UK Financial Bulletin 20 Feb – from Neil Gubbins, St James Place Wealth Management

Please download the Market Bulletin 20 February 2012 which contains the following points:

Global equities resumed their upward path last week as investors put to one side the worries over Greece and took heart from further signs of a brightening outlook for the US economy.
The relative strength of recent market performance masked another week of twists and turns in the ongoing Greek saga, which saw the prospect of a ‘disorderly’ default by Athens increasing in the minds of many.
The price of Brent crude, the benchmark for oil prices in Europe, has been steadily rising over the past few weeks as investors grow increasingly worried about Iran’s nuclear ambitions, with the US, UK and Europe all imposing sanctions to restrict Iran’s ability to sell oil.
The official measure of inflation, the Consumer Prices Index (CPI) fell sharply last month to a 14-month low of 3.6% from 4.2% in December, according to the Office for National Statistics.

Regards

Neil

Neil Gubbins

www.sjpp.co.uk/neilgubbins

ST. JAMES’S PLACE WEALTH MANAGEMENT

11 Hamilton Place
Mayfair
London W1J 7DA

T: 020 7495 1771
M: 07739 263334

January 3rd 2012 Market Bulletin

Follow the link to the Market Bulletin 03 January 2012 for this week’s Bulletin which contains the following points:

2011 is probably a year most investors wish to forget; one which witnessed high volatility amidst the eurozone sovereign debt crisis and left global markets suffering from crisis fatigue.
However not all asset classes suffered – high quality government bonds did very well and not all equity markets fell. The Dow Jones index of super blue-chip US companies actually ended the year higher. Anyone investing in a balanced portfolio with an income bias would have most likely been surprised on the upside.
With the eurozone crisis unresolved there will, almost without doubt, be continued uncertainty this year and we mull over some of the most likely questions investors may be concerned about. Despite continued uncertainty, for those investors taking a pragmatic approach there are positive solutions in the form of diverse portfolios which can offer investors some degree of confidence in the year ahead.
To start the New Year, a number of our managers give their views on the outlook for equity markets.

Regards

Neil Gubbins
ST. JAMES’S PLACE
WEALTH MANAGEMENT
11 Hamilton Place
Mayfair
London W1J 7DA
T: 020 7495 1771
M: 07739 263334
www.sjpp.co.uk/neilgubbins

Finance Update 14/11/2011

Please find attached this week’s Bulletin Market Bulletin 14 11 2011which contains the following points:

Italy took centre stage in the markets as the issue of their rising sovereign debt yields came to the fore. French bond yields also came under fire following a mistaken downgrade by Standard & Poor’s rating agency. However, a new government for both Greece and Italy and ECB intervention in the bond markets pushed the FTSE 100 up 0.3% in the week to close at 5545.38.

The yield on Italy’s 2-year and 10-year bonds crossed the psychologically important 7% mark last week which was the point as which Portugal, Ireland and Greece had to be bailed-out. Thankfully ECB intervention caused the yields to fall back and Italy managed to raise €5 billion in an auction of one-year securities paying an average rate of 6.09%.

Data from China showed that inflation is falling and growth is strong so where is the eurozone aid that was suggested some weeks ago? According to independent sources in the Chinese government it is tied up in a political deadlock after Europe spurned all of Beijing’s demands.

EU leaders have many routes to take, none of which are easy but the sudden change in Italy’s fortunes, considering just how big it is, may just force EU leaders to take decisive action and implement policy that could bring Europe out of its debt crisis.

Finally, with European sovereign debt in the press we take a look at the UK Gilt market, exploring why yields are so low compared to Europe and Ian McVeigh, UK Equities Team Director at Jupiter Asset Management, gives his view.

Regards

Neil

Neil Gubbins

ST. JAMES’S PLACE
WEALTH MANAGEMENT
11 Hamilton Place
Mayfair
London W1J 7DA

T: 020 7495 1771
M: 07739 263334
www.sjpp.co.uk/neilgubbins

Financial Market Bulletin 07/11/2011

Please find attached this week’s Market Bulletin 07 11 2011 which contains the following points:

Better than expected economic data from the US and UK was, once more, overshadowed by the ongoing eurozone sovereign debt crisis causing equity markets to give ground and end the week mostly lower.
Greece’s announcement of a referendum on the latest bail-out package was unexpected and sent stock markets into reverse – the idea was subsequently shelved and the Greek Prime Minister narrowly won a vote of confidence. This proved short-lived too – Mr Papandreou resigned over the weekend and discussions are taking place to find a new cross-party leader pending elections.
The G20 summit in Cannes proved a damp squib with leaders failing to agree on funding sources for the EU bail-out fund – hopes that China might contribute were also dashed. The last port of call was the IMF but here too there was opposition from the US and in its final communiqué the G20 talked of providing more solutions next February.
One major agreement though was for Italy to informally open up its books and allow IMF officials to monitor its austerity programme – unfortunately this backfired when Prime Minister Berlusconi said the sell-off in the Italian bond markets was a “passing fashion”. Investors, fearing that IMF involvement was a precursor to a full bail-out reacted by selling off bonds, causing yields to rise to record levels.
Despite the ongoing crisis, professional investors are reminding people that there are many high quality international businesses that are doing well and that growth in the emerging world continues to offer huge opportunities – Jupiter investment Management’s CIO John Chatfeild-Roberts gives his views.

Regards

Neil

Neil Gubbins

ST. JAMES’S PLACE

WEALTH MANAGEMENT

11 Hamilton Place

Mayfair

London W1J 7DA

T: 020 7495 1771

M: 07739 263334

www.sjpp.co.uk/neilgubbins

Market Bulletin

Please find the latest Market Bulletin 30 08 2011 which contains the following points:

Equity markets rebound on better than expected US consumer data and hopes for further stimulus packages in the US.
Global banks remain in the spotlight as data sends conflicting messages on their ability to raise capital – a strong banking system is crucial to economic expansion.
The price of gold falls $200 as investors move back into equity markets.

Kind regards.

Neil

Neil Gubbins
ST. JAMES’S PLACE
WEALTH MANAGEMENT
11 Hamilton Place
Mayfair
London W1J 7DA

T: 020 7495 1771
M: 07739 263334

www.sjpp.co.uk/neilgubbins

If you wish to view the St. James’s Place Partnership email disclaimer, please click here

UK Market Bulletin

Please find (attached to this link) this week’s Bulletin which contains the following points:

Global equity markets enjoyed a mini-bull run last week – one of the best since the Japanese earthquake – enabling most major indices to return to two-year highs with Wall Street leading the way

Better-than-expected US employment data reinforced optimism that the economic recovery is gathering further momentum
Whilst some believe current US equity values are justified, others take the view that it is only the US Federal Reserve’s QE2 policy that is keeping the economy going and this is due to finish in June
Eurozone woes hit the headlines – Irish banks are being bailed-out once again to the tune of €24bn and Portugal is also expected to ask for help via the newly established European Stability Mechanism
Economic data showed that the Japanese economy had, unsurprisingly, taken a huge downturn following last month’s terrible earthquake
Star fund manager, Neil Woodford of Invesco Perpetual, believes now is the best time for a decade to buy British shares and he explains why

Kind regards,

Neil

Neil Gubbins

ST. JAMES’S PLACE WEALTH MANAGEMENT

11 Hamilton Place, Mayfair, London W1J 7DA

T: 020 7495 1771 M: 07739 263334

www.sjpp.co.uk/neilgubbins

UK Budget Update

Just received this – thought it might be of interest:-

This afternoon I delivered my second Budget. I wanted to write to you immediately to explain our plans and set out some of the key measures.

Last year’s Emergency Budget was about rescuing the nation’s finances and paying for Labour’s mistakes. Today’s Budget sticks to the plan, and focuses on reforming the economy to ensure jobs and growth for the future. I am also doing what I can help to families with the cost of living – including an immediate cut to fuel duty.

I know times aren’t easy for families at the moment, so this Budget announced help, including:

• An immediate cut in fuel duty by 1 pence per litre and a delay of April’s inflation rise in duty to next January. This means fuel duty is 6 pence lower than it would be under Labour. We are paying for this by putting up taxes on the oil companies while the oil price is high to create a Fair Fuel Stabiliser.
• An increase in the personal allowance from £6,500 to £8,100 over the next two years. This will mean £326 extra for working people and it will lift over a million low paid people out of tax altogether.
• £250 million to help 10,000 first time buyers get on the housing ladder.
• A freeze in Air Passenger Duty this year.
• Money for councils so virtually every council in England will freeze council tax next month.
• A new scheme to allow Gift Aid to be claimed on the contents of charities’ collecting tins and street buckets, and support for largest donations with radical reforms to Inheritance Tax – if you leave 10 per cent or more of your estate to charity, then the Government will take 10 per cent off your inheritance tax bill.

As well as helping in the short term we need to reform our economy to create growth and jobs in the future. The hard truth is that Britain has lost ground in the world economy.

Under Labour manufacturing halved, and growth depended on unsustainable public spending, debt and financial services. We need a new model of growth based on investment, manufacturing and exports – a Britain that makes things again. This Budget started that process, with measures that include:

• An additional 1p cut in corporation tax. In April this year corporation tax will fall from 28% to 26%. It will continue to fall by 1% in each of the following three years reaching 23%. Britain will be competitive again.
• Doubling Entrepreneurs Relief to £10m and sweeping changes to the generosity, simplicity and reach of the Enterprise Investment Scheme, with an increase in the income tax relief available from 20% to 30%.
• An extension of the small business rate relief holiday for another year.
• An additional £100m for new science facilities and more generous tax credits for small business research and development.
• 21 new Enterprise Zones with business rate cuts and new broadband to promote growth across the country.
• A review of the revenue raised by the temporary 50p rate of income tax.
• 50,000 additional apprenticeships and 100,000 work placements for young people.
• £3bn for a Green Investment Bank, which will generate an additional £15 billion in private sector investment in green projects and low carbon energy.

The Confederation of British Industry has already endorsed our approach saying: “This Budget will help businesses grow and create jobs.”

So this is our plan – reforming the economy to create jobs and supporting families. This Budget will put fuel back in the tank of Britain’s economy.

George Osborne
Chancellor of the Exchequer

Pensions – Don’t Come a CROPPER

DON’T COME A CROPPER!

With the continually shifting sands of State pension regulations, both in the UK and Spain, it is no wonder that many individuals find it difficult to know what they will be entitled to as retirement looms.

To provide as much advice and information as possible to expatriates, the British Consulate is attempting to disseminate the facts via its department based at the Consulate in Alicante. In their efforts to support British nationals here in Spain, the Pensions, Benefits and Healthcare Team members are passing on information via talks to interested organisations, leaflets and the internet.

Their key message is contained in a new slogan ‘Don’t come a cropper’ which Laura Leman from the Consulate explained in a visit to the Marina Alta Business Club (MABC) in Javea.

Basic, but very important advice is held within their mnemonic –

C – Call us – don’t leave it too late

R – Rights and Entitlements – find out

O – Official sources – use them

P – Plan and prepare for the future

P – Padron – register

E - Engage and integrate with Spanish people

R - Responsibility – inform authorities if circumstances change

As members and guests of MABC were provided with a very informative and interesting talk, there were many surprises in store as Laura set out the facts for claiming pensions, unemployment benefit and accessing healthcare.

For example, Laura informed her audience that contributions paid in any EU country can be added together to increase entitlement, and that applications for pension must be made in writing to the country where the employee last worked.

The Pension Reform Act in the UK, as well as changes in Spain, have resulted in an increase in pensionable age and with the UK also reducing the number of qualifying years for a full pension, it is difficult for individuals to know exactly where they stand.

Further information about accessing healthcare, applying for unemployment and other benefits, is available by contacting the Pensions, Benefits and Healthcare Team at the British Consulate in Alicante via the website www.ukinspain.fco.gov.uk. Laura can be contacted by email at laura-leeman@fco.gov.uk and there are lots of other websites available providing relevant information on these topics, some of which are listed below.

www.ukinspain.fco.gov.uk – very informative website on many subjects

www.seg-social.es – Social Services website available in English for Spanish pension and benefit entitlement

www.direct.gov.uk – all UK public services

www.dwp.gov.uk – International Pension Centre and UK Pension and Benefit enquiries

www.hmrc.gov.uk – Pension forecast; Voluntary Contributions

www.dh.gov.uk – Overseas Healthcare Team

www.redtrabaja.es – (in Spanish only) – provides information on all unemployment benefits

Article by Chris Sinclair – reproduced by kind permission from her excellent article in the RTN – member of Marina Alta Business Club

Our thanks to Laura Leeman from the British Consulate in Alicante who made the excellent presentation to members and guests on March 3rd. The meeting was held at Peri Pera in Javea Port and was open to members and friends of the Club. As you can tell from Chris’s Article it was an interesting evening with a lot of information on pensions and accessing them from Spain.

We were pleased to have such a good turn out and the evening was so successful it over-ran

Japan – Investment Update

It has now been five days since the magnitude 9.0 earthquake hit Japan. Following falls of 6.2% on Monday and 10.5% on Tuesday, the Nikkei rebounded to close up 5.7% in overnight trading. Since the earthquake struck the MSCI World has fallen by 3.2% and the FTSE 100 by 3.3%; however, the markets look to be stabilising.

Despite the overall falls in Japanese markets, and notwithstanding the tragic human cost to this event, our managers have a broadly positive outlook for the recovery of Japan. The following is a summary of further views obtained from our investment managers as the situation has unfolded.

Richard Oldfield – High Octane

Richard Oldfield, the manager of the High Octane fund, has a holding of approximately 21.3% in Japan. On Tuesday he provided the following comment:

“Our only action to date has been to increase marginally the investment in Hitachi. Hitachi has been affected most in share price, it appears to us, because they have some factories in the region of the tsunami, and because they have a nuclear operation (in joint venture with GE of the US). Ex-earthquake, earnings this year were likely to be around ¥50 with considerable room for further improvement. We regard the share price, at ¥360, as highly attractive.

Needless to say, the position is highly uncertain, with the situation at the nuclear facilities still unresolved, and risk of more explosions, radioactive leaks, and casualties. But however ugly the immediate prospect, in time what has happened in Japan in the last week will be seen as interruption. The government and Bank of Japan will presumably do all they can to stimulate the economy – which, involving monetary and fiscal stimulus, we would regard as likely to weaken the yen rather than, as in the immediate aftermath, to strengthen it because of funds being repatriated to Japan. Companies will lose production, in some cases and in some areas for a prolonged period, but nonetheless this too is an interruption. Meanwhile share prices are 20% lower than they were a few days ago so that the valuation, in terms of price to book value and other measures, of companies is even more attractive for the long term investor. We are therefore inclined to invest more in existing Japanese holdings or in other companies. We will be evaluating this carefully over the next day or two. Additional investment in Japan also involves disinvestment from somewhere else, and one of the main difficulties will be deciding what, if anything, to sell.”

Bernard R. Horn Jr – Worldwide Opportunities

Bernard R. Horn Jr., the manager of the Worldwide Opportunities fund, has a total holding of around 7.2% in Japan.

In a telephone call with Bernie yesterday afternoon he stated that he is keeping a very close eye on the situation in Japan and paying particular attention to the uncertainly over events surrounding the nuclear power plants. Bernie went onto say that “of course, an event like this will cause almost every sector to suffer but most of the stocks held within the fund are defensively positioned and should recover as Japan re-builds itself”. In terms of the portfolio holdings, only Nippon Yusen sustained damage to a tiny proportion of its shipping fleet.

Overall, Bernie said that the fund is well positioned in the global market by currently having an elevated cash level, at around 9.7%, as a result of selling top performing stocks. Bernie now sees this free cash as an excellent opportunity to buy selectivity. Moreover, some stocks outside of Japan are actually benefiting, such as Thai Oil and Samsung, as Japanese manufactures temporarily slow down production.

THS Partners – THSP Managed and International

Cato Stonex, Mark Evans, Robert Smithson and Ali Miremadi manage our THSP Managed and International funds which have a limited exposure to Japan of around 1.4%. THSP made the following comment yesterday:

“Whilst the Japanese holdings have fallen the investments still represent a small part of the portfolio (under 4%) and their effect on the overall performance is therefore extremely modest. However, the general market has also weakened significantly, which has obviously been reflected in our portfolios. Since the start of the year, the market had performed well and a retrenchment was likely. A combination of the news from North Africa and the disaster in Japan have magnified and accelerated this process. As a final word, we note that every crisis produces opportunities and we are investigating some of the value opportunities that have appeared.”

Japanese Equity Team – Invesco Perpetual Managed and Strategic Managed

The Invesco Perpetual Managed and Strategic Managed funds have approximately 3.1% in Japan. The Japanese Equity Team at Invesco Perpetual made the following comment yesterday:

“The devastating earthquake and tsunami that hit Japan on Friday has clearly had a huge human cost, the full extent of which will only become clear over the next few weeks. In terms of the economic impact, we believe that there will be some short-term negative consequences, but that the longer-term recovery remains in place. The economy has been experiencing a rebound in activity following the contraction in the fourth quarter of 2010, with key indicators, including export volumes and levels of domestic investment picking up. The economy’s full recovery from this brief lull is now likely to experience a short-term interruption, but we do not expect there to be a significant impact beyond this timeframe.

The area hit, around the city of Sendai in the Tohoku region, has limited production facilities, which are concentrated in central Japan. While the current disruption to power supplies has extended further across the country, we expect this to be quickly resolved and for activities outside of the area directly affected to return to normal. The Tohoku region accounts for around 8% of Japanese GDP, approximately half of the Kobe area, which experienced Japan’s last comparable earthquake in January 1995. Industrial production fell into negative territory in February following the Kobe earthquake, but was positive again by March.

Japanese authorities have been quick to respond and the Bank of Japan has announced that it will add a further ¥5 trillion to its asset purchase programme and is providing ¥15 trillion (approx. $183bn) of liquidity to financial markets. It is also encouraging that, despite the likelihood of a special budget to help finance the reconstruction work necessary, bond prices have remained firm. The reconstruction effort in itself may also have a positive impact on the economy. Monday’s trading in Japanese financial markets saw significant weakness. Volatility during the current situation is to be expected, but on fundamental grounds we continue to see significant value in Japanese equities. In our view, the recovery in developed markets, most notably the US, and the ongoing growth in Asia are more significant drivers of profitability among Japanese companies. Growth in these regions is likely to remain supportive and we believe that the traditional transmission of export strength into the domestic economy will again be evident.”

The information contained herein represents the view and opinions of our fund managers, and not those necessarily held by St. James’s Place Wealth Management.

Regards

Neil

Neil Gubbins

ST. JAMES’S PLACE

WEALTH MANAGEMENT

11 Hamilton Place

Mayfair

London W1J 7DA

T: 020 7495 1771

M: 07739 263334

www.sjpp.co.uk/neilgubbins

British Consulate to Speak on Pensions

Tonight (3^rd March) Laura Leeman, from the British Consulate in Alicante, has kindly volunteered to make a presentation on UK Pensions to members and friends of Marina Alta Business Club in Jávea.

Whilst primarily aimed at expatriate British workers and businesses based in Spain – Members of the Consulate’s UK Pensions’ Office have also expressed an interest in meeting and talking to some of our friends who are already in receipt of UK pensions, so Laura has agreed to cover pension issues from both perspectives.

So if you are a British citizen and have ever made National Insurance contributions via a UK based employer – however briefly and however long ago, then this talk is likely to contain information that may be useful for you. After the talk, Laura has also volunteered to chat informally to anyone who wishes to raise a pension concern.

As this is a special event - the club evening will be open to non members and guests – so if you know some-one who might find the talk useful, please feel free to forward this email.

The event will start at 7:30pm for an 8 o’clock start – at Peri Pera Café in Jávea Port (very near the Dolphin Roundabout – next to the zebra crossing & opposite the vet – on the road to the Police Station and Sports Pavillion).

Thank you – I hope to see you there.

Gaile