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Good Time to Invest in British Pounds and reasons why... Print E-mail

Eoin Treacy (Fullermoney): Outlook for British pound “The pound was one of the world’s worst performing currencies from late-2007 through to the end of the 2008. As a major European economy, outside the Eurozone, with a burst housing bubble and a heavy reliance of the City’s financial sector, the UK is more exposed to the effects of the credit crisis than many others.

“The UK took no action to support the currency as it declined, since it helped to make UK exporters more competitive. As short-sellers focused on sterling as a vehicle for taking advantage of the credit crisis, the pound’s fall outpaced that of its trading partners and on a trade weighted basis, it fell over 30% between mid-2007 and late 2008.

“The Deutsche Bank British Pound Trade Weighted Index ranged from 2001 to the middle of 2007. However, it broke emphatically below 95 in December 2007 and fell to 90 where it distributed for four months. It broke downwards again in August and began to accelerate lower from October. The Index found support in December and has posted a succession of higher lows since.

“This action is in contrast to the bearish sentiment towards the UK economy and the pound generally. The fundamental economic condition of the country is still deeply troubling but we should not forget that currency trading is a relative value endeavour. It could be argued that the pound became undervalued relative to its main trading partners too quickly and that rather than the pound being strong, other currencies are now getting weaker.

“If we accept the proposition that the pound is bottoming, then foreign investors looking at potentially making relatively long-term investments in Europe could justifiably start looking at the UK as a preferred destination.”

Source: Eoin Treacy, Fullermoney, May 18, 2009.

Singapore’s Economy Contracts at 14.6% Rate Print E-mail

Reuters - 21 May 2009

Singapore saw signs on Thursday that its worst-ever recession is bottoming out after its economy shrank less than expected in the first quarter.

Singapore’s economy shrank at an annualized and seasonally adjusted rate of 14.6 percent in the quarter, less than a Reuters median forecast for a 17 percent fall and also lower than preliminary government estimates of a 19.7 percent drop, final data showed.

Like other export-dependent nations in Asia, Singapore’s economy has been hit hard by the global downturn following the slump in the U.S. housing market and credit crunch.

The Singaporean economy has shrunk for four consecutive quarters, but the government said if it started recovering in the second half of the year, full-year G.D.P. could shrink 6 percent, at the low end of its forecast for a 6 to 9 percent contraction.

With-Profits Have Weather The Economic Crsis - Survey Print E-mail

Media-Newswire –  15 May 2009, London

UK with-profits life insurers have weathered the economic crisis — but their surplus assets fell by over £10 billion in 2008.

Life insurers suffered from the falls in share prices and long-term interest rates in 2008. Nevertheless, a survey by the Centre for Risk and Insurance Studies, at Nottingham University Business School, shows that each of the top 20 with-profits life insurers had assets at least equal to their liabilities.

However, their assets fell by £47 billion ( 12.8 per cent ) while their liabilities fell by only £36.7 billion ( 10.8 per cent ).

Chris O'Brien, director of the Centre for Risk and Insurance Studies, said: “These companies are important for people's savings, the assets of the funds totalling £319 billion at the end of 2008. They have been able to survive in the crisis with the help of improved risk management.”

Using the 'realistic balance sheets' that life insurers produce in accordance with the rules of the Financial Services Authority ( FSA ), the survey calculates the average surplus assets ratio fell from 7.8 per cent in 2007 to 5.3 per cent in 2008. However, three firms were able to increase their ratio, while in two firms the ratio more than halved.
Aviva Announces Restructured Reattribution Offer Print E-mail

TEP - 6 May, 2009

  • Flexible offer to reflect value of inherited estate
  • Minimum payment of £200
  • 90% of egilible policyholders to receive between £200 and  £1,150
  • Individual choice whether to accept cash - not a majority vote
  • Financial strength of funds not affected



Aviva plc ("Aviva") has agreed with the policyholder advocate Clare Spottiswoode that a restructured reattribution offer can be put to policyholders. 

Mark Hodges, chief executive of Aviva's UK Life business, said: "This is a good deal for our customers and shareholders.  We've worked hard with Clare and her team to come up with a flexible offer which accommodates the exceptional market conditions but still represents good value for the vast majority of our eligible customers.

"We believe that giving customers the opportunity to benefit from a reattribution is the right thing to do and each one of them will have the opportunity to choose whether to accept our offer.

Royal London New Business Up Print E-mail

London (Reuters) – 4 May 2009

Royal London said its new life and pensions business for the first quarter is up 27 percent on 2008 to 529 million pounds boosted by units acquired from Resolution last year.

Mike Yardley, group chief executive at the UK life and pensions company, said that with the economic environment remaining challenging, "we expect that new business will continue to be difficult for the foreseeable future".

Gross new business excluding cash mandates for Royal London Asset Management, the mutual insurer's fund arm, stood at 327 million pounds for the quarter, compared with 620 million pounds in 2008, down 47 percent.

The company said RLAM had been directly impacted by the economic environment, but there was "an encouraging pipeline of new business", with good demand for fixed income strategies, and "an increasing appetite" for the equity range.

Group funds under management stood at 32.5 billion pounds at the end of March, compared with 35.0 billion pounds at end-December 2008.

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