Tag Archives: UK

How does U.K. Charities Turn to Bond Market?

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According to The Wall Street Journal, Greenwich Leisure Ltd. is offering some of its half a million or so members a quirky way to get a month’s free gym membership every year for the next five years: buy its bonds.

The London-based sports center-to-libraries operator is among a small but growing band of U.K. social enterprises and charities tapping the bond market to raise cash from investors who are seeking more ethical ways to generate returns.

It comes at a time when the U.K. government is cutting funding to local authorities, placing more of a burden on charities and other community organizations to step in and provide services that were previously offered by local councils. For social enterprises such as Greenwich Leisure, bonds are an attractive way to raise large sums of cash quickly when other financing options, such as bank loans, are limited.

“The market is slowly but definitely growing,” said Bryn Jones, a fund manager at Rathbone Brothers PLC, whose ethical bond fund manages about £132 million ($213.4 million).

Mr. Jones said his fund has been buying social housing bonds since 2002, but more recently, there has been a rise in deals from smaller charities too. Disability charity Scope came first in 2012, and this year has seen deals from Mencap, a charity for people with learning disabilities, and Midlands Together, which provides training and mentoring for ex-offenders. Two more deals, including Greenwich Leisure’s, are currently in the market. Mr. Jones says his fund is looking to buy some of the latter’s bonds.

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UPDATE 1-UK bans short-selling in three Portuguese stock

UK bans short-selling in three Portuguese stocks

(Reuters) – Britain’s financial market watchdog said on Thursday it had imposed a temporary ban on the short-selling of three Portuguese companies to help Portugal‘s market regulator cope with volatility in these shares.

The ban follows similar action in Portugal, where market regulators have tried to calm volatility after the resignation of two government ministers brought the Portuguese government to the brink of collapse.

In London, the restriction applies to banks Banco Comercial Portugues, Banco Espirito Santo, and Sonae Industria SGPS, the Financial Conduct Authority said, and will be in force through to midnight Thursday.

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Hedge Funds See Further Profit From Glencore-Xstrata

Hedge funds are betting that commodities trader Glencore will succeed in its battle for miner Xstrata, in a long-running deal that has been profitable for arbitrageurs and is still attracting funds looking to make money.

Arbs, hungry for action after a lean period for M&A, have been buzzing around the deal for months, attracted by its size, liquidity and complexity, and many profited from last week’s move by Glencore(GLEN.L) to sweeten its now 23 billion pound all-share bid.

Reported by Laurence Fletcher and Sophie Sassard, Reuters, Xstrata (XTA.L) was expected to recommend the offer as early as next week, although Qatar Holding – its second-biggest investor after Glencore – has yet to make its decision public.

However, after a breakthrough in talks last week, brokered by former British prime minister Tony Blair, many funds believe it is only a matter of time before the deal gets the Qataris’ stamp of approval.

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Hedge Fund Charges Not Catching on with UK Mutual Funds

Britain’s mutual funds are shunning a hedge fund-style method of charging clients, where investors pay fees as a proportion of outperformance by the fund manager, following a revolt by financial advisers selling the funds, a study has found.

Reported by Chris Vellcott, research by Lipper published on Monday shows that after initial enthusiasm for performance fees in 2007, the number of funds using the structure stands at 80, compared with 112 having charged the fees at one time.

In a 2007 study, Lipper found 34 funds had adopted performance fees, rising to 81 funds three years later.

The fact the number has not risen since 2010 “reflects not only a slowing of funds being launched with performance fees but also the closure of funds and the removal of performance fees,” Lipper said.

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World Factory Output Curbed by Troubled Europe

As reported by Jonathan Cable and Anooja Debnath from Reuters, crumbling global demand restrained factory output in Asia and most of Europe in January, business surveys showed on Wednesday, putting pressure on policymakers to shore up growth and counter a spreading malaise.

Asia‘s export-reliant countries, while far more resilient, remain vulnerable to the euro zone’s messy sovereign debt crisis that threatens at best to tip the currency bloc into a recession and at worst to rip it apart.

Meanwhile, the first rise in German manufacturing output in four months was not enough to offset prolonged contraction in the currency union’s smaller economies and suggests that the bloc will not avoid that recession.

“There is an awful long way to go yet, and given the headwinds that these economies face I would be cautious about being too optimistic,” said Peter Dixon at Commerzbank.

“Germany continues to motor on and show a reasonable amount of dynamism, and that will drag France along and maybe Italy, but it is not really going to help the likes of Greece. You need much more buoyancy from domestic demand, which at the moment appears to be sadly lacking.”

The Eurozone Manufacturing Purchasing Managers’ Index (PMI), compiled by Markit, rose to 48.8 last month from 46.9, revised up from a flash reading but recording its sixth month below the 50 mark that divides growth from contraction.

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UK Stands Top in European Economy, Growing Twice as Fast as France or Germany

 As  Ian Campbell from Reuters said, UK GDP stalled in the fourth quarter, contracting by 0.2 percent. That’s bad. But which major west European economy will perform best in 2012? It’s the UK again, the IMF predicted this week.

Britain’s main problem is that it’s doing best in a troubled continent. If it achieves the meagre 0.6 percent growth the IMF predicts in 2012 it will have grown twice as fast as France or Germany and have evaded the 0.5 recession the IMF forecasts for the euro zone as a whole. The euro zone’s fiscal pain is the main obstacle to a firmer British recovery.

UK cuts, it’s true, aren’t helping growth in the short term. Since April austerity has kicked in hard, booting 193,000 unfortunate public sector employees out of work. Unemployment has risen to 2.7 million and will go higher.

But it is Europe, more than government cuts, which has dragged the UK back into negative territory. Half of British exports go to the euro zone. In December the CBI’s export order balance dropped to a 23-month low. Export weakness helps explain why industrial production plunged by 1.2 percent in the fourth quarter. Service industries, more domestically oriented, held up better.

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Currency Majors Technical Perspective for Monday May 30, Holiday in Both the UK and the US

Advanced Market Timing Experts Workshop 2011 Master Market Timing with the Leading Technical Analyst

EUR/USD Current price: 1.4279

Quiet Monday due to holidays’ both, in the UK and the US, are keeping the major crosses limited to tight trading ranges, with the EUR/USD trading above 1.4250 yet limited by 1.4300 since early Asian opening. Flat according to hourly indicators, and hovering around 20 SMA that losses  past Friday’s bullish tone, pair is set to extend consolidative range over the next hours, at least until Sydney Tuesday opening. 4 hours chart, shows the pair remains limited below 200 EMA, while indicators head slightly south, helping to keep the upside limited for now. Despite holiday’s concerns the euro zone will struggle to resolve its debt crisis keep hitting the wires, suggesting the cross may come under pressure once markets are back in full trading mode.

Follow the markets with Valeria Bednarik, author of the Currency Majors Technical Perspective report, in Forexstreet.net.