January 19, 2017: Capped off by a strong December, 2016 was the best year for US home sales since the recession, according to the January 2017 RE/MAX National Housing Report. Home sales in 2016 were the highest in the housing report’s eight-year history, topping the sales of 2015, the previously strongest year. Nine months of 2016 posted sales greater than in the corresponding period of 2015.

According to the 53-market report, the trend of rising prices and shrinking inventory continued in December, even though December was one of the three months that trailed 2015, with sales 1.8% below December 2015. Even so, nearly half of the markets reported increased sales over December 2015, and almost two-thirds saw sales higher than November 2016. The median increase over November 2016 was 1.7%.

The median sales price of $216,000 was 4.9% above one year ago and only 1.8% below November’s.

Inventory declined 17.9% year-over-year in December, continuing a year-long streak of double-digit declines.

“Much like 2015, we saw a mostly healthy housing market in 2016 that posted steady growth in sales and prices,” said Dave Liniger, RE/MAX CEO, Chairman of the Board and co-founder. “We’re back to pre-recession levels in many markets, with 2017 forecast to be another solid year. We’ll have to wait and see what impact rising interest rates will have.”

Of the 53 metro areas surveyed in December, the overall average number of home sales fell 1.8% compared to December 2015. But nearly half of the 53 metro areas experienced an increase in sales year-over-year, with three experiencing double-digit increases. The markets with the largest increase in sales included Wilmington/Dover, DE +21.4%, Honolulu, HI +19.7%, Augusta, ME +16.1%, Las Vegas, NV +7.9% and Providence, RI +7.3%.

In December, the median of all 53 metro Median Sales Prices was $216,000, down 1.8% from November but up 4.9% from December 2015. Of the 53 metro areas surveyed, all but two (Des Moines, IA and New Orleans, LA) saw year-over-year increases or remained unchanged with nine rising by double-digit percentages. The largest double-digit increases were seen in Birmingham, AL +17.1%, Tampa, FL +16.8%, Charlotte, NC +13.2%, Seattle, WA 12.9% and Orlando, FL +12.3%.

The average Days on Market for homes sold in December was 62, up three days from the average in November 2016, but down five days from the December 2015 average. The two metro areas with the lowest Days on Market were Omaha, NE and Denver, CO both at 36. The highest Days on Market averages continued to be in Augusta, ME at 141, and Burlington, VT at 101. Days on Market is the number of days between when a home is first listed in an MLS and a sales contract is signed.

The number of homes for sale in December was down 14.0% from November, and down 17.9% from December 2015. Based on the rate of home sales in December, the Months Supply of Inventory was 4.2, compared to November at 4.0 and December 2015 at 4.9. A 6.0-month supply indicates a market balanced equally between buyers and sellers.

In December, 47 of the 53 metro areas surveyed reported a months supply of less than 6.0, which is typically considered a seller’s market. One reported a balanced market at 6.0, while the remaining five saw a months supply above 6.0, which is typically considered a buyer’s market. The markets with the lowest Months Supply of Inventory continued to be in the West, with San Francisco, CA at 1.2, Seattle, WA at 1.5 and Denver, CO at 1.6.

The post US home sales finish strong in 2016 appeared first on International Finance.

Mustapha Mensah & Gloria Ofosu-Kusi

February 19, 2016: In the current situation of financial and investment uncertainties in Ghana, devoid of sophisticated and innovative investment solutions, certain individuals saw in this void an opportunity to create an Investment management haven. The company’s comprehensive financial analysis and tactical  investment decisions would be the Midas’ touch of investments throughout the country and elsewhere. The result of their innovation and diligence was McOttley Capital Limited, the investment citadel of McOttley Group of Companies in Ghana.

Financial markets the world over are becoming more complex and specialised. While opportunities for investment continue to emerge, the risks to investors continue to increase. Therefore, successes in the financial markets require expert management and professional skills with thorough primary market research and innovative investment products.

McOttley Capital Limited is a limited liability company licensed and regulated by the Securities and Exchange Commission and the National Pensions Regulatory Authority (NPRA). The company was established in 2013 and has for the past two years churned out productive investment solutions for its valued retail and institutional clients. The company’s umbrella is McOttley Holdings Limited, and McOttley Capital is one of the triad of the company’s subsidiaries. The others are McOttley Money Lending Limited and McOttley Properties Limited.

What McOttley offers

McOttley Capital’s investment products have been the solution to many individual and corporate financial predicaments for the past two-and-a-half years. It has been well-noted for its expertise in Fund Management, Corporate Financing and Research and Due Diligence.

Fund Management products

McOttley Capital’s Fund Management product is one that offers clients the prerogative of having every penny of their investment prudently managed, no matter the size of the investment. Their Fund Management product uses thoroughly analysed research conducted by their able Research Unit and scours the investment environment for suitable investment opportunities that uniquely fit the intent of each client.

They do this with the purpose of fulfilling each investment objective outlined by their clients, be they institutional or retail clients, and whether for short-term or long-term investments. The Fund Management schemes include Fixed Premium Investment, a fixed deposit scheme that offers clients the surety of a secure fixed deposit investment at highly rewarding yet realistic rates; McFund and McFund Plus Investments, both collective investment schemes providing their clients secure rates that mimic the surety of the country’s treasury bill rates yet delivering much higher satisfaction in rates; and McOttley Unit Trust (McTrust), another collective investment scheme providing clients with the best of both asset classes, investing in both equities and fixed income securities and thus assuring the investor of both safety and higher returns.

Besides these schemes, McOttley Fund Management also provides Pension Fund management for its clients, utilising a strategic approach to help clients manage all aspects of their retirement plan. McOttley Capital’s Pension Fund Management offers the fund a chance to grow at a pace above inflation and make a healthy real return.

McOttley’s Fund Management Investment schemes are designed to revolve around their clients aiming for their utmost satisfaction whatever their investment objectives may be. Fuelled by discerning analysis and thorough research, their highly skilled portfolio managers and analysts effect informed decisions and strategies that significantly impact clients’ investments ensuring their utmost satisfaction.

Corporate finance

In addition to these products, McOttley Capital also offers the option of corporate finance to its clients. McOttley Capital Corporate Finance aims to provide its clients with quality in the services it offers, whether they are corporate clients or individual clients with corporate concerns. This product has the target of solving any corporate finance difficulties with the client at heart.

With the support of thorough research, due diligence and analysis, their Corporate Finance team is able to use this highly validated research and information to guide corporations in their Mergers and Acquisitions. They use their skills of learned persuasion and credibility to support corporations garner funds for the  development of their institutions, for strategic development planning as well as assisting firms with the financial assessment of their companies and corporate restructuring and turnaround.

Through their corporate finance initiatives, they serve as intermediaries to raise funds for both small and medium scale companies in Ghana and elsewhere for clients who require professional expertise in company restructuring and planning. They advise clients on their short, medium to long investment decisions.

Research and due diligence

At McOttley Capital, they consider the research and due diligence the company produces to be the lifeblood of what the company is today and is yet to become. Their Research and Due Diligence navigates the intricacies of the Ghanaian, African and other international financial markets. They conduct meticulous analysis of micro and macroeconomic indicators, at the same time tracing and making subtle yet crucial financial connections and forecasts that impact the financial industry. Thus enabling them to add new meaning to an adage they strongly believe; that knowledge is power.

The goal of McOttley research is to analyse factors affecting the capital and money market, micro-finance industry, micro and macroeconomics and publish value added and timely analysis using up-to-date statistical techniques. Their use of modern analytical statistical tools, and in-depth assessment of investment horizons, financial occurrences and atmospheres from a top-down and bottom-up approach and how these in turn affect the unique investment decisions, made on behalf of their clients is a major contributor to making McOttley Capital a luminous rising star in the investment arena.

McOttley Capital’s Research and Due Diligence has not only greatly added value to staff of McOttley and their clients but also to the general public as the credible research conducted is often published in the media.

McOttley Capital has become the fast-growing company it is today because of the dedication of the industrious team of investment professionals, who work tirelessly employing the core values of  integrity, timeliness, professionalism, fostering relationships, going the extra mile and showing respect to all clients in all their investment transactions.

The post Portfolio management with a global perspective appeared first on International Finance.

February 24, 2015: Gulf Bank has announced that it is taking part in the National Fund’s SME Debt Program, which has been developed by the Kuwait National Fund for SMEs Development (National Fund), established under law 98/2013, to encourage an ecosystem for entrepreneurship by providing different forms of support to small-and medium-size enterprises (SMEs).

The National Fund identified that one of the ways of helping it achieve its objectives is by partnering with Gulf Bank and other local banks to leverage the existing financial infrastructure and expertise to assist in providing growth capital in the form of debt.

Dr. Mohammad M. Al-Zuhair, Executive Chairman of the Board at the National Fund for SMEs Development, said: “While the Fund envisages supporting the small- and medium-size enterprises in the areas of finance, education/training, legal, infrastructure and other strategic /technical guidance, it has also identified that one of the means to achieve its goals is by partnering with local banks to leverage on the existing infrastructure and expertise.”

“The Fund, in collaboration with banks, will support SMEs by offering competitive loans to meet their full financing requirements. The banks will assess each business case on the basis of a list of eligibility criteria set out by the law, and agreed on with the National Fund. Once a bank is satisfied with the credit requirements, the file will be sent to the National Fund for review and final approval. The bank then disburses the loan based on the approved product program, and will act as an agent for the National Fund’s portion of the credit extended to the borrowers. This program, and other future ones, is designed in line with the country’s direction to encourage the private sector in participating further in the economic development of Kuwait.”

Gulf Bank’s Chairman Mr. Omar Kutayba Alghanim said: “We are proud to be the first to take part in this important national initiative, to give direct and tangible support for Kuwait’s entrepreneurs and SME owners. SMEs and entrepreneurs are key drivers to diversifying Kuwait’s economy and ensuring a prosperous and stable future. This is also a great opportunity to showcase our tailored SME services, as well as share ideas and help encourage young businesses to grow. We look forward to rolling this program out, with a fully trained and dedicated staff ready to receive loan applications from entrepreneurs and SMEs for swift processing using the National Fund’s procedures.”

Gulf Bank’s participation reflects its strategy to assist Kuwaiti nationals and promote Kuwait’s business community. It also reaffirms the bank’s dedication to encouraging new ideas and developing a new generation of entrepreneurs.

The post Gulf Bank to help develop an entrepreneurship ecosystem in Kuwait appeared first on International Finance.

But,what next for the Swiss franc and the country’s economy

January 22, 2015: On January 15, the Swiss National Bank (SNB) shocked the capital markets by unexpectedly removing the EUR/CHF peg set at 1.20. The move caught many offguard and sent the Swiss Franc (CHF) into the stratosphere, rising about 40% in a mere 30 minutes.

The International Monetary Fund’s head, Christine Lagarde, called the move “a bit of a surprise”. Watchmaker Swatch saw its share price slump 15%. Mark Haefele, chief investment officer of Swiss bank UBS, estimated that the move would cost Swiss exporters close to 5bn Swiss francs, equivalent to 0.7% of Swiss economic output.

The carnage was not limited to businesses in Switzerland. Residents in Eastern Europe also felt the sting, as their home mortgages, denominated in CHF, became instantly more expensive. Several currency brokers were not spared either. FXCM, one of the world’s largest forex brokers, announced a negative equity of $225 million and had to be injected with $300million of fresh capital from Leucadia National. IG Markets reported a loss of £30millionwhile Interactive Brokers reported a loss of $120 million.

To understand the reason behind the SNB move, it is prudent to look back a little on history. In September 2011, the SNB announced a peg on the EUR/CHF, setting a floor rate of 1.2. This means that it would not allow the CHF to strengthen against the euro beyond that rate. To defend that level and keep the CHF relatively weak, the SNB had to keep buying euros. This action swelled the SNB’s balance sheet to the tune of 500 billion CHF, which accounted for 80% of its GDP. This is the highest level among the major central banks in US, UK, Europe and Japan.

Here’s some quick thoughts. Firstly, it costs money to intervene in the currency markets or in this case, to “defend a peg”. Secondly, the problem starts to compound because the value of the euro is steadily declining.

Now, keeping the EUR/CHF peg would swell the SNB’s balance sheet even more and make it “top heavy with euro-denominated assets”. At current levels, as much as 40% of their FX reserves are held in euros. This would make Switzerland more sensitive to swings in FX reserves.

With the impending announcement from the ECB on January 22, which is expected to bring about Quantitative Easing (and thereby weakening the euro more), the SNB made a calculated decision to remove the peg now and cap its losses. If the peg is still in force when the ECB announces QE, the SNB would be forced to buy more euro assets to limit the rise in the CHF and potentially incur more losses.

Had it kept the peg, SNB assets could easily surpass 100% of GDP after the expected QE announcement from the ECB and losses due to the subsequent euro weakening could fatally impact Switzerland’s treasury.

Short EUR/USD at 1.1620

On the H1 chart, prices on EUR/USD are moving in a downtrend. With US consumer confidence at an 11-year high of 98.2 and with the impending QE announcement from the ECB this week, the divergence in monetary policy between US and Europe is very much intact. This gives rise to an excellent short opportunity on the EUR/USD.

An aggressive entry is taken at 1.1620, about 30 pips below the resistance level of 1.1647. I expect prices to head up from current levels just prior to the QE announcement before resuming its downtrend. A stop loss of 50 pips is placed above the resistance and we will have two targets on this trade, exiting the first position at 1.1570 and the second one at 1.1520.

Entry Price = 1.1620

Stop Loss = 1.1670

1st Profit = 1.1570

2nd Profit = 1.1520

The post CHF freed, SNB caps losses appeared first on International Finance.

Kamilia Lahrichi

Oct 27,2014: The two contenders who won Uruguay’s first round of the presidential election on October 26 will not bring about any radical economic change for this small country wedged between two regional heavyweights – Argentina and Brazil.

This nation of 3.4 million people earned the sobriquet “Switzerland of South America” because of its democratic tradition and strong economic growth, a model for its unstable neighbours.

Leandro Zipitría, an Economic Consultant and Professor at the University of Montevideo in Uruguay, explained that Tabare Vazquez, the leftish Broad Front contestant and Lacalle Pou, from the conservative National Party, do not have economic programs notably different than President Jose “Pepe” Mujica’s.

Their political platforms diverge in respect to social policies, namely education and crime reduction.

Mr. Vazquez led the country from 2005 to 2010. He expanded the welfare system to reform the education system and improve working conditions.

Mr. Pou is the son of former president Luis Lacalle. Under the banner “New Hope”, he has reached out mainly to the Uruguayan youth with a focus on education, culture and agriculture.

Following the footsteps of “the most humble” leader

Despite his popularity, President Mujica cannot run for a second mandate because Uruguay’s constitution bars consecutive presidential terms.

He will be remembered as “the poorest” and “the most humble” president due to his austere lifestyle. “Pepe” shunned the lavish presidential mansion and lives in a modest farmhouse on the outskirts of the capital Montevideo with his wife and his three-legged dog.

He gained international renown as he gives away 90% of his salary to charity. He also drives a 25-year-old Volkswagen Beetle.

This 79-year old ex-guerilla was tortured and isolated during 14 years in jail. He was freed in 1985 when Uruguay returned to democracy after more than a decade of dictatorship.

Notwithstanding that the economy has grown significantly during his mandate, the truculent head of state has lambasted rampant consumerism in international summits.

At the United Nations General Assembly in New York in 2013, he said: “it seems that we have been born only to consume, and to consume”.

At the Rio+20 conference in 2012, he asked: “what would happen to this planet if Indians would have the same proportion of cars per household as Germans? How much oxygen would we have left?”

Standing out in Latin America

Despite slowing growth in neighboring countries, affluent Uruguay grew on average by 6.2% from 2004 to 2011, compared to a global average of 2.9% and a Latin American average of 4.5%.

“Uruguay has become a small diamond in a rocky landscape,” noted Claudio Loser, visiting senior fellow at the Inter-American Dialogue, a centre for policy analysis in Washington D.C.

The World Bank sets out that Uruguay’s gross domestic product (GDP) grew by 4.4% in 2013. In comparison, the economy of Brazil – Latin America’s largest with 200.4 million people – grew by only 2.5% in 2013.

The South American giant’s GDP reached US$2.246 trillion in 2013 – 40 times Uruguay’s.

While the Argentine and Brazilian economies are highly protectionist, Uruguay is a   “mostly free” marketplace, according to the 2014 Index of Economic Freedom. It assesses the level of economic freedom based on the rule of law, regulatory efficiency, state intervention and open markets.

The Index indicates that Argentina is “repressed” since 2000 – the lowest level of economic freedom. Brazil became “moderately free” for the first time in 2014.

Hence, “Uruguay appears to be the logistical and financial centre of Mercosur,” said Nestor Pablo Aleksink, Executive Director of the Program Argentina Export, an organisation promoting exports, during a press conference in Buenos Aires on October 21.

The Common Market of the South (Mercado Comun del Sur in Spanish) is a free trade bloc and customs union including Brazil, Argentina, Uruguay, Paraguay and Venezuela. It has a combined GDP of about US$3 trillion.

Uruguayan government officials argue that the country could become a regional door to Asia as China is its biggest export market.

A March 2012 report titled “Uruguay: Economy and Institutions, the Key to Success” released by the Ministry of Economy and Finance points out that the country has the only deep harbours of South America. They operate under a free port regime.

Thanks to its 45 kilometres of paved roads per 1,000 square kilometre, Uruguay has also the most dense highway network in the region.

Sound macroeconomic and investment policies  

Although Uruguay’s economy expanded by only 3.9% in 2012, Mr. Zipitría pointed out to three factors that boosted economic growth in the past decade.

“First, Uruguay has seen an important increase in the price of commodities it exports,” he noted. Exports of soybeans, meat, rice, sulfate chemical wood pulp and wheat more than tripled in the last decade.

In addition, investment increased fivefold in the last 10 years mainly due to massive foreign investment in paper pulp.

“Thirdly, the government has had a pragmatic approach to economics, propelling some important reforms like a new bankruptcy law, a new tax law [and] a non-discretionary tax reduction decree to foster investment,” he concluded.

Uruguay offers a positive investment environment as the tax system is neutral with respect to foreign investors. Also, there are no limits for foreign capital in companies. A 2007 decree incentivises local and foreign investors with income tax cuts for businesses.

Uruguay, hence, regained investment grade status by Fitch Ratings, Standard and Poor’s and Moody’s Investors Service.

A May 2014 Moody’s Investors Service’s Global Credit Research notes “moderate credit risks, and the country’s reduced vulnerabilities to regional and commodity shocks”. The rating agency forecasts a “steady increase in the investment ratio and productivity gains.”

Yet, a high inflation rate remains a challenge for policy-makers. It stands at 9.1% – well above the central bank’s target of 5% plus to minus 2%.

Slamming the door of Mercosur?

The saying goes: when Brazil or Argentina sneezes, Uruguay catches a cold.

In 2001-2002, Uruguay followed Argentina into crisis because it was commercially tied to the fortune of its ailing neighbour. Uruguay was hit hard: poverty reached 40% and the unemployment rate 20%.

This was caused, in part, by the boom-bust cycle of Argentina’s massive 2001 default, which significantly affected trade flows with its neighbour. The county ran out of cash and faced difficulties in production capacity.

Unlike Argentine, Uruguay handled its recovery efficiently. It achieved macroeconomic stability while tackling its population’s social needs. In fact, it was able to access international credit markets quickly and secured US$1.5 billion from the United States Treasury in 2002.

Uruguay, which today depends less on trade with Argentina, has a robust economy with a well-regulated banking system. It thereby lives up to its reputation as “el país corajudo” (the plucky country in Spanish). Exports to Argentina have fallen from 25% to 4% in a decade.

Uruguay does not rely exclusively on Brazil either so that if the South American giant reduces its demand, Uruguay can strategically reorient its market, explained Minister of Commerce Mario Bergara in September 2014. Uruguay now exports commodities to 140 countries, such as the Netherlands, China and Russia.

In addition to keeping itself safe from unstable neighbors, Uruguay has diversified its goods exports with new segments, namely paper pulp and soybeans.

Thus, “Mercosur has lost its path,” said Mr. Zipitría.

Notwithstanding that the regional free trade zone has sought to boost commerce, discord among member states has stymied economic progress.

“The politics that Argentina is applying today does not favour the process of [regional] integration,” said Mr. Aleksink, in reference to heavy-handed policies to protect the local economy.

Besides, the union of leftist governments in Mercosur appears more ideological than practical.

“Although Uruguay has managed to attract foreign investment, there are some tensions within [the Broad Front] in the government that tends to evaluate international interests in ideological terms, and less in pragmatic terms,” explained Mr. Zipitría.

The political coalition deems trading with foreign countries a “heresy towards Mercosur.”

“If the political direction changes in any of these countries [Argentina, Brazil and Venezuela], maybe the winds could change in Uruguay too,” he added before the presidential election in Brazil on October 26.

Left-leaning president Dilma Rousseff came first before centrist economist Aécio Neves in the race in Brazil

A unique model

Thanks to advanced education and social security systems as well as the legalisation of abortion and gay marriage, Uruguay has pioneered a unique social model in the region.

It was coined “The Netherlands of Latin America” too because of its progressive social laws: Uruguay is the first country on the planet to legalise the production, selling and consumption of marijuana, as part of a groundbreaking experiment.

President Mujica declared that drugs are an “economic power”: drug trafficking exists because there is demand.

Besides, along with its Argentine neighbour, Uruguay has achieved gender development parity. In contrast to most Latin American countries, the nation has one of the lowest perceived levels of corruption in the world.

More stories:

Brazil’s President Rousseff stays in power

Bolivia’s Evo Morales wins a third consecutive term

The post Uruguay’s presidential election goes to run-off appeared first on International Finance.