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OVER-65S CAN BANK ON £1.1 TRILLION OF PROPERTY WEALTH

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OVER-65S CAN BANK ON £1.1 TRILLION OF PROPERTY WEALTH

Retired homeowners gain £7,900 in property wealth in a year, Key Retirement Pensioner Property Index shows Over-65s in the South East and East Anglia have made more than £1,000 a month in the past year

Retired homeowners have gained more than £7,900 each in property wealth in the past year despite uncertainty in the housing market, analysis* from leading over-55s financial specialist Key Retirement shows.

Total property wealth owned by over-65s who have paid off their mortgages is near a record high of more than £1.101 trillion after growing £37 billion in the past year, Key’s Pensioner Property Equity Index reveals.

Owning a home outright has been worth nearly £660 a month on average for retired homeowners. Over-65s in the South East and East Anglia have been the biggest winners with gains of more than £1,000 a month while retired homeowners in the West Midlands have made £960 a month.

The long-term value of home ownership is underlined by Key’s index – since the group started analysing over-65s housing wealth in 2010 retired homeowners have seen growth of 41% or £321 billion which is worth around £68,500 on average for every over-65 homeowner.

The strength of the housing market means property wealth is making a major contribution to retirement standards of living as the equity release market expands with customers** releasing an average £77,380 of property wealth and nearly £134,000 in London and £91,000 in the South East.

Dean Mirfin, Chief Product Officer at Key Retirement said: “The long-term strength of the housing market is delivering for retired homeowners who have made around £7,900 in the past year.

“Total property wealth of more than £1 trillion means pensioners who have paid off mortgages can rely on using their homes to generate tax-free returns no matter what happens in the short and medium term.

“The average homeowner is releasing through equity release the equivalent of the gains made since 2010 and property wealth is having a dramatic effect on the standards of retirement living for many thousands across the UK.”

The table below shows the detailed picture across Great Britain – the only area to see a drop is London but homeowners in the city still own £176.38 billion of property wealth.

Region Average change in value of home equity for homeowners aged 65+ (between November 2016 and November 2017 index) Combined change in value of home equity for homeowners aged 65+ (between November 2016 and November 2017 index
South East up £12,661 +£8.305 billion
London down £5,734 -£2.098 billion
South West up £10,661 +£6.68 billion
North West up £8,221 +£5.516 billion
East Anglia up £12,483 +£5.891 billion
East Midlands up £9,606 +£4.142 billion
West Midlands up £11,568 +£4.145 billion
Yorks/Humbs up £4,379 +-£1.263 billion
Scotland up £2,986 +£842.05 million
Wales up £6,467 +£1.711 billion
North East up £2,524 +£694.1 million
GREAT BRITAIN +£7,907 +£37.094 billion

The table below shows over-65s in the North West are most likely to own outright with 671,000 having paid off mortgages compared with 656,000 in the South East.

Region Estimated property equity in homes owned outright by people aged 65+ (November 2017) Estimated percentage of total value of property equity belonging to people aged 65+ (November 2017) Number of households in the region owned outright by people aged 65+
South East £213.377 billion 19.37% 656,000
London £176.380 billion 16.01% 366,000
South West £157.854 billion 14.33% 626,600
East Anglia £136.753 billion 12.42% 472,000
North West £106.733 billion 9.69% 671,000
East Midlands £79.792 billion 7.24% 431,200
West Midlands £68.855 billion 6.25% 358,400
Yorks/Humbs £44.957 billion 4.08% 288,600
Scotland £41.169 billion 3.75% 282,000
Wales £40.455 billion 3.67% 264,600
North East £35.127 billion 3.19% 275,000
GREAT BRITAIN £1.101 trillion 4,691,400

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Bitcoin slumps 10% as pullback from record continues

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Bitcoin slumps 10% as pullback from record continues 1

LONDON (Reuters) – Bitcoin slumped 10% on Thursday to a 10-day low of $31,977 as the world’s most popular cryptocurrency continued to retreat from the $42,000 record high hit on Jan. 8.

The pullback came amid growing concerns that bitcoin is one of a number of financial bubbles threatening the overall stability of global markets.

Fears that U.S. President Joe Biden’s administration could attempt to regulate cryptocurrencies have also weighed, traders said.

(Reporting by Julien Ponthus; editing by Tom Wilson)

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A lot of hot air? Investors snap up hydrogen stocks in green frenzy

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A lot of hot air? Investors snap up hydrogen stocks in green frenzy 2

By Elizabeth Howcroft and Thyagaraju Adinarayan

LONDON (Reuters) – An unprecedented rally in “green” hydrogen stocks looks set to extend as investors flock to companies which promise to produce the gas without using fossil fuels, expecting the technology to scale up over the next 10 years to justify rocketing valuations.

Hydrogen is the universe’s most abundant element. It is mostly extracted from fossil fuels, emitting carbon dioxide in the process. “Green” or clean hydrogen requires using electrolysis to split water into its components of hydrogen and oxygen and doing so cheaply is often described as the holy grail of green energy transition.

Share prices of companies in the industry have soared more than 500% in the past year, driven by the rising adoption of zero-emission vehicles, a deadline set by many countries to go carbon-free by 2050 and lately U.S. President-elect Joe Biden’s support for clean energy.

Plug Power, Ceres Power and Fuelcell Energy, which make hydrogen fuel cell systems that power devices ranging from warehouse machines to cars, are leading that charge, jumping 400% to 1,600% in the last year.

“Hot money is flowing towards renewables and clean energy, and there’s been a clear re-rating of valuations in the sector,” said Emmanuel Cau, head of European equity strategy at Barclays.

While a lot of focus has been on hydrogen’s role in the automotive sector, its usage is growing far beyond that.

The European Union plans to scale up renewable hydrogen projects across polluting sectors ranging from chemicals to steel with cumulative investments in renewable hydrogen in the region seen reaching up to 470 billion euros ($570 billion) by 2050, the region’s commission said.

That has fuelled the stocks of electrolyser makers Norway’s Nel and UK’s ITM Power.

“The momentum just keeps going really with this theme,” Ashim Paun, HSBC’s global co-head of climate change and ESG research said on a webinar.

ZeroAvia, a hydrogen plane startup, last month secured $37.7 million in new cash via a funding round led by Bill Gates’ Breakthrough Energy Ventures and from the British government to support its bid to develop zero-emission aircraft.

The frenzy in hydrogen-related stocks has led to some concerns about a bubble, with companies trading at extreme prices based on expectations that their revenue will surge in future, despite worries about possible headwinds for the sector.

Widespread adoption of hydrogen as a fuel for cars is far from a given.

Toyota launched a new hydrogen fuel cell car in December, but it has largely failed to win customers over to the technology amid concerns about a lack of fuelling stations, resale values and the risk of hydrogen explosions.

The momentum behind electric vehicles may be another headwind, said Jonathan Bell, chief investment officer at Stanhope Capital.

“The problem with hydrogen is that sometimes when you have two competing systems, it’s not the better technology that wins, it’s the one that gets market share and the network effect first of all,” Bell said.

UK-based ITM Power, which manufactures the electrolysers needed to make green hydrogen, is trading at a massive seven times its 2030 sales, while rival Nel is relatively cheap at three times 2030 sales, according to HSBC’s calculations.

Some investors may avoid the sector altogether, after a similar burst of enthusiasm two decades ago proved short-lived, and much of the latest excitement around green energy is based on Biden’s policy plans, which are yet to be passed into law.

But no bank is ringing the alarm bells, yet.

JP Morgan analysts advised long-term investors in a recent note to take advantage of any pullback in prices and “take an unorthodox approach to valuation for the next several years” – in other words, not worry about a potential bubble.

Sean McLoughlin, HSBC EMEA head of industrials research, said scarcity value in the market, unprecedented fiscal stimulus, low cost of capital and debt and low yields in other asset classes mean the hydrogen market’s valuation may be justified though he cautioned it was at a “potentially fraught level.”

“There’s a lot of capital that is very ESG-focused chasing a select number of companies that offer this kind of pure play exposure to these future energy trends. So there is a risk that this may unwind.”

($1 = 0.8258 euros)

(This story corrects paragraph 2 to show hydrogen is the universe’s most abundant element, not earth’s)

(Reporting by Thyagaraju Adinarayan and Elizabeth Howcroft, additional reporting by Julien Ponthus; editing by Rachel Armstrong and Emelia Sithole-Matarise)

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BlackRock to add bitcoin as eligible investment to two funds

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BlackRock to add bitcoin as eligible investment to two funds 3

(Reuters) – BlackRock Inc is adding bitcoin futures as an eligible investment to two funds, a company filing showed, in a move to bring the world of cryptocurrency to its clients.

The world’s largest asset manager said it could use bitcoin derivatives for its funds BlackRock Strategic Income Opportunities and BlackRock Global Allocation Fund Inc.

The funds will invest only in cash-settled bitcoin futures traded on commodity exchanges registered with the Commodity Futures Trading Commission, the company said in a filing to the Securities and Exchange Commission on Wednesday.

Chief Executive Officer Larry Fink had said at the Council of Foreign Relations in December that bitcoin is seeing big giant moves every day and could possibly evolve into a global market. (https://bit.ly/2XXFHrB)

Earlier this month, Bitcoin, the world’s most popular cryptocurrency, hit a record high of $40,000, rallying more than 900% from a low in March and having only just breached $20,000 in mid-December.

A BlackRock spokesperson declined to comment beyond the filings when contacted by Reuters.

(Reporting by Radhika Anilkumar and Bhargav Acharya in Bengaluru; Editing by Arun Koyyur)

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