Mitch Hopkinson

Mortgage enquiries from overseas buyers and British expats are up 45 per cent in Quarter 4, compared to the previous quarter, revealed the mortgages division of deVere United Kingdom and the deVere Group.

The observation from deVere Mortgages, which offers advice to British expats and foreign nationals looking to buy property in the UK, comes against a shifting political and economic landscape.

deVere Mortgages has received an unprecedented level of enquiries this last quarter.  There has been a remarkable uptick in home loan enquiries in Quarter 4 – and we’ve not yet even finished it.

To analyse these findings, first it should be acknowledged that they are more astonishing given that the government’s change in tax policy regarding Buy to Let in recent years was expected to severely dampened overseas investor interest.

Also Brexit appears not to have dented the UK’s traditional boast of being an attractive country for those residing overseas, largely due to the ongoing fundamental strengths of British residential property investments.

There are, we believe, two key drivers for the increase in Quarter 4.

With sterling down sharply since the Brexit vote, UK property has effectively put a ‘for sale’ sign up for the many overseas investors who want to establish a presence in the UK.  These might include investors simply wishing to diversify their property portfolio, or UK expats looking to buy a place to return to when they retire or to house a child while they are at university.

These investors are looking to buy now while a weak sterling works in their favour. As we appear to be increasingly moving to a ‘soft’ Brexit, sterling has already climbed in recent weeks. The more ‘soft’ Brexit the government becomes, the more sterling will rally.

Another reason to buy now is that UK sterling mortgages have probably one way to go now: up. Record low mortgage rates are being pulled as sterling funding costs go up for the banks and other lenders, reflecting the increased risk of inflation in the economy.

The vast majority of overseas buyers are foreign nationals and British expats in the Gulf Region and East Asia.

In order to meet the growing demand from both UK and overseas buyers, deVere Mortgages looks set to double its headcount of independent mortgage consultants by the end of 2017.

Mitch Hopkinson is Head of Advice & HNW, deVere United Kingdom

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In a survey of 100 UK CEOs, KPMG found that nearly 60 percent believe their ability to do business will be hindered once Brexit takes place if UK privacy rules are not aligned to the new General Data Protection Regulation (GDPR).

The GDPR has been at the forefront of minds of many CEOs since the European Commission officially ratified the privacy rules in April 2016. This new legislation is the biggest and most impactful change in privacy and data protection regulation in history. In May 2018, when it will be enforced, it will affect organisations in the UK and worldwide that have any dealings with consumers and businesses in EU member countries. If the rules are not met by business, they will face significant sanctions of up to €20M or 4% of global annual turnover – whichever is higher, from regulators.

Mark Thompson, Global Privacy Advisory lead at KPMG said: “The worry amongst this cohort of CEOs is understandable. Once GDPR is enforced in May 2018, it will fundamentally alter the way we live, work and interact with technology, organisations and each other. This revolution will transform the scale, scope and complexity of personal information processed, with personal information being a core component of everything we do.

“Whilst the UK is likely to implement the GDPR, Brexit poses some uncertainty on what GDPR will mean to the UK post-Brexit, it is critical to understand that if the UK is going to continue to trade with the EU this free flow of personal information must be maintained. As such we will need to have an ‘adequate privacy ecosystem’ in operation in the UK which is aligned to the requirements of the GDPR.

“Statements issued by the UK Government suggest that the UK will adopt the GDPR while it negotiates its exit from the EU. What remains to be seen is whether the GDPR is subsequently repealed and replaced with something else.

“The UK privacy regulator, the Information Commissioner’s Office, remains adamant regarding the need for strong, equivalent privacy law in the UK regardless of the outcome of Brexit. It therefore seems likely that a GDPR equivalent privacy framework will be here to stay and organisations should prepare accordingly.”

What should organisations do?

Commenting on what organisations should do, Thompson said: “The requirements being introduced by the GDPR are going to require most organisations to make significant enhancements to their privacy control environment and rethink the way they collect, store, use and disclose personal information. These changes are going to be complex and take time, as such, most organisations cannot afford to wait and see what form Brexit takes. Doing so would leave them with insufficient time to prepare.”

There are some immediate steps organisations should take to prepare themselves. These are:

1. Raise awareness at the board level – the board needs to understand the implications of the GDPR and be bought into the need to make enhancements. This should result in the funding being made available to undertake a privacy improvement programme.
2. Understand current state and set desired state – conduct a gap analysis against the GDPR to understand where your organisation is exposed to risk and determine what the risk appetite is.
3. Plan and implement – create a detailed plan to enable the desired risk appetite to be reached and undertake a privacy Improvement programme to deliver against this plan.

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Replacing Iran’s civil aviation fleet has been one of the biggest economic opportunities in recent times. Despite Iran’s need for new planes to replace those from the sanctions era, it has entered the market at a time when Boeing, Airbus and other small airplane makers are facing a downturn in orders, and are therefore expected to offer heavy discounts.

“Boeing has announced that its IranAir contract is worth $16.6 billion. However, considering the nature of our order and its choice possibilities, the purchase contract for 80 Boeing aircraft is worth about 50 percent of that amount,” said Deputy Transport Minister Asghar Fakhrieh.

The government of President Hassan Rouhani has pushed to finalise aircraft deals to show results from the end of sanctions. He faces criticism at home from hardliners over the cost of the purchases.

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Earlier in the week, Saudi Arabia’s Shura council discussed plans to impose a 2 to 6 percent tax on expat workers’ remittances, following a proposal submitted by former council member Husam Al Angari. He proposed an initial tax of 6 percent for the first five years of the expat’s residency, which would then drop to 2 percent.

The latest statistics from the World Bank show Saudi Arabia accounts for the second highest volume of remittances after the US, with $37 billion in 2015.

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IFM Correspondent

December 23, 2016: Barclays has opened up an opportunity for fintech startups in South Africa, it aims to accelerate the growth of startups in the financial service industry by allowing them to work with financial technology experts in the coming year.

The bank opened the Barclays Accelerator Programme powered by Techstars -“an initiative aimed at uncovering the next M-Pesa or Paypal”. Ten qualifying fintech startups will be given the opportunity to take part in the 13 week programme, beginning in May 2017.

The participants will be given the opportunity to expand their global footprint through Barclays, as well as with Barclay’s extension of its innovative arm in Africa, Rise- that has over 20,000 startups in its network around the word.

Yasaman Hadjibashi, leading the innovation agenda for the bank says: “Africa has tremendous untapped potential to not only pioneer its own creative solutions for its unique contexts, but to also create solutions that the rest of the world can adopt for their own contexts.”

This is the second time Barclays is opening this window for fintech startups after its first venture was successful. The bank previously collaborated with 7 of the 10 startups that participated in the programme.

Barclays says its accelerator programme “offers companies an advantage over others by providing a proven curriculum and lifelong access to the Techstars global network of mentors, investors and venture capitalists”.

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IFM Correspondent

December 23, 2016: Deutsche Bank AG said it reached a $7.2 billion agreement to resolve a year-long U.S. investigation into its dealings in mortgage-backed securities, removing a legal hurdle that fuelled investor angst.

Deutsche Bank will pay a $3.1 billion civil penalty and provide $4.1 billion in relief to consumers under a settlement in principle with U.S. authorities. While the deal is below the Justice Department’s initial request of $14 billion, Germany’s biggest lender still faces U.S. investigations into other matters and potentially expensive civil suits. John Cryan, CEO, Deutsche Bank, has made resolving litigation a priority.

“The financial consequences, if any, of the consumer relief are subject to the final terms of the settlement, and are not currently expected to have a material impact on 2016 financial results,” the bank said.

There were concerns that Deutsche Bank may not be having enough capital when the bank said in September that the U.S. Justice Department had made the opening request of $14 billion and that it had no intention of paying that amount.

Deutsche Bank also faces civil lawsuits related to claims that its traders manipulated key interbank interest rates. It isn’t clear how much more wrapping up these cases will cost.

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Benita James

December 21, 2016: Africa’s demography is showing a visible shift and many analysts have reason to believe that the continent has the largest youth population in the world. A young population is generally considered as beneficial and it is correlated with economic development. The World Bank estimates that this demographic dividend could generate 11-15% GDP growth between 2011 and 2030.

What does this demographic transition mean for Africa? Firstly, the large pool of young population creates domestic demand, which is hugely advantageous to domestic firms. Secondly, there will be a visible increase in the standard of living along with an increase in per capita income.

However, the growing young population in Africa comes with its own set of challenges. An area of concern is the lack of jobs available to young people. According to UN reports, the working age population is poised to more than double in least-developing countries, especially sub-Saharan Africa between 2015 and 2050. Consequently, many of them are forced to take up menial jobs and the continent faces high levels of underemployment.

Africa’s workforce is growing at a faster pace compared to the jobs that are available both in the private as well as public sector. Therefore, encouraging entrepreneurship is of vital importance.

Bethlehem Tilahun Alemu, founder and CEO of SoleRebels, says, “Africa must not only create jobs but challenge itself to create great jobs. Africa must create such kind of companies that young people aspire to work for.”

Investment in human capital is critical, as the young people of Africa present tremendous economic potential. A reform in the continent’s education sector would be beneficial as this would equip the youth with the skill set and technical know-how that many jobs require.

This transition has freed resources as there are fewer dependants now. The freed resources can be used to increase per capita spending on higher quality of health and education, ultimately leading to economic growth.

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IFM Correspondent

December 21, 2016: A senior financial analyst has claimed that if Deutsche bank is allowed to fail it may bring down the entire European banking system. Ewen Cameron Watt, a senior director at investment managers Blackrock Investment Institute, told CNBC: “If Deutsche Bank doesn’t make it, forget European banks as a whole.”

The analyst added that the bank has got through a lot of harder stuff but there are still many mountains ahead. “John Cryan, chief executive officer, Deutsche bank, is trying to lead a very long march back to a sustainable model,” he said.

Germany’s largest lender has been facing a tough time. It has a fine of $14billion from the US Department of Justice for misselling of residential mortgage-backed securities in the run-up to the 2008 financial crisis.

A settlement between the German bank and the US department regarding the fine is expected to reach this week.

Apart from fine, there are several regulatory issues that the bank is facing. Though German Chancellor Angela Merkel can step in and bail out the bank, reports suggest she is against the move ahead of elections. Merkel has been at the receiving end because of her open-door migrant policy.

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“India’s economy continued to recover strongly, benefiting from a large improvement in the terms of trade, effective policy actions, and stronger external buffers, which have helped boost sentiment,” the IMF said in its latest report on the World Economic Outlook.
On the other hand, IMF has projected that China’s GDP will grow at 6.2% in 2017. China, the world’s second largest economy saw a significant dip in GDP growth rate compared to the growth of 6.9% it recorded in 2015. However, many analysts argue that China is now transitioning into a balanced growth phase.

With a population of more than 1.2 billion people, India’s economy is expanding at a rapid pace. India is poised to be the fastest growing economy in the world, overtaking China. As of today, India presents a host of opportunities to global investors.

The post India Outlook 2017 appeared first on International Finance.

With inflation hitting 1.2% in December and average cash savings rates struggling to exceed 0.25%, the majority of British savers’ pots are effectively shrinking by nearly 1% per year. Unless savers act now to find alternative ways to grow their money, they will watch their hard-earned cash slowly disappear into an inflation black-hole.

Richard Theo, CEO, Wealthify said: “Britons are going to be billions of pounds poorer. £6bn is a staggering amount of money to vanish from savings accounts each year and should serve as a stark warning to the millions of savers resigned to ‘put up’ with low returns.

“It doesn’t have to be like this. Alternatives to cash savings exist that offer savers a better chance at growing their money. People spend hours hunting for bargains, especially at Christmas. Why are they not applying this attitude towards their savings and finding alternative ways to protect and improve their financial futures? With inflation set to hit 4% by 2017, the rate at which inflation eats away at people’s nest eggs is only going to increase.”

Wealthify calculated the annual net savings loss using official FCA figures on average cash savings returns (FCA Sunlight Report, Dec 2015), The FCA Cash Savings Market Report and official ONS inflation data. Annual inflation currently sits at 1.2%, while easy access cash savings offer an average 0.25% return, creating a net return of -0.95%

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