CFI.co Blog - Page 36 of 47 - Business, Finance, Economics

Europe is a global economic nexus, an incredibly stable and developed market.

Its heart is EU, which operates as a single market of 28 different states and 500 million customers. Technology and innovation are driving forces behind slow but steady growth.

This upward trajectory instils confidence when it comes to investment prospects. Many lucrative opportunities are just a few clicks away. You can pursue them without running into risks that emerging markets are rife with.

Alas, launching an international investment endeavour is a daunting task. You have to do your homework and tailor the investing strategy to specifics of the landscape.

Here is a guide on how to establish a strong foothold and enhance your portfolio.

Doing the Spadework

The European market is a mature, diverse, and liquid ecosystem.

The investment risk is low, save in times of crisis. Europe is also a highly dynamic and competitive investment arena, home to leading companies of today.

Yes, it’s easily one of the most inviting investing destinations. However, succeeding is easier said than done. To maximise your chances, you have to show due diligence.

Start by running a proper market analysis and scour the continent to discover where the best opportunities are. Evaluate your risk tolerance and put a risk management strategy in place. Two main weapons for chipping away at risk are market knowledge and portfolio diversification.

We would implore you to pay special attention to the currency risk. We’re talking about fluctuations in the foreign exchange market. They can be a double-edged sword, spurring both unexpected losses and profits.

Once research tasks are sorted out, set your chief objectives. Do you want to go for foreign direct investment (FDI) or portfolio investment? Is your goal to have a small portion of shares, source raw materials or control a whole company?

Get your priorities straight before moving to the next stage.

The Main Pathways to Investment Glory

One of the easiest ways to gain exposure is thru exchange-traded funds (ETFs).

The three main options are:

Broad European ETFs
Regional European ETFs
Country-Specific European ETFs

They offer simple means of portfolio diversification, unlike the US, which is a predominantly stock-based market. It’s possible to invest in hundreds of different companies, as well as specific industries/countries. At the same time, you can avoid the steep fees associated with mutual funds.

Familiarity is another benefit you can score. Europe harbours some of the most renowned names in modern business.

There is also an alternative approach, which is two-fold. The first tactic is buying American Depository Receipts (ADRs). The second one is acquiring stocks via foreign stock brokers.

The drawback is you have to worry about legal and tax issues. You also face hurdles such as translating foreign languages and currencies. On top of that, it can be tricky to conduct in-depth research on foreign stocks.

Note that ADRs are free of these risks. Unfortunately, they are limited to large foreign corporations that boast liquidity in spades.

The Million Dollar Question of Where

It makes a lot of sense to examine investing opportunities thru regional lenses.

Eastern Europe is an interesting region due to the potential for rapid growth. Investors comfortable with higher risks head there chasing hefty profit margins.

On the other hand, one enters Western European markets for reasons other than explosive growth. Namely, those who favour a climate with low volatility should feel at home here.

Germany is probably a must-consider, as the largest economy of Europe. It houses many of the top-500 publically traded companies in the world. County’s biggest companies (by market capitalisation) are available via the DAX 30 index, which is similar to the Dow Jones index in the US.

In terms of other, small economies, there are certain rules of thumb. You want to pay close attention to conditions like domestic policies and international agreements. These are the main tools countries employ in order to attract foreign investment.

Apart from that, it’s a good idea to stick to predictable and transparent markets. EU member states have an advantage in this regard. Common institutions handle and synchronise investment rules, including areas like dispute resolution.

The Old-School Way

Beyond that, you should feel free to invest in asset classes such as property.

The yields tend to be higher than in the case of bonds. This trend persists across different regions and states. What is more, the returns are often adjusted up for inflation.

This is to say real estate investment can act as a blanket insulating you from monetary risk. Besides, the spectrum of possibilities is very wide. You can aim for steady cash flow or speculative profit.

One piece of advice is to keep an eye on hot local markets such as Amsterdam. There, a combination of limited supply, demographic influx, and scarce land inflates prices year after year.

Finally, we shouldn’t overlook the commodities.

This traditional asset class involves minerals, fossil fuels, ores, crops, and trees. Propelled by global economic growth, the consumption and demand remain stable, while supply is finite.

Again, one of the main benefits is protection against inflation. Of course, commodities also come with risks such as price volatility. Just take the example of gold, which has been on a rollercoaster in recent years.

The lesson to draw is clear: be ever vigilant and be advised.

Investing Strategy for Europe: Taking Portfolio to the Next Level

The world’s largest regional economy is a Promised Land for many investors.

However, that doesn’t mean profits are just there for the taking. You need to put together a smart investing strategy before anything else. Rely on facts and figures to make it as sound as the Euro.

Likewise, make sure to assess your risk tolerance and financial appetites. Pick your region and industry sector accordingly. Identify up-and-coming companies and business champions with a bright future.

You can hardly go wrong fuelling your investments via European ETFs.

Just stay quick on your feet and steer away from pitfalls in the shifting monetary dimension. Keep up the pace with changing regulations and standards. Following these steps, you should be able to make headways into burgeoning European markets.

Don’t hesitate to contact us with any lingering questions and dilemmas. It’s time to elevate and diversify your portfolio.

Business

Half of UK & US firms predict a recession in 2020 and a third predict a global recession

ByCFI.co Blogger

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 18^th – 28^th 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.

Learn more at https://stenn.com or follow Twitter, LinkedIn and Facebook.

Business

Coronavirus: Is your business immune?

ByCFI.co Blogger

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.

Coronavirus: Is your business immune? — **Julie Hunter**

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.

Banking

The Ultimate Guide to British Taxes

ByCFI.co

The United Kingdom has a long list of tax codes, so it might seem confusing. However, British taxes are relatively simple for many people.

Unless you have a slew of properties and investments, you don’t have to know a lot to pay your taxes. All you need to know is how you earn money and how much, and you can determine what taxes you need to pay.

Basics of British Taxes

If you live in the United Kingdom, you should have a basic understanding of British taxes. Whether you grew up in the UK or an ex-pat living abroad, you need to know what taxes to pay and how to pay them.

In the UK, there is a long list of tax codes, so it can be complicated. However, you don’t need to understand everything, only what applies to you and your situation.

You don’t need to be a UK citizen to pay taxes, but you will need a national insurance number. You’ll typically get a number when you work in the UK, and this gives you access to certain benefits.

Residency and British Taxes

Whether you’re a citizen or not, you may still have to pay British taxes. If you live in the country during a tax year, you’ll have to pay taxes on the income you earn there.

Only UK citizens have to pay British taxes on income from other countries. Citizens of other countries may be eligible for a tax allowance, which prevents you from paying taxes on income to two different countries.

There are a few factors you can use to determine your residency status.

If you stay in the UK for 183 days out of the year, you will count as a UK resident.
You can also count as a resident if you buy a home and live in it for at least 91 days, as long as 30 of those days are within the tax year.
Another way to be considered a resident is to work in the UK for 356 days with no long breaks from work.

Determining your residency can help you figure out what taxes you need to pay and whether you qualify for certain allowances. However, you have to consider the UK tax year when calculating dates of work or residency.

The UK Tax Year

In the UK, the tax year starts on 6 April. The UK tax year ends on 5 April of the following year.

While it can be easy to consider the calendar year, it can be a problem. If you fit the qualifications for residency, you need to make sure you base that off the tax year.

The same is true if you don’t want to qualify as a UK resident. In that case, you would need to make sure you’re out of the country for the proper length of time.

What Taxes Do You Have to Pay?

When learning about British taxes, you should understand the basic types of taxes. Like other countries, you will probably have to pay income taxes.

However, depending on your situation, you may have a few other types of taxes to consider.

Income Taxes

Income taxes are the easiest type of tax to think about. The amount of income you earn determines how much you owe in taxes.

Your income taxes include money you make from a traditional job. However, it can also include income from other sources:

Self-employment income
Certain state benefits
Benefits from a job
Pensions
Interest on savings accounts
Rental income
Income from a trust

You will typically get some sort of tax allowance, which means you won’t have to pay taxes on some of your income. The Personal Allowance covers income you earn up to £12,500.

If you have freelance income or income from a rental property, you won’t have to pay taxes on the first £1,000 you earn. The tax rates for income tax vary from 0 to 45 percent.

Property Taxes

If you own any property in the UK, you will need to pay taxes on that property. When you buy a home worth more than £125,000, you’ll need to pay a Stamp Duty Land Tax (SDLT).

However, you won’t have to pay SDLT on your first home unless it’s worth more than £300,000.

SDLT has different tiers, and that can determine the amount you’ll pay in property taxes. If you have to pay taxes, you will need to figure out the value of your home.

For houses up to £125,000, you won’t ever pay any taxes.
Between £125,000 and £250,000, you’ll pay 2 percent.
The tax rate from £250,000 to £925,000 is 5 percent.
If your home is up to £1.5 million, you will pay 10 percent on the value over £925,000.
Finally, any value over £1.5 million will have a tax of 12 percent.

While you may not need to pay proper taxes at first, you may need to in the future.

Capital Gains Taxes

Another type of tax you should know about in the UK is the capital gains tax. You’ll only need to pay this type of tax when you dispose of an asset, especially when you make a profit.

You can expect to pay this tax if you sell property, give it as a gift, or exchange it. The tax applies to possessions worth more than £6,000, except for your car.

It also includes property that isn’t your main home, business assets, and some investment shares.

Inheritance Taxes

Inheritance taxes are not too common, but you should know about them if you have family in the UK. When you inherit an estate, you may need to pay a UK inheritance tax.

If the value of the estate is less than £325,000, you won’t have to pay anything. You can also avoid the tax if you leave the value over that threshold to your spouse, children, or a qualifying organization.

VAT

A more common type of tax to pay in the UK is VAT, or Value Added Tax. The tax rate varies based on the type of goods or services you purchase.

It can be as low as 0 percent or as high as 20 percent. Twenty percent is the standard rate, while food and children’s clothes can qualify for no VAT.

Other goods and services might have a reduced rate of five percent. Don’t forget to budget for VAT when making purchases.

Tax Facts

Whether you’ve lived in the UK your whole life or just moved there, you should understand how British taxes work. Not only should you consider the tax rates, but you should also consider the types of taxes.

If you know you have certain investments or properties, you’ll know you need to pay taxes on them. However, if you don’t have any of that, you will primarily have to worry about income taxes.

Do you want to learn more about finances in the UK, check out our recent blog posts!

Business

Business owners urged to take six steps to limit coronavirus risk to their operations

ByCFI.co Blogger

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.

Business owners urged to take six steps to limit coronavirus — 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.”

5. Keep communicating

“It is really important to keep communication channels open between you, your employees, your clients and your supply chain. Keep talking and discussing how you can support each other. Follow any guidance online https://www.gov.uk/guidance/coronavirus-covid-19-information-for-the-public

“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.”

Business

Chancellor Must Use Budget to Give Family Businesses Confidence to Invest in the Future – Starting with Maintaining BPR

ByCFI.co Blogger

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.

Finance

A Beginner’s Guide to Investing in Foreign Currency

ByCFI.co

More than $5 trillion is traded in foreign currency exchanges every day. Could you jump into investing in foreign currency and get a piece of that amount?

Absolutely! However, trading foreign currency is not as simple as it might sound. A beginner who tries to invest without some knowledge of what they’re doing will find success hard to come by.

There are many insider things to learn about this form of trading. If you’re considering getting into the game, we want to make sure you’re equipped to do so.

In this article, we’re laying out the basics of investing in foreign currency. We’re giving you the terms and the concepts so that you have what you need on hand before you pull the trigger on your first trade.

What is Forex?

Forex is the term used for trading in foreign currency. It is also the Foreign Exchange Market where currencies are traded. Forex is managed by banks and financial institutions rather than a centralized exchange like the Nasdaq.

Forex is, at its simplest, the buying and/or selling of two currencies. It uses the value of one currency against another to determine prices for buying and selling.

The exchange rate is the rate at which your trade will occur. The exchange rate is the value of one country’s currency against another. It is shown as a ratio, so, for example, 1 Euro might be worth 1.68 US Dollars.

Which Currencies Can You Trade?

Investing in foreign currency is always done in pairs. Pairs of currencies are represented by 2 three-letter codes put together. The codes are for each currency in the pair.

For example, EURUSD is a pairing of Euros and US Dollars. The first currency is the base and the second is the quote.

Pairings of currencies come in 3 categories. The categories are major, minor, and exotics.

Major Pairings

Major pairings are a combination of two of the major currencies of the world. The major currencies are:

US Dollars (USD)
Euro (EUR)
Japanese Yen (JPY)
British Pound Sterling (GBP)
Swiss Franc (CHF)
Canadian Dollar (CAD)
Australian Dollar (AUD)
New Zealand Dollar (NZD)

When beginners start investing in foreign currency major pairings draw their attention because they fluctuate more and more often.

Minor Pairings

Minor pairings feature one or more of the major pairing currencies but never the US Dollar.

Exotics

Exotics combine a heavily traded (usually a major currency) with a lightly traded currency. For example, you might combine the US Dollar with the Brazilian Real for a minor pairing.

Keys to Investing in Foreign Currency

When you are starting your journey into investing in foreign currency you need to be aware of terms, how to buy and sell, and what you can expect from your trade.

Buying Foreign Currency

When you want to buy foreign currency you are buying the base currency and selling the quote currency in the pairing you have chosen. So, if you want to buy US Dollars and sell British pounds you will have a pairing of USDGBP.

If you are buying currency you want the value of your pairing to rise. You can then sell it later if it falls to make a profit.

Selling Foreign Currency

The opposite is true if you are selling currency. In that scenario, you will still have a pairing of USDGBP but you will be selling the base currency and buying the quote currency.

When selling currency you want the pairing to fall in value. That way you can buy it back later if it rises in value.

Liquidity

Liquidity is the amount of demand for any given currency. Liquid currencies are bought and sold more frequently. The more liquid a pairing is the more likely you will be able to buy and sell at a profit.

Major pairs are usually more liquid than minor or exotic pairs. This is because there is more international trading of major pairs and more demand for the base and quote currencies.

Liquidity is measured in pips. Pips represent 0.0001 of the quoted price for the pair. If a pair has a quoted price of 1.57789 and moves to 1.57790 that is a change of 1 pip.

Pairings with more liquidity will typically have changes of around 100 pips a day. Pairings with less liquidity have changes of 50 pips or lower a day.

Bid and Ask

The terms “bid” and “ask” are also important to understand when investing in foreign currency.

The bid is what a broker will pay you for a pairing. The ask is what the broker will want you to pay for a pair.

The difference between the two numbers is called the spread. So, if the bid is, say 1.5111 and the ask is 1.5115 the spread is 0.0004, or 4 pips. In order to make a profit from a buying trade, you’ll need the pair to cross the spread above 1.5115.

Study So That You Know All About Investing in Foreign Currency

Forex trading is tricky. Spend time learning about the pairings. Investigate trends and spreads, and look at how liquid a pairing is before you jump in.

Because pairs of currencies don’t move a lot, up or down, investing in foreign currency does not result in huge gains or losses for beginners.

The language and terms can be confusing. It’s an insider’s lingo. Make sure you know what all the things in this article refer to.

At the same time, Forex trading can be fun and rewarding.

If you’d like advice on how to get started with your first Forex trades get in touch with us. We understand the foreign currency markets, and we have a wealth of knowledge to help you make the best choices on pairings and trades. We look forward to helping you.

Lifestyle

Amos Rex in Helsinki awarded New Cultural Destination of the Year in Europe at LCD Berlin Awards

ByCFI.co Blogger

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.

Amos Rex in Helsinki awarded New Cultural Destination of the Year in Europe at LCD Berlin Awards

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.

For more information, please contact:

Amos Rex
Iia Palovaara, Communications Officer
+358 50 544 3331
[email protected]

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.

Corporate Finance

European FinTech Lending Industry to Hit $9.6bn Value This Year

ByCFI.co Blogger

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.

Read the full story here: https://finanso.se/european-fintech-lending-industry-to-hit-9-6bn-value-this-year/

Finance

What’s the secret to trading on the financial markets?

ByCFI.co Blogger

Giles Coghlan, chief currency analyst at HYCM

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 rapidly due to leverage. 67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. For more information please refer to HYCM’s Risk Disclosure.

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 Kong, United Kingdom, Dubai, and Cyprus.