Archive for February, 2010

BlackRock sees lucrative opportunities emerging in the mining sector, in the days to come. The global investment management firm has urged investors to look out for more mergers and purchases in the sector, over the course of the coming year.

BlackRock stated that with commodity prices at levels higher than what most management teams had expected, there is a possibility of surplus cash being generated.

The manager of BlackRock World Mining Trust, Evy Hambro explained that the excess cash would possibly prompt companies to invest into readily available projects than indulge in capacity building.

Hambro detailed that figures for January show a sharp reduction in the prices for base metals and precious metals as against that the levels that existed in the end of 2009. Hambro believes that this reduction in prices have made the valuations more attractive, and created opportunities for market entry. He added that while the short term instability in the metals sector is expected to prevail, commodity selection and stock selection will continue to be the factors critical to optimising the opportunities offered by the sector.

A twelve-monthly increase of 9.2% but a price dip of 1% against January has been indicated in the February numbers for the UK housing market. This fall in prices, the first since April 2009, were possibly triggered off by the cold weather and the termination of stamp duty concession in December. The above two factors seem to have weaned off many house buyers.

Despite the annual growth pattern being displayed by the UK property sector, apprehensions are being raised that the impetus might be waning. An improvement in the UK economy as a whole and better liquidity seem like the only solutions to the constantly sliding property rates. Since they can have far-reaching effects on the personal, business and investment markets in the short to medium term, a plunge in property rates is generally not desirable. What remains to be seen, is whether this decrease in the rates is just a temporary jinx or the start of a new trend for the UK property sector.

Jones Lang LaSalle (JLL) has forecasted that declining supply and not increasing demand will contribute to the resurrection of the regional office leasing markets outside London.

The new report from JLL’s ‘Office Market Conditions Across the UK’ expects shortages by 2012, owing to constricted supplies, thus reducing downward stress on rents.

Markets will recover in the same order in which they were affected. So, while markets like Birmingham which slumped first has already recovered, those like Edinburgh and Leeds will take time.

The Director of Agency and Development, JLL’s Edinburgh office, Cameron Stott stated that deals subject to covenants, lease lengths and the landlord’s financial position induce varying incentive levels. He revealed that prime rents had fallen significantly in Glasgow and Edinburgh in the final quarter. These markets are, however, seeing periods of consolidation now.

Head of JLL’s national offices team, England, James Finnis said that the public sector had supported the UK take-up outside London in 2009. However, as government looks at cutting costs, it is doubtful whether this trend will continue.

The Greek economic crisis that has emerged from the Eurozone and which has affected countries such as Spain and Portugal now seems to be threatening the UK economy. The Governor of the Bank of England, Mervyn King stated that the recessionary state within the Eurozone will reduce UK trade within Europe and eventually push the country into economic slump.

Such negative statements have resulted in a lacklustre performance by both the sterling and the euro. Since the European Union’s huge growth rate over the last few years, this is first time that a major economic crisis has besieged the European markets. With the EU member states reluctant to pledge economic assistance to the Greek government until budget reductions have been approved, the downturn is testing both EU’s confidence and mettle.

While it has had little impact on European markets until now, the issue could have far more adverse consequences on the UK and other European stock markets if not attended to in the short to medium term.

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A cleaning up process carried out by the Financial Services Authority (FSA) has resulted in partial refunding of investors who were deceived into parting with cash worth thousands of pounds.

Innocent investors were hounded by a string of cold calls from people who claimed to work for stockbrokers Rothman Capital, Bernam Shore, Bishop Capital and Investor Relations Corp. These credulous investors were asked to purchase shares in a company by the name Eduvest plc, with an assurance of considerable returns after depositing their payments into a UK bank account. The shares, however, turned out to be valueless.

Since the incident first cropped up, the FSA has, to date, recovered around £270,000, after charging the deceitful companies with share fraud. The organisation added that the matter was still being investigated.

Margaret Coles, Director of Enforcement and Financial Crime, FSA, expressed satisfaction over being able to help some of the distressed investors. She added that such recoveries are not common news for victims who contract with unlawful firms.