Thursday, November 21, 2013

UK Grows Whilst Eurozone Stagnates

According to a survey of 350 manufacturers carried out by the CBI, Britain's manufacturing sector is growing at its fastest rate for nearly two decades. The Telegraph reports that total order books relative to normal levels were at their strongest since March 1995.

The CBI survey's total order book balance rose to +11 this month to from -4 in October, well above expectations of 0 and the long-run average of -17. 

Meanwhile in the Eurozone things are somewhat different. Markit Economics said that its Eurozone Composite Purchasing Managers Index (PMI) for November (published today) fell to a three-month low of 51.5 points from 51.9 points in October.

France, the Eurozone's second largest economy, is dragging the zone down whilst the other smaller economies are all but stagnant.

Such is the effect of using one economic policy (via the single currency) for multiple economies that face different problems.

Tuesday, November 5, 2013

Britain Is Booming?

The Telegraph reports that the Markit/CIPS UK Services Purchasing Managers' Index rose to 62.5 in October from 60.3 in September. This was the highest level since May 1997.

As I noted the other week, it is the service sector that is driving the growth.

Now if the government could only bring itself to simplify the tax system, and indeed lower taxes, we might be assured that this growth can be maintained!

Thursday, October 31, 2013

Net Worth Update (October 2013)

Current Net Worth
Assets
Sep-13
Oct-13
Change
% change
Savings Account 1
$2,632.00
$2,002.00
($630.00)
-23.94
Savings Account 2
$6,015.00
$7,457.78
$1,442.78
23.99
Savings Account 3
$26,342.00
$26,342.00
$0.00
0.00
Investment Linked Fund
$8,659.81
$9,265.64
$605.83
7.00
Schroders Commodity Fund
$9,358.21
$9,276.02
($82.19)
-0.88
Stock Holdings
$9,310.00
$9,370.00
$60.00
0.64
Phillip Money Market Fund
$15,048.76
$15,052.66
$3.90
0.03
Physical cash
$1,000.00
$1,000.00
$0.00
0.00
Market Value Of BTO Flat (to be built in 2016/2017)
$750,000.00
$750,000.00
$0.00

Total Assets
$828,365.78
$829,766.10
$1,400.32
0.17





Liabilities




Home Loan
$617,500
$617,500
$0.00
0.00





Net Worth (including flat to be built in 2016/2017)
$210,865.78
$212,266.10
$1,400.32
0.66
Investible Net Worth
$78,365.78
$79,766.10
$1,400.32
1.79


Asset Allocation
Weightage
Cash or cash equivalents
$51,854.44
65.01%
Stocks
$9,370.00
11.75%
Unit trusts
$9,265.64
11.62%
Commodities
$9,276.02
11.63%
Total
$79,766.10


Updates
  • Expenses were high this month due to many reasons : Celebrated anniversary with girlfriend, partially sponsored my girlfriend on a holiday trip and bought a new pair of working shoes.
  • 65% of investible net worth is now in cash
  • Have not been blogging much due to the upcoming CFA Level 1 exam in December
  • I was hinted by my boss today to expect about 2-3 months of year end bonus (before proration as I started in May). Also, my pay increment will not be significant as I did not work a full year.

Wednesday, October 30, 2013

Some Royal Mail Share Certificates Issued In Error

The Telegraph reports that an employee of Equiniti, the firm handling Royal Mail shares bought via the Government's website, has admitted that a software error was responsible for investors being mistakenly issued with share certificates, according to one shareholder.

The shareholder contacted The Telegraph to say that a member of the company's call centre staff, had "spilt the beans" about the error on the Equiniti web page on which customers chose how they wanted to hold the shares.

The receipt of physical certificates can delay the speed at which an investor wishes to sell/receive the proceeds from the sale of his/her share allocation.

When asked previously about the large numbers of people who claimed to have received unwanted certificates, Equiniti said:
"We have investigated cases which have been brought to our attention and in these cases our records show that share certificates were opted for."

Friday, October 25, 2013

UK Economy Grows By 0.8%

ONS statistics published today show that Britain's economy grew by 0.8% between July and September of this year, that is the best performance since Q2 2010. The services sector accounted for the majority of the growth, itself growing by 0.7%.

It is encouraging to note that Mark Carney, the Governor of the Bank of England, has said that the Bank will not rush to raise interest rates or withdraw support for banks.

Now if the government could only bring itself to simplify the tax system, and indeed lower taxes, we might be assured that this growth can be maintained!

Wednesday, October 23, 2013

The Dangers of Contactless Cards

There has been some controversy over the security of "contactless" payment cards (which don't require Pin numbers, merely contact with a reader for payments of up to £20).

All well and good, so long as the right card makes the payment and the wrong one doesn't make a payment when it merely passes by a reader (primed to deduct a payment) because it is in someone's pocket/wallet.

The banking industry have denied there is such a problem.

However, First Direct has written to its customers, as per the Telegraph:
"We have made changes to clarify that if you have a contactless debit card you must remove it from your wallet or purse before using it to make a contactless payment."
A spokeswoman said:
"If you don't remove cards from your wallet there is a danger the payment may be taken from the wrong card. It could be a bit of a nightmare if it came from a card where there wasn't enough money."
In other words there is a potential problem with these cards, not least the possibility that a suitably well positioned felon (ie standing near a person who has a contactless card) with technical knowledge could electronically pick your pocket!

Monday, October 21, 2013

Greece's Budget Deficit Falls

Apparently, if statistics from eurostat can be believed, Greece's budget deficit for 2012 has been revised down from 10% of GDP to 9%

However, before popping the champagne corks, it should be remembered that debt stands at 156.9% of GDP.

Wednesday, October 16, 2013

Royal Mail Shares

Shares in Royal Mail closed at 489p on the company's first day of full trading on Tuesday, as at the time of writing they currently stand at 475p.

They were priced at 330p.

Friday, October 11, 2013

Royal Mail Bonanza

Conditional dealings in Royal Mail that began to day for City institutions produced an initial rise of 38% (456p on the offer price of 330p), this fell back to around 444p.

Private investors will receive 227 shares each, and official listing/trading will commence next Tuesday.

Back to the 1980's we come!

Thursday, October 10, 2013

Wednesday, October 9, 2013

Royal Mail Sell Off

Sky News reports that over 100,000 members of the public have applied to buy shares in Royal Mail ahead of last night's deadline. This makes the £3.3BN sale one of the largest privatisations for decades.

Approximately 150,000 Royal Mail staff will receive about £2200 of free shares.

Saturday, October 5, 2013

CRISIS IN ISLAMIC FINANCE EDUCATION

Islamic finance as practiced today is a new phenomenon that is very interesting to look at not because it is related to the so-called growth  rate that is so impressive according to many reports of late. True that to a certain extent,  the figure normally quoted to support this claim of impressive growth is there to be appreciated but the basic question to ask is whether such an achievement is truly an achievement worthy of celebration.

The reason for this matter to be raised is simple; the growth as mentioned is not free from critics who  pointed to claims that many Islamic financial products that have so far been introduced and practiced in the market mimic their conventional counterparts such that they have lost their original Islamic identity. The  issue has become more prominent with the debate surrounding whether what is needed are Shariah compliant products or Shariah based ones. Proponents on both sides of the argument have to accept the fact that in Islam what is required is that all what need to be done need to be done according to the Islamic ways of doing things. Hence the key to the whole issue is closely related to the level of knowledge prevailing in the market about what is the Islamic ways of conducting financial and commercial  activities. Everything is related to the level of knowledge needed to ensure consistency with the Islamic dictates as properly understood.

But the sad thing is that there seems to be a crisis in the area of education in Islamic finance where it has been said that a minimum standard has not been applied both in terms of student and lecturer  intakes at various level of education in Islamic finance. Issues have been raised as to the presence of not so qualified teaching staff at various centers  offering Islamic finance  education, and there seem to be no control as far as the necessary qualification is concerned that have led some observers to conclude that given the existing mode of education, there will be no hope for the field to be improved in terms of quality education when both of the aspects as mentioned are not given adequate attention. There are many centers that have been established  recently or in the past couple of years to offer related courses at various levels of Islamic finance education but the sad thing is that many a time it is found out that such education lack substantive coverage on basic Islamic concepts  just because many individuals who are tasked to teach are not suitable or qualified enough to present Islamic view on financial  and business matters given their background, as they are mostly trained in western economic or financial system and thus lacking in substantive Islamic knowledge. With these background can it be expected that they can  present to the students Islamic information they way it should be when they themselves are still struggling with some basic understanding  about finance from Islamic perspective. The outcome of all of these phenomena is an education which is slanted more toward  imparting conventional  financial knowledge rather than the Islamic one. This problem is further aggravated by the fact that, the majority of players in Islamic finance sectors come from conventional background with little proper education or training in Islamic finance the correct way. It has been noted in some situations, people with little credential in terms of Islamic knowledge have been appointed to set direction to what is supposed to be Islamic finance education. If this is the situation what hope is there that the future direction of Islamic finance is leading to a correct destiny as those who are mandated to set the future are themselves confused about what the direction would be. To make  matter worse there are instances where people moved to this field just because they saw more opportunities lie in this field not being truthful to themselves  whether they have the minimum standard to be there or not. It is surprising to see or even mind boggling to ponder about the fact that in certain  circumstances people are busy  talking about the need to regulate Shariah advisors but not other players in the markets who are themselves  devoid of minimum necessary qualification to talk about things Islamic but have  full freedom to practice with little scrutiny as to their suitability and qualification. Unless minimum standard is put in place to regulate the basic qualification needed to teach Islamic finance related subjects at various centers of education offering courses in Islamic finance, there is little hope that the level of knowledge can be improved in the correct manner; truthful to a saying which says that “one who has not in possession cannot give.. .”.

Tuesday, October 1, 2013

Net Worth Update (September 2013)

Current Net Worth
Assets
Aug-13
Sep-13
Change
% change
Savings Account 1
$2,706.00
$2,632.00
($74.00)
-2.73
Savings Account 2
$5,116.49
$6,015.00
$898.51
17.56
Savings Account 3
$26,325.95
$26,342.00
$16.05
0.06
Investment Linked Fund
$8,128.83
$8,659.81
$530.98
6.53
Schroders Commodity Fund
$9,722.21
$9,358.21
($364.00)
-3.74
Stock Holdings
$8,760.00
$9,310.00
$550.00
6.28
Phillip Money Market Fund
$15,042.25
$15,048.76
$6.51
0.04
Physical cash
$1,000.00
$1,000.00
$0.00
0.00
Market Value Of BTO Flat (to be built in 2016/2017)
$750,000.00
$750,000.00
$0.00

Total Assets
$826,801.73
$828,365.78
$1,564.05
0.19





Liabilities




Home Loan
$617,500
$617,500
$0.00
0.00





Net Worth (including flat to be built in 2016/2017)
$209,301.73
$210,865.78
$1,564.05
0.75
Investible Net Worth
$76,801.73
$78,365.78
$1,564.05
2.04

USA In Shutdown

The USA is in financial shutdown, as Congress has failed to find a solution to the ongoing financial impasse (ie increasing the debt ceiling).

As a result, hundreds of thousands of federal workers will be put on leave without pay and all but the most critical government services will be halted for the first time in 17 years.

Methinks the voters of America will be less than impressed with the antics of their politicians.

Tuesday, September 17, 2013

Barclays Bank Error In Your Favour - Collect £100M

I see that Barclays is fond of playing Monopoly, and has managed to create a bank error (for once in its customers' favour) that will entail a refund to affected customers (estimated at being around 300,000) of around £100M.

Barclays customers are to receive compensation because it miscalculated the interest owed on personal loans, the errors date back to October 2008.

Other divisions (Barclaycard, Barclays Wealth and Barclays Corporate) are now undertaking a review to see if customers were short-changed by the errors ("technical documentary errors").

Barclays will write to customers in the coming weeks. Barclays is quoted by the Telegraph saying that said it had "identified certain issues with the information contained in historic statements and arrears notices relating to consumer loan accounts. It is therefore implementing a plan to return interest incorrectly charged to customers".

A spokesman for the bank said:
"Barclays has proactively reviewed information it has historically sent to its customers relating to interest charges, where we have found technical documentary errors. As a result Barclays has identified certain issues with the information contained in some statements and arrears notices relating to consumer loan accounts. 

Due to these notification errors, interest was not due on certain accounts during the period that Barclays made this mistake, and whilst no one has been mis-sold to, customers are entitled to have their interest payments returned. No customer will pay more than they were ever contractually expected to. 

Barclays has notified the Office of Fair Trading (OFT), which is responsible for consumer credit issues, and is implementing a plan to return interest payments to customers as swiftly and efficiently as possible. Barclays is undertaking a review of all its businesses where similar issues could arise to assess any related issues. 

Any affected customer will be contacted by Barclays and customers do not need to take any action."
To add to Barclays shame, campaign group Move Your Money said that Barclays was the lowest scoring financial institution out of 70 assessed, scoring four out of 100 possible points for honesty and customer service.

Well done Barclays!