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Wealth Management

A LOOK AT BREXIT AND WHAT THE FUTURE MIGHT HOLD

As D-Day for the United Kingdom leaving the European Union looms, investors globally are watching to find out what it really means to the UK economy and to the investment market not being part of the European Alliance.

 

Sonny Hawkins, Client Relationship Manager

at IntaCapital Swiss, that provides bespoke solutions for complex financial situations, gives us his opinion on what Brexit will mean to investors worldwide and shed some light on the opportunities and the upside of life post March.

 

Understanding the impact of Brexit

To really understand the impact of Brexit, the historical events of the present day European Union should be looked at in its proper context. The EU was set up with the objective to avoid a repeat of the armed conflict of two world wars coupled with the appalling loss of life of such barbaric savagery. The political objective was to create a cohesive integration of European interests, whilst upholding national identity and the sovereignty that this rightly bestowed on the nations of Europe. To this end the allied powers initiated the Marshall Plan for the rebuilding of post war Europe, providing a solid economic and political platform upon which a sustainable future of European prosperity could be built.

 

The present situation

As we all know on 23 June 2016 the United Kingdom of Great Britain and Northern Ireland (UK) held a constituency based nationwide referendum in terms of properly enacted parliamentary legislation.

 

The result of the referendum duly held in terms of the European Union Referendum Act 2015 on 23 June 2016 was that the UK should leave the European Union. The breakdown of the result is detailed as follows:

 

Leave17,410,74251.89%
Remain16,141,241 48.11%
Valid Votes33,551,98399.92%
Invalid or Blank Votes25,3590.08%
Total Votes33,577,342100.00%
Registered Voters/% Turnout46,500,00172.21%

 

 

This heralded the passage of the European Union (Withdrawal) bill, which would ultimately trigger the abolition of the European Communities Act of 1972 and pave the way for the invocation of article 50 of the Lisbon Treaty. Article 50 is the relevant section of the Lisbon Treaty by which a member state of the EU can formally serve notice of its intention to terminate their membership.

 

Present UK Trade within the EU

Trade has always been the bedrock for the European political project. Without trade the EU would cease to be a viable political entity, providing a cohesive merging of economic input from the member states overseen and administered by the European Commission. Where necessary and deemed appropriate the European Parliament of course ratify trade agreements in addition to legislating on matters affecting the citizens and what are considered in their interests.

 

 

In 2018 we exported £ 170,210 of goods to the EU but imported £ 266,354 worth. To put in basic terms, the UK imports more from the EU than it exports. This trend simply highlights the fact that a significant trade imbalance exists in favour of importers and should present a clear message that the UK ought to consider a radical diversification of its export strategy. It is interesting to note that Switzerland has already acknowledged its desire to continue to trade with the UK with the signing of the trade continuity agreement early February that will see British businesses able to continue to trade freely without any additional tariffs with Switzerland.

 

Although many are fearful about the likelihood of a hard Brexit or trade agreements with other EU countries not being secured, the above statistics show that the UK is in a unique position to be able to capitalise on opportunities for international trade.

 

Post Brexit Investment Opportunities

 

Post Brexit, the UK is likely to be far more attractive for inward investment. Common UK law encourages investment and is far more conducive to increasing the velocity of capital. EU law is frustratingly restrictive to capital flows.

 

Although there is no doubt that immediately post Brexit, there may be a dip in the value of GBP, this in fact will make UK exports more competitive and enhance further inward investment. Further, immediately post Brexit, there may be a correction in asset pricing which will yield additional investment opportunities. There will be a myriad of opportunity for counter-cyclical investment strategies that take advantage of the dislocation in asset and capital market prices.

 

As a result of this and combined with the low interest rate cycle-  the UK 10yr Gilt currently yields 1.132% – there will continue to be a global appetite for yield and real assets. As a result, UK property will grow more attractive against fixed income.

 

According to most forecasts, 90% of world growth over the next decade will be outside the EU. Countries in Asia, Africa and South America can be targeted with bilateral trade deals that will significantly accelerate UK growth in the global economy.

 

So, what does this all mean for the status quo on 29th March 2019? This is impossible to predict with any degree of certainty. However, whatever the outcome and even with a hard Brexit ahead, there are many upsides and opportunities ahead for investors to the UK no longer being part of the EU.

 

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Business

STOP THE CONFUSION: HOW TO KNOW IF YOUR BUSINESS MAY BE INSURED AGAINST COVID-19

By Alex Balcombe, Partner at Harris Balcombe

 

The last few weeks has seen businesses in hospitality, tourism, retail, leisure and more forced to close their doors following the Government’s orders that they should close to prevent the spread of coronavirus.

While this is expected to flatten the curve and reduce the number of coronavirus cases, it will of course have an impact on businesses and employees alike.  For small businesses especially, there are many concerns about how they can claim on their insurance to weigh the fall of this impact.

 

Mixed Messaging

In response to calls to help struggling businesses, the Government has informed the public that companies who are facing turmoil will be able to claim on their business interruption insurance during this difficult time. For most, this is wrong.

Alex Balcombe

The insurance industry has also been extremely vocal that there is no cover for any coronavirus-hit businesses during this tough financial period. This isn’t strictly true either.

How can businesses see through the mixed messaging and best secure their future and their livelihoods and reduce money worries? It’s an extremely stressful time for many companies, and confusion over whether or not they can be covered can only cause more unnecessary stress.

Since it’s a new disease, most businesses will not be covered for business interruption due to COVID-19. In fact, the vast majority of policies do not cover anything related to COVID-19.

That said –  don’t rule out the idea that you may be covered. There is a chance that you will be covered against COVID-19, but not know it. This is a very small chance, but your current cover may already protect your business against the consequences of coronavirus, and the nationwide response to it –  though those with this cover are unlikely to realise it.

 

How Could I Be Covered?

Not everyone has business interruption insurance, as it’s not a legal requirement. It is entirely up to the policy holder to weigh up the benefits of having it, and their ability to trade should a disaster happen.

To be considered for cover for COVID-19, there are two types of policy extensions to your business interruption cover that can potentially cover you for this situation:

Infectious Disease Extension 

Many policies expressly state which diseases fall within the realm of being an infectious or notifiable disease. If this is the case, your policy will not provide cover. As it is a new disease, these policies will not have included COVID-19.

Other infectious disease extension policies will define the disease with reference to the actions of the government. Since the UK Government has named COVID-19 as a notifiable disease throughout the UK, it is possible that your business may fall into this definition, thus meaning you may be able to make a claim.

However, again, it’s not always that simple. Many policies require the disease to have been on your premises, while others specify a radius from your premises in order to qualify.

 

Denial of Access Extension (non-damage)

Denial of Access Extension (non-damage) policies may cover you if you’re prevented from accessing your property. This could be due to an event, or by the actions of a competent authority, which could cause your business interruption cover to engage.

If covered by this clause, there are often very subtle differences in wording in your policy. This could depend on the insurer or policy. You may well be covered, but it will depend on your particular circumstances, and the specific policy wording.

 

What now?

It’s clear that the Government needs to do more in ensuring there is clear messaging for businesses, and to help the insurance market look after policy holders. This is an unprecedented situation, and with many people looking to claim on their insurance, we’re already seeing major delays which could have a domino impact.

People throughout the world are understandably facing all kinds of worries because of the current pandemic. Our ways of living have changed, and many business owners will not have experienced a situation like this in their life times. If you own a business and are unsure about whether you can claim for business interruption, or are confused about ambiguous wording, get in touch with a loss assessor.

These claims are not simple, but loss assessors will be experts in business interruption insurance, and will specialise in large and complex claims. They will be able to help and guide you along the way, check your wording and work on your behalf to make sure you get everything you are entitled to.

 

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Wealth Management

HERE’S HOW YOU CAN LEARN TO TRADE RISK-FREE DURING THE COVID-19 MARKET CRASH

COVID-19

Trading app BullBear has launched new features to support budding investors looking to hone their skills against the backdrop of the COVID-19 stock market plunge. The risk-free financial game aims to empower the next generation of investors to learn how to trade stocks and shares by playing with dummy chips as opposed to real money. The app updates come as investors pull back from a volatile stock market rocked by the coronavirus outbreak.

 

At a time when some fresher investors are experiencing their first-ever stock market crash and seasoned investors are reluctant to invest new capital in the market, BullBear is empowering a whole new cohort of traders by teaching them how to trade effectively at no risk.

 

App users can engage in both short-term and long-term trading games using real-time market data from popular stocks enabling them to build investing confidence, making the app both engaging and educative.

 

With over 35,000 downloads, the app provides a free, fun way for thousands to learn how trading works by offering a practice arena in which trades take place and where no real money can be lost. Users can also enter into duals and competitions with other players. Whilst the app incorporates dummy chips to invest with, players can still redeem prizes by winning ‘bulls’ when they rank high in games. These bulls can be used to redeem rewards, such as gift cards from retailers like Amazon, Apple, Google Play and Netflix, at the in-app store.

 

Co-founder of the BullBear app, Anurag Saboo, stated

 

“I realised just how lacking the support for young investors was when my cofounder and I wanted to invest some money in stocks whilst at university. We had no idea where to start and so spent a couple of months trying to find a platform through which we could learn the basics before we risked any cash. But it simply didn’t exist. The resources that did were dull and theoretical. Paper trading can be very boring, and no-commission trading helps only if you make money out of your portfolio. Social methods of learning can help, for example, Etoro’s copy trades, but they still don’t let investors explore the markets themselves before putting money down. Combine this with the fact that only a small percentage of young investors make money through the market, and others end up staying away or are pushed away through losses, we decided to launch BullBear to offer a free, fun alternative.”

 

During a time of crisis accompanied by a turbulent stock market, the BullBear app provides a fail-proof way for budding investors to develop their trading knowledge, helping them to make more informed investments.

 

The BullBear app is available to download now on Google Play and the App Store.

 

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