Finance Monthly April 2019 Edition

11 www.finance-monthly.com NEWS - MONTHLY ROUND-UP News you Can’t Afford to Miss FINANCIAL SERVICES BUSINESSES ‘MOST PREPARED’ FOR FUTURE Businesses in the finan- cial services (FS) sector are preparing most for the future, as research shows that FS SMEs have in- vested the most in their resilience. The stats from research conducted by SME funding partner Ultimate Finance found that almost three quarters (71%) of finan- cial SMEs have invested in resilience in some form over the last 12 months – compared with an industry average of 58% - while another 20.4% are plan- ning on doing so in the next year. With recently released statistics outlining that the number of company insol- vencies has reached the highest level since 2014, increasing in 2018 to 16,090, it’s time for busi- nesses to take action and ensure they are resilient to manage future challenges. The research revealed: • 82% feel that a lack of UK economic resilience will have a negative impact on their business, due to Brexit and sluggish growth. • A third (37%) felt that building their professional resilience was key to their success. • Financial SMEs agreed that training for staff was the most important area to invest in, for future growth. Questioning 1,000 SMEs across a broad range of sectors, Ultimate Finance, alongside independent re- search company 3Gem, found that small business owners and managers in the financial services sec- tor are taking steps to pro- tect their company against challenges such as cash flow problems, employ- ment issues, Brexit and contending against larger competitors. Steve Noble, Chief Op- erating Officer, Ultimate Finance commented: “We often think of resilience as the ability to bounce back from disaster but that doesn’t cover the whole story. Resilience is also about being prepared and guarding against future challenges as well as hav- ing the courage to ask for advice and support when making plans to tackle whatever is potentially on the horizon. “We know from our work with thousands of small businesses, that SMEs are starting to take measures to improve their resilience and our research substantiates it. As Brexit looms and the British economy remains on shaky ground, SMEs in the financial services sector are prepar- ing for the worst while getting on with everyday business. Essentially, they are demon- strating the very essence of what it means to be resilient, as they attempt to overcome challenges. Yet they are time poor and often resource light, which can limit their capabil- ity to build their resilience in a way that truly safeguards their future. Our aim is to highlight the challenge and provide re- sources that will be genuinely useful for SMEs up and down the country.” Prior Ultimate Finance re- search highlighted how busi- ness owners didn’t know who to turn to when they needed support, and this same issue applies to resilience. ASIAN STOCKS SINK AMONG GLOBAL ECONOMY CONCERNS Japan’s Nikkei index has dropped by more than 3% amid concerns of a slow- down in the global economy. Hong Kong’s Hang Seng index also fell by 1.6%, and the Shanghai Composite lost 1% in afternoon trading. This comes after a key mar- ket indicator issued an “am- ber warning” that the United States could be heading for a recession. CMC Markets analyst Margaret Yang said: “Asian markets are tak- ing clues from [the] sharp decline in US equities on Friday [22nd March]. The selloff is unlikely to cease until the US markets stop bleeding.” “The risk of a US recession has risen and is flashing am- ber and this will keep mar- kets pricing a high chance of the Fed cutting rates,” said Tapas Strickland, markets strategist at National Aus- tralia Bank. Australian 10-year treasury yields fell to a record low of 1.756%, with analysts remarking that it could be a strong indicator of a down- turn hitting the resource-rich country. The ASX200 bench- mark index in Sydney also fell by 1% to a four-week low. Tano Pelosi, Portfolio Man- ager at Antares Capital in Sydney, said on the topic: “If the Reserve Bank of Austral- ia is slow to cut or respond to global headwinds, then we can see Australia’s yield curve flattening dramatically. It will suggest the RBA is be- hind the curve.” this involves relocating parts of their business or key staff to places like Paris, Luxembourg, Dublin, Frankfurt and Amster- dam, or setting up legal entities in the EU. Sometimes this has been done publicly, but a lot has, so far, not been disclosed, so we still can’t know the full scale of the situation.” He continues: “With no meaningful access to the EU’s single market, the UK’s finan- cial services sector is bracing itself for what is likely to be a long and steady decline, ulti- mately losing its coveted rank- ing as the world’s top financial centre. “The lack of confidence in the UK’s financial services sec- tor, which contributes around 6.5% to the country’s GDP, will inevitably hit jobs and the gov- ernment’s tax base.” The deVere CEO concludes: “The steady drain of invest- ment, talent and activity away from UK financial services might be able to be stopped, the situation might be recov- erable, but confidence needs rebuilding fast.”