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GLOBAL AMERICAN EXPRESS/CFO SURVEY REVEALS A RETURN TO PROSPERITY IS FINALLY ON THE HORIZON FOR UK PLC

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Brendan Walsh

2014 sees a surge in economic optimism amongst UK CFOs with 93% anticipating modest to substantial expansion this year, up from just 50% in 2013

After years trailing behind their international counterparts in anticipating growth, UK CFOs are now amongst the most ebullient about economic prospects in 2014, according to the latest American Express/CFO Research Global Business and Spending Monitor.  This marked reversal of fortunes sees UK CFOs sharing their optimistic high with India (86%) and Mexico (86%). Across Europe, the vast majority of CFOs (68%) are echoing the sentiment that 2014 is a time for expansion, though they are not quite as upbeat as their UK counterparts. In Germany, which has traditionally been Europe’s lone beacon of economic prosperity, 74% anticipate modest or substantial economic expansion to take place over the next twelve months, followed by 69% in Spain and 62% in France.

The findings in the seventh annual American Express/CFO Research Global Business and Spending Monitor are based ona sampling of senior finance executives based in Europe, North America, Latin America, and Asia.

Steady as she goes

While GDP growth, rising employment, and low interest rates have contributed towards this significant shift in the economic outlook amongst the UK’s financial community, caution clearly prevails as the survey reveals that this economic optimism has not translated into an aggressive spending agenda. In spite of the economic prosperity, three times as many CFOs(30%) in the UK plan to tightly control spending and investment  as those(10%) who say they have aggressive spending and investment plans in place.

Furthermore, when it comes to hiring people it looks like Britain is set to retain the thrift culture adopted during the downturn for some while longer; just 30% of UK CFOs plan to spend more on headcount this year, while 37% will spend less.

However, while UK CFOs are following a relatively conservative spending agenda compared to their global counterparts, they still show significant appetite for making investments to drive longer term growth, specifically focusing on customer acquisition and retention. Heading the list for increased spending by UK CFOs in the next year are:

  • Entering New Markets
  • Business Transformation and Innovation
  • Better Meeting customer Needs
  • Remaining Competitive with Other Companies

CFOs are displaying a smart approach in navigating through the upturn in the economy. They are taking nothing for granted and are applying a rigorous approach to their spending plans, laying a strong pipeline for sustainable expansion now and in the future” said Brendan Walsh, Executive Vice President, American Express Global Corporate Payments.

On The Road

Despite advances in technology and interactive meeting solutions, most business people believe that nothing beats a face-to-face meeting when it comes to getting business done. But now it seems, even finance executives, traditionally keen to decrease discretionary item expenditure, are identifying business travel as a catalyst for growth.

Brendan Walsh

Brendan Walsh

This year’s study predicts the most widespread increases in spending on business travel since 2008, as compa­nies work to carry out their growth plans, with almost half of the UK respondents (46%) stating they plan to spend more on business travel this year, and 93% agreeing with the sentiment that business travel spending was important or critical to their company’s success in the coming year. This is perhaps unsurprising when you consider that Asia, Russia and Europe form the three main regions for expansion priorities of UK companies in the year ahead.

Globally and in the UK, CFOs see further opportunities for achieving costs savings on travel, which typically form a company’s third largest controllable expense after employment costs and technology. To reduce costs, CFO’s cite the following areas where they feel they could truly optimise their travel expenditure:

  • Strengthening partnership programs with travel service providers
  • Reduce the cost of travel
  • Improving control of travel expenses

Numbers up

The research also identifies how the economic climate has reshaped the finance function within companies, changing its role from financial expert to that of strategic business advisor. Some 78% of respondents agreed with the premise that the financial perspective was either an influential factor or the determining factor when it comes to an organisation’s strategic and operational decisions. Furthermore, financial acumen is a skill that is deemed to be critical for all management, reflecting a more balanced approach to business building post the recession, with 71% of CFOs in the UK believing that their organisation’s management now have a good understanding of the financial impact of the decisions they make.

“UK companies are well placed to leverage both domestic and overseas opportunities,” continued Brendan Walsh of American Express. “Cost will be a determining factor and we can expect companies to place a higher premium on value as they plot their growth trajectories in the future.”

 

Investing

What is the procedure for proving a missing or lost Will?

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Intermediaries will be key to Investment Houses navigating the Covid19 crisis

By Alexa Payet, Partner at Bolt Burdon and listed specialist in the Certainty

Contentious Probate Hub & Area

Initial steps

When an individual dies it is necessary to search their paperwork to establish whether they made a Will and gather information regarding their estate. This is important because the personal representatives of the estate have a legal duty to distribute the estate correctly and could be held financially responsible for any mistakes made through any breach of duty.

Where a Will cannot be found but is believed to exist there are a number of steps that can be taken to help confirm its existence, including (but not limited to) the following:

  • making enquiries of the deceased’s family and friends;
  • making enquiries with the deceased’s professional advisors;
  • instructing The National Will Register to undertake a Certainty Will Search.

Presumption of revocation

Where the original Will is known to have been in the testator’s possession before their death and cannot be located afterwards, there is a rebuttable presumption that the Will was destroyed by the testator with the intention of revoking it. If an order for the proof of a copy is to be obtained then this presumption must be rebutted.

Procedure for proving a copy Will

The procedure for proving a copy Will is set out in Rule 54 of the Non-Contentious Probate Rules 1987 (‘NCPR’).

The application is made to the Probate Registry at which the application for the grant will be made and the order can be made by a district judge or registrar.

The application must be supported by evidence in the form of an affidavit (although during the global pandemic the rules have been amended by the Non-Contentious Probate (Amendment) Rules 2020, SI 2020/1059, to provide for the use of witness statements as an alternative to affidavits).

The evidence must set out the grounds of the application and any available evidence that the applicant can adduce as to the Will’s existence after the death of the testator or, where there is no such evidence, the facts on which the applicant relies to rebut the presumption that the Will was destroyed by the testator during his/her life.

The applicant must ensure that the Court has the best available evidence of what happened to the testator’s Will in order that effect may be given to his/her testamentary wishes.

It is important to understand that the applicant does not need to demonstrate that the Will has been lost (it is the fact of its loss which gives rise to the presumption of revocation). Instead, the applicant must establish, by evidence, that the Will was not in fact revoked.

What is a Certainty Will Search and why is it necessary?

A Certainty Will Search searches for Wills that have been registered on The National Will Register (circa 8.7 million Will registrations in the system) and for Wills that have not yet been registered in geographically targeted areas where the deceased used to live and/or work. A Certainty Will Search is extremely important as it will be necessary to notify the probate registry of any persons who would be prejudiced by the grant if the copy Will is proved. If no such person exists then the registrar is more likely to grant the application. Alternatively, if such a person does exist then you should seek to obtain their written consent to the application. The written consents can then be lodged with (or following) your application.

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Oil prices rise as investors look to higher demand seen in second half

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Oil prices rise as investors look to higher demand seen in second half 1

By Shadia Nasralla

LONDON (Reuters) – Oil prices climbed on Tuesday as optimism that government stimulus will eventually lift global economic growth and oil demand trumped concerns that renewed COVID-19 pandemic lockdowns globally are cooling fuel consumption.

Brent crude futures for March rose 72 cents to $55.47 a barrel by 1152 GMT after slipping 35 cents in the previous session.

“The perception that any retracement will be quick as confidence in economic and oil demand recovery is unlikely to fade away,” said PVM analysts in a note.

U.S. West Texas Intermediate crude was at $52.65 a barrel, up 29 cents. There was no settlement on Monday as U.S. markets were closed for a public holiday. Front-month February WTI futures expire on Wednesday.

Investors are upbeat about demand in China, the world’s top crude oil importer, after data released on Monday showed its refinery output rose 3% to a new record in 2020.

China also avoided an economic contraction last year.

Investors are watching out for U.S. oil inventory data from the industry association API, due on Wednesday, the same day U.S. President-elect Biden’s inauguration speech will likely give details on the country’s $1.9 trillion aid package.

The International Energy Agency cut its outlook for oil demand in 2021, but pointed to a recovery in demand in the second half of the year to an annual average of 96.6 million barrels per day.

“Border closures, social distancing measures and shutdowns…will continue to constrain fuel demand until vaccines are more widely distributed, most likely only by the second half of the year,” it said in its monthly report.

(Additional reporting by Florence Tan, editing by Louise Heavens)

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Investing

Can Thematic Investing provide investors with growth opportunities in uncertain times?

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The impact of COVID-19 on the investment market

New whitepaper from CAMRADATA explores

CAMRADATA’s latest whitepaper on Thematic Investing, considers the role this type of investing can play in asset management and explores trends that can permeate society and traverse sectors. The whitepaper includes insights from guests who attended a virtual roundtable on Thematic Investing hosted by CAMRADATA in November, including representatives from CPR Asset Management, Sarasin & Partners, Impact Investing Institute, PwC, Quilter Cheviot, Scottish Widows and Stonehage Fleming.

Sean Thompson, Managing Director, CAMRADATA said, “In these seminal times, thematic investing has the potential to shape how the future unfolds. Yet running a successful thematic fund is no easy feat – it is a bit like navigating unchartered waters trying to identify the trends and the long-term opportunities.

“Trends such as AI and biotechnology are still in their relative early days, for example, and global economies are undergoing dramatic changes. But mapping out certain trends, identifying potential sustainable returns through a unifying thread that spans multiple sectors, could help future-proof investments. “Our roundtable guests considered current key themes, which themes worked well, and which have not and how thematic investors could identify trends with the potential to offer future growth.”

The guests named themes they currently like which included artificial intelligence, China, climate change, clean energy, automation, evolving consumption, ageing, digitalisation, water, waste management, biodiversity, and board diversity.

After discussing themes that have worked or not, the guests looked at total allocation to themed funds, and whether clients might be blinded by themes to the overall risk exposure in their portfolios.

Key takeaway points were:

  • Themes have a habit of coming and going. One guest recognised that automation and robotics, for example, were cyclical, which means that investors will have to think carefully about entry-points.
  • It was agreed that the commodities ‘super cycle’ of the 2000s came about with the economic development of China. Many commodities-based products found their way into mainstream investing, but this is unlikely to happen again.
  • One guest was surprised by some of the themes that interested their customers; with their research showing that Board Diversity was almost the lowest-ranking concern among the ESG choices they listed.
  • There was correlation between environmental impact and social benefits to investing. The theme that concerns the Impact Investing Institute, which is less than two years old, is improved measurement of such relationships.
  • In terms of successful themes, one clear winner due to COVID had been digitalisation.
  • One theme that has not done so well is the Ageing theme focused on older people travelling and enjoying experiences abroad later in life.
  • One guest said their firm used themes for ideas generation, not as a shortcut for portfolio construction. They said themes lead to good ideas, but they then spend at least three months researching a stock, so that the best themes are represented by the best investments.
  • The final point was that there are sensitivities for any global investor in allocating to themes, even the biggest one of all, Climate Change.
  • But on a positive note, one guest added if all stakeholders can resolve their differences on definitions such as impact and ethical investing, then more capital will be readily transferred into opportunities.

The whitepaper also features two articles from the sponsors offering valuable additional insight. These are:

  • CPR Asset Management: ‘Central Banks: leading the path towards Impact Investing’
  • Sarasin & Partners: ‘Theme or fad? How to invest for the long term’

To download the Thematic Investing whitepaper, click here

For more information on CAMRADATA visit www.camradata.com

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