel which saw the largest proportion of any population during the 12 months take to the streets. The continued pursuit of harsh austerity measures particularly in the peripheral European nations, coupled with exceptionally high youth unemployment will require very careful handling by these nation’s leaders.“According to the Bank of England inflationary pressures in the UK are set to dramatically ease, as the effect of last year’s tax increases progressively drop out of the figures. As a consequence the squeeze on real incomes that UK consumers have had to deal with should diminish and should make for a more optimistic outlook. Consequently, it is unlikely that the UK will see interest rate rises during 2012.“A continued pursuit of broad ranging austerity measures will also necessitate the offsetting stimulus of continued loose monetary policy. Gilt yields at record lows present something of a quandary for investors, the fact that the Bank of England has been such an aggressive buyer, holding up to 30% of the total Gilt market clearly distorts any analysis of yields at present. It does, however, make refinancing the nation’s debt a more attractive proposition in terms of the on-going cost!“There remains substantial forced regulatory investment demand from the banking and finance sectors, this coupled with the maintenance of the UK’s “safe haven” position should result in only a slim probability for a dramatic move upwards in gilt yields.“Equity investors should take particular heart from the health of the corporate sector. This largely continues to enjoy record margins, substantial cash balances and increasing dividends. That said we should be alert to the fact that margin pressures will surface at some stage, therefore to continue to grow profits, sales growth will have to dominate.“In summary it would appear we are set for another challenging year and in such an environment, diversity and patience would appear worthy bedfellows for investors. Yet we feel that there could be a markets rally in the summer, led by a certain sporting event being held on these here shores...” Fri, 06 Jan 2012 16:12:40 +0100 http://www.investmentinternational.com/index.php?option=com_content&task=view&id=4991&Itemid=27 By Yuan Phoon The eurozone economy will shrink by 0.6% in 2012 “if the euro problem is solved” or by 2% if it is not, said the Centre for Economics and Business Research.In its latest World Economic League Table, the CEBR also said Brazil had overtaken the UK as the world’s sixth largest economy. However the research group predicted that the UK would overtake the French economy by 2016. Douglas McWilliams, chief executive of the CEBR, said: “Brazil has beaten the European countries at soccer for a very long time. But beating them at economics is a new phenomenon. “Our World Economic League Table shows how the world’s economic map is changing, with Asian countries and commodity producing economies climbing up the league while we in Europe fall back.” Brazil’s economy grew by 7.5% last year but the government has cut its growth forecast for 2011 to 3.5% after the economy ground to a halt in the third quarter. Fri, 06 Jan 2012 16:08:30 +0100 http://www.investmentinternational.com/index.php?option=com_content&task=view&id=4986&Itemid=27 Paul Feeney has been appointed chief executive of Skandia Investment Group. Paul - who starts his new role in January - will also be chief executive of all of Old Mutual's asset management businesses within Long Term Savings. The coordination of the asset management businesses across LTS is a key component of Old Mutual's strategy of delivering the best products, solutions and services to its customers. Paul's new appointment to SIG follows Phil Wagstaff's decision to take the role of global head of distribution at Henderson Global Investors following his appointment to the role of SIG CEO just two weeks ago.  Paul Hanratty, chief executive of Old Mutual's LTS business, said, "SIG is in good shape. Over the past three years it has delivered a fund range with industry leading performance - enough to put it among the leading asset managers in Europe. It is also more than holding its own in terms of sales against a very challenging economic backdrop.   "We have very ambitious plans for the business and its future development within LTS asset management; so while we're sorry to see Phil go, with Paul at the helm and a motivated and focused executive team at SIG, I'm very optimistic for the future.” Thu, 29 Dec 2011 16:25:34 +0100