DLM Capital Group – a developmental investment bank that supports economic and social infrastructure projects with the aim of driving GDP growth and improving lives.
Founding chairman and group CEO of investment firm DLM Capital Group, Sonnie Ayere
DLM Advisory Partners (DLMAP), formerly Dunn Loren Merrifield Advisory Partners, is the advisory and capital-raising arm of DLM Capital group. The principal services provided by DLMAP include financial advisory, debt capital-raising, equity capital raising, mergers and acquisitions, and company set-up advisory.
DLMAP has played a leading role in structured finance and securitisation within Nigeria. “We have acted as sole arranger to more than 80 percent of structured finance transactions in Nigeria, and 100 percent of all securitisation transactions in the market,” says CEO Sonnie Ayere.
Most
Innovative Transaction of 2019
In 2019, DLM executed the first Bus Rapid Transit (BRT) securitisation in Nigeria, working with the sponsor, Primero Transport Services Limited (PTSL). The system caters to residents of the country’s most densely populated city, Lagos. DLM raised ₦16.50bn ($45.8m) through the securitisation of the company’s BRT tickets receivables. The sponsor is licensed to operate the longest BRT route in West Africa, 35.3km, with its 434-bus fleet.
DLM Capital Group
A feasibility study conducted put the daily passenger carriage at about 226,300 passengers per day. Due to working capital pressures, the company was only able to serve an average of 135,000 daily passengers before the securitisation transaction in 2019.
The ₦16.5bn 17 percent Series 1 Fixed Rate Bonds issued were primarily used to refinance all pre-existing commercial banking loan facilities on the books of the sponsor. The transaction provided the company with savings in interest, shaving the cost of funds from 27 percent per annum to 17 percent. At the same time, it extended the tenor of the company’s debt from three years to seven.
With this transaction, DLM was able to provide the company with up to 10 percent savings in interest, reducing the cash required to service debt and improving the company’s working capital. DLM also advised on the restructuring of the company’s balance sheet by moving the operating assets into a new vehicle and eliminated the strain of depreciation charges.
Focus for
2020
DLM is in discussions with industry stakeholders and umbrella bodies to establish proprietary funding conduits across key sectors of the Nigerian economy. It intends to include microfinance, agriculture, education, health care and a continuation of other funding programmes for the mortgage, real estate and transportation sectors.
Working with a DFI partner, the company recently concluded the design of an aggregation vehicle aimed at providing local currency, wholesale funding solutions to micro-lenders in Nigeria by way of loan book securitisation.
A similar platform to provide financing to primary users of agriculture commodities is currently being developed.
Traveling for work is a complex issue
when it comes to your eligibility for workers’ compensation. The general rule
is that workers’ compensation doesn’t cover your commute to and from work.
Does Workers’ Comp Cover
Travel for Business?
Yes, workers’ comp covers travel for
business. When you’re traveling because of your work, you can claim workers’
compensation in the event of an injury. The workers’ compensation system
operates the same way whether you’re actively on the job or traveling for your
employer.
Personal errands during work travel are
not covered; however, the travel itself and incidental activities like the
hotel and meals still fall under the workers’ compensation system. Workers’
compensation covers travel for business except for strictly personal activities
during the trip.
Does Workers’ Comp Cover
Travel to and From Work?
Workers’ comp does not cover travel to
and from work. However, there may be situations when you are traveling related
to work that are actually covered. Travel to and from work is generally not
included. Still, if you are running errands for your employer or on a
work-related travel assignment, you may actually be classified as working.
It depends on whether you’re serving the
interests of your employer during the travel. Although the general rule is that
workers’ comp does not include travel to and from work, there may be situations
where your traveling counts as being on the job.
Workers’ Compensation and
Travel
The purpose of workers’ compensation is
to provide employees easy access to financial compensation when they’re hurt at
work. The general rule is that you can claim workers’ compensation for
work-related injuries. If you’re on the job and you get hurt, you can access
the workers’ compensation system to pay for your medical bills and provide
replacement income.
However, workers’ compensation doesn’t
cover the risks of daily life. For that reason, the employee’s personal commute
doesn’t fall under the workers’ compensation system. If you get hurt going to
or from work, you have to look to your own car insurance or personal insurance
to pay your expenses. You may also bring a third-party claim for financial
compensation, but the person or entity that caused your injury is responsible
for your damages, not your employer.
Traveling for Work
However, even if you’re traveling at the
time of your injury, you’re not necessarily out of the workers’ compensation
system. You may be traveling for work and not realize it. When you’re traveling
on company business, you’re still covered by workers’ compensation.
Even things that are incidental to the
travel itself, like staying at a hotel or eating meals while away from home,
can classify you as working for the purposes of workers’ compensation. It’s
essential to evaluate the entire circumstances present when the accident
occurs.
Buma vs. Providence Corp.
Development – Nevada Supreme Court
In theBuma v.
Providence Corp. Development case, the Nevada Supreme Court
recently clarified the rules when it comes to what counts as work-related travel.Nevada Revised Statutes 616C.150(1) states
that a person must show their injury arises out of the course of employment.
The court said that a person might be in the course of their employment even if
they’re not directly on the route of travel at the time of the injury.
In the Buma v. Providence Corp. case, the
victim was the vice president of sales for his company. He worked from home and
made his own travel arrangements. The victim traveled out of state for a
conference. He stayed at a ranch with a friend and affiliate of the company.
Together, the two prepared joint presentations to give on behalf of the
company. The victim died while riding an ATV on the ranch.
The third-party workers’ comp insurer,
and the lower court, denied the victim’s family workers’ compensation benefits.
They said that the accident did not arise out of work duties. However, the
Nevada Supreme Court vacated the lower court’s decision.
When Does an Injury Arise out
of the Course of Employment for Workers’ Compensation Purposes?
The Nevada Supreme Court said that an
injury arises out of the scope of employment when there is a causal connection
between the victim’s injury and the nature of the employee’s duties. UnderNevada Revised Statutes 616B.612(3), all
travel that an employee gets paid for is part of the course of employment.
However, even if part of the travel isn’t
compensated hourly, it may still be work-related travel. Generally, workers’ compensation
covers business trips. It covers the actual business part of the trip, but it
also includes staying in hotels, sleeping, eating, and other navigation that
has to happen for the trip.
Does the “Coming and Going”
Workers’ Compensation Rule Apply During Business Travel?
In the Buma case, the lower court applied
the “going and coming” rule. The rule prohibits compensation for injuries that
occur during the commute. The Supreme Court explained that the employer is not
liable for the daily dangers of the employee; however, the commuting rule isn’t
applicable when a person travels for work. Under Nevada law 616B.612(3),
traveling employees are covered, including acts that are incidental to
traveling.
The court said that work travel doesn’t
cover social and recreational activities that a traveling employee chooses to
pursue. These are things that occur for strictly personal amusement. To be a
personal activity, the employee must show an intent to abandon the job
temporarily. It’s a very fact-dependent question that depends on the unique
situation in each case.
Conclusion
The workers’ compensation commuting rule is complicated. There are times that work travel is covered, and you are eligible for benefits. Sometimes it can be a difficult question of whether you’re traveling for business. The Las Vegas workers’ compensation attorneys at Adam S. Kutner, Attorney at Law explain travel, and the 2019 Nevada Supreme Court case of Buma vs. Providence Corp. Development.
The best way to know if you qualify for
workers’ compensation is by getting a personal review of your claim by a
qualified and experienced attorney.
Just under half of firms in the UK (46%) and US (45%) predict their country will go into recession in 2020, according to research by trade finance provider Stenn
The poll of over 700 senior executives at medium-large sized businesses across the UK, US and China, also revealed that well over a third (37%) of UK firms and one in three (35%) US firms expect to see a global recession or international global crisis in 2020
In the UK, a third (33%) of firms expect the economy to shrink in 2020, with well over a tenth (14%) expecting it to contract by 1-3%
A further 6% expect the UK economy to stay flat with no growth
In the US, almost one in five (16%) expect the economy to shrink in 2020, most likely by 1-3% (7%)
In addition, 6% also expect it to stay flat with no growth.
Dr. Kerstin Braun, President of Stenn Group, commented: “2019 was
weaker than expected and the stakes are only higher for 2020.
Governments around the world are having to act forcefully to prevent the
economic hit from Covid-19 deepening, taking a coordinated approach
and opening the liquidity pipe for both fiscal and monetary support.
While a low interest rate provides an important cut in borrowing
costs for businesses and consumers at this delicate moment, the
coronavirus outbreak will be a real test of the health of the UK and US
economies. Lowering rates alone isn’t enough to be effective in offsetting the
economic impact of Covid-19. We already know the Chinese economy is going to be
hit in the first and second quarter.
“For us, the plunge in oil coupled with the economic damage of Covid-19 marked the beginning of a global recession. Our research showed that at the beginning of the year, half of UK and US businesses predicted a recession and a third predicted an international global crisis, and just three months into 2020 and we’re starting to see this play out.”
Methodology
The survey
was conducted by Atomik Research among 706 senior decision makers at
medium-large sized businesses, across the UK, US, and Chinese markets. The
research fieldwork took place on the 18th – 28th November
2019. Atomik Research is an independent creative market research agency that
employs MRS-certified researchers and abides to MRS code.
About Stenn
Stenn
International Ltd. is a UK-based, non-bank trade finance provider specialising
in cross-border trade. Stenn’s trade finance solutions are comprehensive and
can be combined to cover the entire supply chain from purchase order to
delivery of goods. Innovative practices allow Stenn to finance in sectors and
geographic regions currently underserved in global trade. The company
operates globally with offices in Buenos Aires, Los Angeles, Dallas, New
York, Miami, London, Amsterdam, Dusseldorf, Berlin, Mumbai, Chennai, Singapore,
Hong Kong, Guangzhou, Hangzhou, Suzhou, Shanghai and Qingdao.
The outbreak of the
coronavirus disease, COVID-19 continues to pose a significant threat to
businesses in the UK. The impact on supply chains, transport and international
travel is causing businesses to consider the impact of coronavirus on their
current or future contractual agreements. Here Julie Hunter a
commercial solicitor at Stephensons Solicitors LLP, discusses why it’s
important for businesses to understand their legal rights and obligations in
light of this global pandemic.
The outbreak of the coronavirus disease COVID-19
continues to cause severe disruption and uncertainty to global trade. Now
categorised as a global pandemic by the World Health Organisation, businesses
must consider whether the impact of the coronavirus could cause them to default
on their contractual obligations, whether this may be an inability to supply
goods due to the effect on the supply chain, an inability to provide services
due to travel restrictions or the cancellation of planned public events due to
quarantine. Many larger businesses have already started to issue statements to
their customers and suppliers in advance of any potential disruption caused by
the outbreak.
Can your business delay performance or fail to
fulfil its obligations under a commercial contract due to the coronavirus
outbreak without facing liability? The often-standard force majeure clause
contained in commercial contracts may mitigate risks and help parties navigate
the difficulties caused by the outbreak.
What
is Force Majeure?
A force majeure clause may relieve a party from
performing its obligations under a commercial contract due to the occurrence of
events which are unforeseeable or outside of its control. You can only rely on
a force majeure clause if it has been drafted into your contract. A force
majeure clause cannot be implied.
As force majeure has no defined meaning in
English law, the effect of a force majeure clause will depend upon the way it
has been drafted into each individual contract. Typically, force majeure
clauses can cover:
acts of God, such as natural disasters and extreme weather events
terrorist attacks, civil war and breaking off diplomatic relations
compliance with a law or order, rule or direction of the government
embargos
epidemics or pandemics
Your force majeure clause may give you the right
to suspend performance of the contract for a certain period of time or allow
either you or your counterparty to terminate the contract entirely on the
occurrence of a force majeure event.
COVID-19
as a Force Majeure
On 11 March 2020, the World Health Organisation
classified the coronavirus as a global pandemic. If your force majeure clause
covers the occurrence of a pandemic, then the coronavirus outbreak is likely to
constitute a force majeure event.
If your force majeure clause does not cover
pandemics, you must carefully consider whether the outbreak or its effects
could fall into any of the other force majeure events specified in your
contract. For example, you may find it possible to argue that the quarantine or
isolation restrictions effecting your supply chain constitute a ‘work stoppage’,
or that any international travel restrictions imposed in the UK and other
countries which restrict performance could constitute ‘compliance with an order
of a government’.
The court often interprets the precise wording of
force majeure clauses strictly. If the situation is unclear, you should seek
specialist legal advice on whether the coronavirus would constitute a force
majeure event under your contract.
Invoking
the clause
Even if the coronavirus qualifies as a force
majeure event under your contract, you may not necessarily be able to invoke
your rights under the force majeure clause.
Most force majeure clauses require you to
demonstrate that the event itself has prevented performance of your contract.
This means that if the coronavirus outbreak is simply causing performance to be
more difficult, costly or time-consuming for your business, this may not
necessarily be enough to invoke the clause.
Additionally, it may not always be desirable to
invoke your force majeure clause for commercial reasons. You may need to
consider the following matters:
Is the force majeure clause / event open to interpretation? Your counterparty may dispute your entitlement to any force majeure remedies and seek to enforce performance of the contract.
Could your insurance policy cover any losses or business interruption instead?
Will other parties / business be facing similar problems with supply or performance? Could you negotiate new terms to navigate the issues?
Would exercising the force majeure clause damage your ongoing relationship with the counterparty? Is there a reputational risk if the matter became public?
Breach
of contract
It is possible that the effects of the outbreak
on your business may not be covered by the force majeure clause as drafted or
you may not have the option of relying on a force majeure contract at all.
If this is the case, any failure to perform your
obligations under the contract (even if the failure is attributable to the
coronavirus) may constitute a breach of contract which you could be liable to
the counterparty for. However, there may be other mechanisms in the contract or
under English contract law generally which may assist you and it is imperative
to obtain legal advice should you find yourself in this situation.
Seeking
a legal specialist
If you are currently considering entering into
new contracts or are reviewing your contracts in light of the coronavirus, you
should seek legal advice on strengthening your force majeure clause.
If you are currently facing threats of litigation over failed performance caused by the coronavirus or are considering invoking your force majeure clause, it is important to seek legal advice on your rights of termination and breach of contract.
About
Stephensons
Stephensons Solicitors LLP is a full-service law
firm with offices in Bolton, London, Manchester, St Helens and Wigan.
AMID all the uncertainty caused by the coronavirus outbreak business
owners may feel their fate isn’t in their own hands – but in fact there’s lots
that they can do to help them take control.
David Tew
“These are uncertain times. No-one knows exactly how this is going to play
out. But there are certain things you can do to protect your business,” said
David Tew, a dispute resolution specialist with Cartmell Shepherd Solicitors.
“A bit like the advice across society about taking sensible steps such as
washing your hands, there are steps you can take as a business to protect
yourself,” said David.
Here David shares half a dozen simple steps aimed at helping you and your business to be prepared and to focus on what you can control.
1. Check your ongoing contracts
“Check your contracts. What are your obligations and your rights?
“Will coronavirus allow a contracting party to pull out of its obligations
on an existing contract? It depends very much on what is the exact wording in
the contract.
“In particular you should be checking is there a force majeure clause in
your contracts which allows a party to suspend or terminate the performance of
its obligations when certain circumstances beyond their control arise.
“If there is not a force majeure clause then it is possible to look at the legal doctrine of ‘frustration’ where it is impossible to complete a contract because of a change of circumstances outside your control. But this is open to different interpretations and may be difficult to rely on, highlighting the importance of ensuring that your contracts are fit for purpose.”
2. Check your insurance policies
“Have a close look at your business insurance policy to see if you have any business interruption coverage and check exactly what those terms are.”
3. Carry out a risk assessment
“Carry out a general risk assessment on all parts of your business to identify exactly what is at risk, and then focus on controlling those areas which are within your control.”
4. Take practical steps
“So far much of the focus has been on the international aspect of
coronavirus. But that is set to move to a more domestic level and it is
important as a business owner that you do everything you can now to make sure
you, your employees, your supply chain and your clients are as prepared as
possible.
“If we are moving towards a situation where the advice will be for more
people to self-isolate, or if there are restrictions of movement, then there
are practical steps that you can take now to mitigate those risks.
“If you want to move to more remote working, then check the practical issues
that will involve. Do the business processes and procedures work remotely?
Check employee policies – do they cover working from home? Is it practical for
all employees to work from home? Do they have a safe environment to work in?
“Review your supply chain. Have a discussion with those in your supply chain and discuss action plans with them.”
“Identify ways you can work together. There will be cases where because of
the way a contract has been worded, it is within your legal right to ensure
that those obligations are met. But that might not be the best approach when it
comes to long-term business relationships.
“You are likely to want those relationships to be positive in the long term.
And while the temptation might be to jump on the specific wording in a
contract, remember that your clients and customers will still be here long
after this situation has come and gone. How you act now, is likely to affect
those business relationships in the future.
“By showing flexibility and understanding and being willing to restructure that arrangement in the short term, is likely to be of benefit in the long term.”
6. Ensure you have good legal advice
“A good solicitor will help you with your concerns and give you the advice
on how you can best protect your business. We have a six-strong team in dispute
resolution at Cartmell Shepherd led by director Mark Aspin. If you are unsure
about anything it is always best to ask.”
The Institute for Family Business (IFB) is calling on the Chancellor to use his Budget on Wednesday to create an environment that gives family businesses the confidence to invest in future growth.
Reports
that the Chancellor intends to review the Business Property Relief (BPR) in the
upcoming Budget, are deeply concerning to the UK’s family run businesses.
Family businesses employ over 13 million people and generate 28% of the UK’s
GDP. Family firms continue to exist for generation after generation by innovating,
adapting and looking for new markets and opportunities. They make investment
decisions for the long term.
Every
year 85,000 family SMEs are expected to transfer ownership of their businesses
to the next generation. Removing BPR would force family run firms to pay a tax
penalty on transfer, which others don’t have to.
Fiona
Graham from the Institute for Family Business said:
“Family
firms are the driving force across all regions, communities and sectors of the
UK. Well over 80% of businesses in Yorkshire, the North West and the East and
West Midlands are family owned. In those four regions alone family firms employ
nearly four and a half million people.
“Inheritance
tax relief is essential to their future prosperity. Scrapping it would
have a catastrophic impact on family firms. It would lead to family run
businesses being sold or broken up to pay an Inheritance Tax bill, with knock
on effects on employment. It will also damage confidence in the sector,
where families would reduce investment and always plan for the worst.
“The
introduction of BPR positively impacted the health of family businesses and the
wider economy by giving business owners the confidence to invest and expand.
“The
majority of British businesses are family businesses. They are dependent
upon BPR for their current and future prosperity. Any change to it would
inevitably result in a decline in growth and investment coupled with stagnation
in the number of new jobs being created.
“As the UK seeks to level up nationally in the coming years, the success of family businesses will be a crucial factor in doing so. In order to succeed and grow, they require a stable tax system and an economic environment. The future of the family business sector – and ultimately the Government’s ambitions for regional growth and investment – rely on maintaining BPR.”
The Institute for Family Business is the UK’s family business organisation, supporting and promoting the UK family-owned business sector through events, networking, representation, and thought leadership.
Two-thirds of British businesses are family businesses – ranging from multinational, multibillion-pound businesses to micro start-ups, the sector employs over 13 million people and contributes £182 billion in taxes.
The Amos Rex Art Museum in Helsinki has won the prestigious LCD (Leading Culture Destination) Award for New Cultural Destination of the Year – Europe. The awards, coined “the Oscars for Museums” by the international press, were presented at the annual LCD awards ceremony in Berlin on 4 March 2020.
Since
opening in August 2018, the Amos Rex Art Museum has made a big impact
on the cultural scene in Helsinki, attracting over half a million visitors
during its first year. Amos Rex is an art museum where the past, present
and future meet. The iconic functionalist Lasipalatsi building (i.e. Glass
Palace) and the new gallery spaces under its undulating square, provide 10 000
m2 for unique experiences both below and above ground, as well
as on the silver screen of Bio Rex. Amos Rex’s exhibition programme
extends from the newest, often experimental, contemporary art to 20th-century
modernism and ancient cultures. The new museum space was designed by
Finnish architecture office JKMM.
“We
are extremely honoured at Amos Rex to receive the LCD Award for New Cultural
Destination of the Year in Europe. It is a significant award for us, as we
aim to serve the international public as an art museum, architectural
attraction and urban meeting place. We are delighted to see how Amos Rex is
contributing to Helsinki’s appeal as a cultural city in Europe”, says Kai
Kartio, Museum Director of Amos Rex.
Helsinki – a thriving city
of arts and culture
Feeding
its lively cultural scene, Helsinki continues to position the culture
amongst its core values, building on its reputation as an art, design and
architecture capital. With residents visiting cultural institutions more than
ever before, ambitious initiatives such as the 2018 Amos Rex Art Museum and Oodi
Central Library openings demonstrate the city’s forward-looking commitment to
creativity.
Championing
local contemporary art and its relationship with the global community, the
eagerly anticipated Helsinki Biennial 2020 draws on Helsinki’s distinct characteristics
and the surrounding archipelago, offering a unique contribution to the
international art scene.
“Helsinki
believes in culture. The city is a diversified and internationally attractive
city of arts and culture, with Amos Rex as one of the leading attractions.
Working together with cultural institutions such as Amos Rex, the new central
library Oodi and the upcoming international art event Helsinki Biennial, we are
further strengthening Helsinki’s position as a must-visit city of culture”, continues Laura Aalto, CEO
of Helsinki Marketing.
Helsinki
Marketing Laura Aalto, CEO +358 40 507 9660 [email protected]
Helsinki
Marketing is a company owned by the City of Helsinki. It is responsible
for operative city marketing and business partnerships for Helsinki. Helsinki
Marketing interacts with local residents, visitors, decision-makers and
experts.
Innovative lending services,
such as crowd and P2P marketplace loans, are becoming increasingly popular in
many European countries. With the development of financial technology, recent
years have witnessed a growing number of business customers and private
borrowers using these digital financial services.
According to data gathered by Finanso.se,
the European fintech, or the alternative loans industry, is expected to hit a
$9.6bn transaction value this year, growing by 10% year-on-year.
Crowdlending Generates Nearly 70% of Total Market
Transaction Value
After the financial crisis, many
traditional banks became very restrictive in approving loans, especially in
some European countries, leaving businesses and individual consumers with no
access to much-needed cash. This created space for lending platforms, which
connected borrowers directly to lenders, and removed the banks from the
equation.
Lending platforms use
sophisticated computer algorithms to make lending decisions, provide fast
loans, and lower rates to borrowers. Investors, on the other hand, are given
the ability to easily invest in loans outside of their countries at attractive
returns.
In 2017, the European fintech
lending market hit $6.3bn value, revealed the Statista Alternative Lending
Market Outlook. By the end of 2018, the market value increased by 20% and
reached $7.5bn worth. The rising trend continued in the next twelve months with
the entire market reaching $8.7bn value. The statistics indicate European
fintech lending industry is expected to show an annual growth rate of 3.0%
between 2020 and 2023, resulting in $10.5bn transaction value in the next three
years.
The market’s largest segment is
crowdlending or peer-to-peer business lending. In 2017, European peer-to-peer
loans in the business sector reached $3.6bn worth. Over the last three years,
the market value of the crowdlending loans increased by more than 75% and hit
$6.5bn transaction value in 2020. Statistics show this amount will grow to
nearly $7.2bn in the next three years.
Consumer peer-to-peer loans are
forecast to edge up to $3.1bn value in 2020, twice less than business lending.
Number of European Fintech Loans to Reach 1.3 Million by
2023
Although peer-to-peer business
loans represent the leading market segment, the statistics indicate a much
higher number of consumer peer-to-peer loans in Europe. In 2017, there were
more than 911,000 successfully funded alternative loans in the consumer
segment.
Business peer-to-peer loans reached
over 63,000, or 14 times less compared to consumer loans. In the last three
years, consumer and business alternative loans rose to 1 million and 75,900,
respectively. The average funding per loan in the crowdlending segment is
expected to reach $86,185 this year. Statista survey indicates the total number
of European fintech loans will amount to over 1.3 million by 2023.
Compared by geography, the
United Kingdom represents the leading European fintech lending market, and the
third-largest fintech lending market globally. According to statistics, the
total value of UK fintech loans is expected to peak at a value of $4.8bn this
year.
Switzerland ranked as the
second-largest market in Europe with $1.4bn worth transactions in 2020, growing
by remarkable 27.4% year-on-year. With a $796 million transaction value in
2020, Italy ranked as the third-largest fintech lending market in Europe.
However, besides Switzerland,
Denmark and Spain are expected to see the highest growth rates in the following
years, rising by 23.7% and 22.9% respectively year-on-year.
There are countless books claiming to elucidate
exactingly how to invest over the long-term. However, ask any seasoned trader
what the secret is to an effective investment strategy and you’ll quickly find there
is no one tactic or panacea for consistent growth.
Instead, what most traders rely on is an informed and
reactive understanding of both current affairs and unfolding market trends to
help inform their investment decisions. By letting this understanding
dynamically inform one’s portfolio, they are able to confidently react to
sudden market shocks.
Investors must therefore have one eye on the present and
one eye on the future, and understand how different social, political,
geographical and economic events could impact their portfolio. This
understanding must be informed by an awareness of how past events have affected
the prices of different assets. Thankfully, there are plenty of useful ways
that investors can prep for the future.
Markets are all about cause and effect
The fundamental operation of the financial market is one
of cause and effect; one event or price movement will inevitably affect the
prices of other assets. Whilst this is a simple enough concept, big political
and social events often trigger a multiplicity of effects, which can in turn
impact on one another.
For example, the recent outbreak of coronavirus is having
a major impact on global supply chains; China’s productivity has been
negatively affected, which has had a flow-on effect on major businesses that
rely on China as part of its supply chain.
In terms of market volatility, there is a huge amount of
historical evidence which shows how the coronavirus could impact asset prices.
One central theme is likely to be the increase of value in ‘hard commodities’ —
physical investments like gold, steel and oil. That is because these so-called
safe haven assets are perceived as having global appeal and consistent demand,
and therefore offer greater resilience in times of volatile trading conditions.
Never overlook the advantages of an informed strategy
I doubt you could find many long-term traders who have
not woken up one morning to see that there has been a dip in the value of their
investments as a result of an unforeseen geopolitical event. For those who find
themselves in this situation, it can be easy to panic and make uninformed
decisions. This is the entirely wrong approach to take.
By its very nature, finance is an unpredictable sphere of
work, and unexpected shocks are par for the course. That’s why the strongest
financial plans tend to include or account for the unforeseen. When prices dip
or there is a sudden market shock, it has been for the most past accounted for
and leaves little room for sudden trades that are informed by the heart, not
the mind.
Remember to diversify (within limit)
Another way of
managing market volatility is ensuring your portfolio is diverse, with
investments spread across multiple markets. Doing so reduces your portfolio’s
risk of suffering significant loses should one particular market or sector be
adversely affected by an unexpected event. However, the key to diversification
is not to cast your net too wide.
The broad points that need internalising here can be
surmised very briefly: knowledge is power.
Mastering the complex nature of different financial
markets is not simply about watching the fluctuating prices of assets. It’s
also about understanding the historical performance of different markets,
analysing previous trends and using all this as a guide to manage your
investments during sudden political and economic shocks.
What’s more, any investment decision or trade needs to be
part of a bigger strategy with goals, returns and risk exposure all clearly
defined. Doing this ensures that investors and traders are in the position to
stay on top of their financial portfolio.
High Risk Investment
Warning: CFDs are complex instruments and come with a high risk of losing money
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Giles Coghlan is Chief Currency Analyst at HYCM – an online provider of
forex and Contracts for Difference (CFDs) trading services for both retail and
institutional traders. HYCM is regulated by the internationally recognized
financial regulator FCA. HYCM is backed by the Henyep Capital Markets Group established
in 1977 with investments in property, financial services, charity, and
education. The Group via its relevant subsidiaries have representations in Hong
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The worst global
market sell-off since the 2008 crash will become an important
buying-opportunity for investors, affirms the chief executive of one of the
world’s largest independent financial advisory and services organisations.
The prediction by
Nigel Green, CEO and founder of deVere Group, comes after equities lost a tenth
of their value this week as investors piled into havens on growing concerns the
coronavirus outbreak will hit the world economy and impact corporate profits.
Mr Green notes:
“Until this week, the markets had largely shrugged off the impact of the
outbreak of coronavirus. We warned about complacency leaving many
wide-open to nasty surprises.
“This has now
changed. Investors have done a ‘one eighty’ – from a muted overly confident
reaction to the serious and far-reaching global issue of coronavirus to running
like headless chickens.
“Both extremes
are worrying and could potentially wreak havoc on investors’ returns.”
He continues: “However,
the worst global market sell-off since the 2008 crash will almost certainly
become an important buying-opportunity for many investors.
“With markets on
the brink of correction territory, panic-selling, mis-pricing of high quality
equities, and lower entry points, this could turn out to be one of the key
buying opportunities in the last 10 years.
“Some of the most
successful investors will embrace volatility to create, maximise and protect
their wealth.
“As ever in times
of increased turbulence, there will be winners and losers. A professional fund
manager will help investors take advantage of the opportunities that volatility
presents and mitigate potential risks.
Earlier this
week, Mr Green noted: “In the current volatile environment, investors – including
myself – will be revising their portfolios and drip-feeding new money into the
market to take advantage of the opportunities whilst reducing risk at the same
time.”
The deVere CEO
concludes: “Global investors should not be spooked by the return of volatility
on stock markets but, where possible use it to their financial
advantage.
“Of course,
no–one knows for sure what will happen in the immediate future but, as stock
markets typically rise over a longer-term period, now is the time to capitalise
on the more favourable prices of decent stocks.
“It can be
expected that in coming days, serious investors will be bargain-hunting.”
