Constant turmoil surrounding Brexit, Trump and populist movements across the world make for a very volatile trading landscape.

Here are Samuel Leach’s top trends and events that will cause currency fluctuations in 2019.

Brexit

No Deal 

Parliament is saying that there’s no chance of a no-deal Brexit; however, May's deal has little hope of being passed in parliament.

This is causing huge uncertainty in the market and we could see GBP fall against its pairs along with weakness in FTSE. Evidence to the current uncertainty has been strengthened by the government emergency testing at Dover. A pile-up of lorries would be expected at customs if no deal is the outcome. There are stocks that could benefit from a weak pound due to most of its income coming from exports.

Deal

Although this is increasingly unlikely, if a deal is passed, I would expect the pound to strengthen against its pairs due to more certainty in the market. All indices have been in a bear market in the final quarter of 2018, so predicting the FTSE to go against the trend of its peers is unlikely. If we see other indices turn bullish there is no doubt that FTSE will follow.

Second Referendum

May reiterates that under no circumstance is this an option, however, it must be contemplated. If this does occur, a pop in GBP will be expected in the short term, and only when a result is concluded would a long-term trend be evaluated. If the public voted to leave again, we could see GBP/USD back to its low of 1.1/1.2. On the other hand, if the UK were to stay in the EU, there is no reason GBP/USD won't return to its pre-referendum price of 1.4.

If China does start to go into a recession as many expect, this is likely to travel around the world and other economies will follow.

US/China Trade relations

The US Dollar has been strong throughout 2018, however during the last few months of the year, we saw it starting to weaken. Bad trade relations have started to put pressure on both economies, with tariffs of up to 40% on exports like Soybeans from some US exporters, which has led to farmers becoming reliant on a $12billion bailout.

Even Apple has blamed its recent slowdown in iPhone sales on a weak Chinese economy. If China does start to go into a recession as many expect, this is likely to travel around the world and other economies will follow. China’s central bank has even cut the amount of cash it requires banks to hold in reserve for the 5th time in a year which has freed up $116biliion in cash for lending.

How this effects the dollar against the Yuan depends on which economy has the upper hand if more tariffs are implemented once the trade deal deadline passes. Trump has already increased import tax of $200billion on Chinese imports and is threatening with another $300billion, which would be crippling for the Chinese economy. In this case, I would expect to see the Yuan fall.

The Chinese government has made a statement saying it won't let the Yuan sustainably fall below 7 against the dollar. Many analysts suggest that the government has plenty of ways of stopping the Yuan from depreciating, and as The People’s Bank of China has successfully intervened in the past, there is no reason for them not to do it again if things were to worsen.

We should all be watching US interest rate hikes very closely over the next year.

Emerging economies to watch

Many analysts believe Indonesia is expected to be a leader in the emerging market within 2019. The country has low inflation compared to other emerging markets with high stability. Most analysts don’t see this trend slowing down in the region. If the US becomes more dovish with its rate hikes, this is expected to be beneficial to emerging markets and give a boost to emerging economies.

The area experienced a slight slowdown towards the end of 2018, which prompted the Bank of Indonesia to raise interest rates by 125 basis points since May and intervene in both the currency and bond market in the attempt to curb any losses. However, this economy is in a good place to benefit from any bounce in global economies.

US Interest rates

We should all be watching US interest rate hikes very closely over the next year, as this has a strong correlation to all US indices and the dollar index. The Fed is looking to be more dovish on its interest rates, however, two hikes are expected in 2019.

2019 will be characterised by uncertainty, and several geopolitical events will impact the foreign exchange markets. As with every form of trading, keeping on top of political events will be key for FX traders; the above are particular areas to stay on top of.

Rajeev Saxena, Managing Director of Velocity Capital Advisors, explains why the country needs high-growth tech businesses now more than ever, and why Britain needs investors to back them through the Enterprise Investment Scheme.

With the seemingly interminable Brexit negotiations, you could forgive investors for being more than a little tentative at the moment. However, it has never been more important to back new British companies through investment.

Doing so will give Britain the best chance to thrive going forward, whatever the fallout from Brexit. It will help to bolster the economy when it needs it most and create valuable jobs. Meanwhile, focusing on high-growth tech startups well positioned to thrive in a post-Brexit environment will help drive home-grown innovation across British industry, attract foreign investment and boost exports.

Of course, investors want to minimise risk, but they also want to get the best possible return on their investments. That’s why the Government launched the Enterprise Investment Scheme (EIS). By offering generous tax incentives, EIS reduces investor risk.

Meanwhile, honing the scheme to focus purely on high-growth tech companies, which the Government did last year, maximises investors’ potential returns. It also shows the confidence the Government has in these types of businesses and leaves no doubt as to where they think the future of Britain’s economy lies.

Investing in these companies through EIS enables investors to claim 30% tax relief on investments up to £2m. Plus, they can gain even more by investing through the small number of portfolio funds that also offer carryback, enabling investments to be offset against tax in the previous year.

To reduce risk further, investors should choose high-growth tech startup portfolios with strong performance records. They should select highly innovative businesses with a strong market knowledge that are producing something highly appealing to an international audience so that demand for their products and services will be there, whatever the deal with Europe is.

Any investors sceptical of EIS should take note that it was recently independently assessed as the best tax incentive investment scheme out of the 46 that currently exist across Europe. In fact, countries across the globe are interested to replicate EIS in their own economies.

Investors should also note that SMEs in the UK are bullish about the future, not cowering in the shadow of Brexit. Almost three-quarters (74%) predict revenue growth of more than 20% over the next year. This presents another reason to invest.

Overall in 2018, VC investment in Europe reached £18.9bn, surpassing 2017’s record numbers. Some 31.5% (£6bn) of this was invested in UK startups. This was more than 1.5 times the level invested in fast-growth businesses in Germany, and 2.6 times the levels of investment seen by the startup ecosystem in France. In light of these numbers, it’s not surprising that 600,000 startups launched in the UK last year, more than ever before, despite all the Brexit turmoil.

This shows that Britain is very much open for business and that high-growth startups are flourishing. This is great news for the country and for investors, and it’s vital that it continues through further investment. In short, this is no time for investors to get cold feet. They should back Britain and high-tech startups now.

Market Outlook

Mihir Kapadia, CEO and Founder of Sun Global Investments

When it comes to investment trends, every year appears to have a certain theme which dominates the markets and beyond throughout the course of those twelve months. 2017 was largely a stock market year, with global markets closing at record highs thanks to a booming global growth rate, loose tax and monetary policy, low volatility and ideal currency scenarios (for example, a weaker pound supporting inward investments). It was also a crazy year in the consumer segment with market momentum captivated with crypto assets, leading to established financial services firms to create special cryptocurrency desks to monitor and advise.  Today, things are looking very differently.

Markets have since moved from optimism (led by stock markets) to a cautious tone (with an eye out for safe haven assets). This is largely due to the concerns over slowing global growth rates (especially from powerhouse economies like Germany and China), volatile oil markets and Kratom Powder For Sale induces significant market threats with the likes of Brexit and the trade wars. The rising dollar has also not helped much, with Emerging Market and oil importing economies suffering with current account deficits.

At the World Economic Forum’s annual meeting in Davos last month, the International Monetary Fund (IMF) has warned of the slowdown, blaming the developed world for much of the downgrade and Germany and Italy in particular. While the IMF does not foresee a recession, the risk of a sharper decline in global growth is certainly on the rise.  However, this risk sentiment doesn’t factor in any of the global triggers – a no-deal Brexit leading to UK crashing out of the EU or a greater slowdown in China’s economic output.

While the IMF does not foresee a recession, the risk of a sharper decline in global growth is certainly on the rise.

Volatility expected

 We have lowered earnings expectations globally due to more subdued revenue and margin assumptions. We believe investors will be confronted by increased volatility amid slower global economic growth, trade tensions and changing Federal Reserve policy. Our base case relies on the view that the US may enter a recession in 2020. As the market dropped 9% in December, the worst market return in any 4th Quarter post World War II, many risks are starting to be discounted by the market. We have reduced industrials, basic materials and financials due to heightened risks.

There are a number of factors that are driving this view, but it is important to note that upsides to the risks do exist:

• The Fed: The Fed’s slow pace of hiking interest rates is meant to be just enough to keep wage inflation from accelerating, but not so much that it crushes business and consumer spending. It’s a difficult balancing act.
• Fiscal stimulus: The tightening of fiscal conditions has already created a slowdown that only time and lower rates will heal. The impact from the US Government’s lower tax rates and higher spend will end when 2019 does.
• Trade and China: The lack of clarity on trade has created an ‘uncertainty tax’, forcing companies to seek alternative means of procurement, adding to inefficiencies and holding back some investment decisions. China is trying to stimulate its consumer sector, but the country is already weighed down by high debt and defaults, and it has limited ability to create demand at present.
• European politics: Brexit negotiations and Italy’s budget situation have added to the political fog affecting investor confidence.

In uncertain markets like these, we should look to do three things: reduce risk, focus on high quality and stay alert for opportunities due to dislocations.

So what do you do?

We have dialled down risk in 2018 and will likely continue to do so in 2019 as we expect global growth to slow. However, the expected volatility could cause dislocations that are not fundamentally driven, resulting in tactical opportunities to consider.

The best piece of advice to be relayed is: “Don’t run for the hills”. In uncertain markets like these, we should look to do three things: reduce risk, focus on high quality and stay alert for opportunities due to dislocations.

It would be ideal to shift allocations from cyclical to secular exposures, especially away from industrials, basic materials, semiconductors and financials due to heightened risks. It would also be ideal to focus on high-quality companies with secular growth opportunities that can generate dividends as well as capital appreciation.

Two sectors stand out as both strategically and tactically attractive - aging demographics and rapidly improving technology are paving the way for robust growth potential in healthcare. Accelerating growth in data, and the need to transmit, protect, and analyse it ever more quickly, make certain areas in technology an attractive secular opportunity as well. Where possible, our advice to investors is to maintain a tactical portion of their risk assets, because volatility may give them the opportunity to find mispriced sectors, themes and individual securities.

Still, in this climate, the bottom line is that you should be increasingly mindful of risk in your portfolio so that you can reach your long-term investment goals. 

Eastern Economies vs. Western Economies: Countries, Sectors and Projects to Watch

Dr. Johnny Hon, Founder & Chairman, The Global Group

The global economic narrative in 2018 was characterised by growing tensions between the US and China, the world’s two largest economies. The US imposed 10% to 25% tariffs on Chinese goods, equivalent to more than $250bn, and China responded in kind.

This had a seismic effect on global economic growth which, according to the IMF, is expected to fall to 3.5% this year. It represents a decline from both the 3.7% rate in 2018 and the initial 3.7% rate forecast for 2019 back in October.

Although relationships between Eastern and Western economies are currently strained, suggestions that a global recession is on the horizon are exaggerated. China’s economy still experienced high growth in 2018.

However, it is clear that trade wars have no winners. The rise of protectionism in the West is creating more insular economies and we are at a time when increased efforts are needed for mutual understanding. There are still enormous opportunities across the globe: India is among several global economies showing sustained high growth, and innovations in emerging markets such as clean energy or payments systems continue to gather pace. Investors who are savvy and businesses with true entrepreneurial flare can triumph at a time when others may be stagnating.

The rise of protectionism in the West is creating more insular economies and we are at a time when increased efforts are needed for mutual understanding.

Here are the exciting countries, sectors and projects to look out for in 2019:

Countries

Recent trends in foreign direct investment (FDI) reveal a growing trend to support developing economies. In the first half of 2018, the share of global FDI to developing countries increased to a record 66%. In fact, half of the top 10 economies to receive FDI were developing countries.

This trend will accelerate in 2019 - the slow economic global growth, and subsequent currency depreciation means the potential yield on emerging market bonds is set to rise dramatically this year. More and more investors are realising the great potential of these developing economies, where the risk versus reward now looks much more attractive than it did in recent years. Asia in particular has benefited from a 2% rise in global FDI, making it the largest recipient region of FDI in the world.

India and China are both huge markets with a combined population of over 2.7 billion, and both feature in the world’s top 20 fastest growing economies. However, the sheer quantity of people doesn’t necessarily mean the countries are an easy target for investment. There are plenty of opportunities in both India and China, but it takes a shrewd investor with a good local business partner to beat the competition and find the right venture.

Other Asian economies to invest in can be found in Southeast Asia, including Vietnam, Singapore, Indonesia and Cambodia. In a recent survey by PwC, CEOs surveyed across the Asia-Pacific region and Greater China named Vietnam as the country most likely to produce the best investment returns – above China.

Investors who are savvy and businesses with true entrepreneurial flare can triumph at a time when others may be stagnating.

Sectors

One sector in particular which remained resilient to the trade wars throughout 2018 was technology. By mid-July, flows into tech funds had already exceeded $20bn, dwarfing the previous record amount of $18.3bn raised in 2017. This was a result of the increased accessibility and popularity of technologies in business.

In the area of Artificial Intelligence (AI) for example, a Deloitte survey of US executives found that 58% had implemented six or more strains of the technology—up from 32% in 2017. This trend is likely to continue in 2019, as more businesses realise AI’s potential to reduce costs, increase business agility and support innovation.

Another sector which saw significant investment last year was pharmaceuticals and BioTech. By October, these had already reached a record high of $14 billion of VC investment in the US alone. One particular area to watch carefully, is the rising demand for products containing Cannabidiol (CBD), a natural chemical component of cannabis and hemp. Considering CBD didn't exist as a product category five years ago, its growth is remarkable. The market is expected to reach $1.91 billion by 2022 as its uses extend across a wide variety of products including oils, lotions, soaps, and beauty goods.

Projects

At a time of rising trade tensions and increased uncertainty, cross-border initiatives are helping to restore and maintain partnerships and reassure global economies. China's Belt and Road Initiative is a great example of how international communities can be brought closer together. From Southeast Asia to Eastern Europe and Africa, the multi-billion dollar network of overland corridors and maritime shipping lanes will include 71 countries once completed, accounting for half the world’s population and a quarter of the world's GDP. It is widely considered to be one of the greatest investment opportunities in decades.

The Polar Silk Road is another international trade initiative currently being explored. The Arctic offers the possibility of a strategic commercial route between Northeast Asia and Northern Europe. This would allow a vast amount of goods to flow between East and West more speedily and more efficiently than ever before. This new route would increase trading options and would make considerable improvements on journey times – cutting 12 days off traditional routes via the Indian Ocean and Suez Canal. It could also save 300 tonnes of fuel, reducing retail costs for both continents.

Since founding The Global Group - a venture capital, angel investment and strategic consultancy firm - over two decades ago, I have seen the global economic landscape change immeasurably. The company is built around the motto ‘bridging the frontiers’, and now more than ever, I believe in the importance of strong cross-border relationships. Rather than continuing to promote notions of protectionism, we must instead explore new ways of achieving mutual benefit and foster a spirit of collaboration.

Brexit, Trade Wars and the Global Economy

Robert Vaudry, Chief Investment Officer at Wesleyan

If there’s one thing that financial markets do not like, it is uncertainty - which is something that we’ve faced in abundance over the last couple of years.

The UK’s decision to leave the European Union and President Trump’s 2016 election in the US, sent shockwaves through markets, and the two years that followed saw increased volatility across asset classes. This year looks set to be fairly unpredictable too, but in my view there are likely to be three main stabilising factors. Firstly, I expect that the UK will secure some form of a Brexit deal with the EU – whatever that may look like – which will give a confidence boost to investors looking to the UK. Secondly, the trade war between America and China should also come to an end with a mutually acceptable agreement that further removes widespread market uncertainty. Thirdly, the ambiguity surrounding the US interest rate policy will abate.

The Brexit bounce

A big question mark remains over whether or not the UK is able to agree a deal with the EU ahead of the 29th March exit deadline. However, with most MPs advocating some sort of deal, it’s highly unlikely that the UK will leave without a formal agreement in place. So, what does this mean? Well, at the moment, it looks more likely than ever that the 29^th March deadline will need to be extended, unless some quick cross-party progress is made in Parliament on amendments to Theresa May’s proposed deal. While an extension would require the agreement of all EU member states, this isn’t impossible, especially given that a deal is in the EU’s best interests as the country’s closest trading partner.

The ambiguity surrounding the US interest rate policy will abate.

The result of any form of deal will be a widespread relief that should be immediately visible in the global markets. It will bring greater certainty to investors, even if the specific details of a future trading relationship between the UK and EU still need to be resolved. Recently, it was estimated that Brexit uncertainty has so far resulted in up to $1trn of assets being shifted out of the UK, and I personally don’t see this as an exaggeration. Financial markets have been cautiously factoring Brexit in since the referendum vote in 2016 and, if we can begin to see a light at the end of the Brexit tunnel, it is likely that some of these vast outflows will be reinvested back into the UK. We can also expect to see a rise in confidence among UK-based businesses and consumers, at a time when the unemployment rate in the UK is the lowest it has been since the mid-1970s.

All of these outcomes would help lead to a more buoyant UK economy and the likelihood that UK equities could outperform other equities – and asset classes – in 2019.

Trade wars – a deal on the table?

Looking further afield, the trade tensions that were increasingly evident between the US and China last year could also be defused. The last time that China agreed to a trade deal, it was in a very different economic position – very much an emerging economy, with the developed world readily importing vast quantities of textiles, electronic and manufacturing goods. However, given China’s current position as one of the world’s largest economies, it has drawn criticism from many quarters regarding unfair restrictions placed on foreign companies and alleged transfers of intellectual property.

Either way, global financial markets are eager for Washington and Beijing to reach a mutually agreeable trade deal to help stimulate the growth rates of the world’s two largest economies.

It was estimated that Brexit uncertainty has so far resulted in up to $1trn of assets being shifted out of the UK.

Be kind to the FED

2018 saw an unprecedented spat between the US President and his Head of the Federal Reserve. What began as verbal rhetoric quickly escalated into a full-frontal assault on Jerome Powell, and the markets were unimpressed. With the added uncertainty about the impact of a Democrat-led US House of Representatives, we headed into a perfect storm, and equity markets in particular rolled over in December. Ironically, this reaction, coupled with a data showing that both the US and the global economy are generally slowing down – albeit from a relatively high level – has resulted in a downward revision of any US interest rate rises in 2019. The possibility of up to four US interest rate rises of 25bps each during 2019 is now unlikely – I expect that there will only be one or two rises of the same level.

 Transitioning away from uncertainty

So, in summary, 2019 is set to be another big year for investors.

The recent protracted period of uncertainty has hit the markets hard, but we’ll have a clearer idea of what lies ahead in the coming months, particularly regarding Brexit and hopefully on the US and China’s trade relations too. If so, this greater certainty should pay dividends for investors in the years to come. UK equities are expected to strongly bounce back in 2019, which is a view that goes against the current consensus call.

Reed Finance asked senior finance professionals what they thought and Rob Russell, Director of Reed Finance, shares some of the key findings with Finance Monthly.

The need to invest in the development of staff should be a top priority for any organisation. Employees who feel supported and have the opportunity to extend their skill sets are more likely to remain with a business, which in turn can benefit from a stable and committed workforce.

Skills development within the finance sector is a current hot topic with the acknowledgement of a growing skills gap, not helped by the uncertainty surrounding Brexit’s impact on the labour market. A skills gap that is not addressed will lead to a lack of competiveness as companies struggle to fill important roles with qualified staff.

We polled 600 senior finance professionals to gauge their opinions around staff development, what could be holding firms back from investing further, and the important areas requiring a skills development and training focus.

However, it is important to look at the type of skills needed for a successful career in finance. Our recently published interactive report ‘State of Skills’ analysed Google and O*NET data from the past 10 years for typical accountancy and finance roles. It found that written and verbal communication is prized by employers of finance professionals. This could be due to the future strategies of companies wishing to see finance executives take on leadership roles which entail not only technical soundness, but also an ability to inspire and work as a leader of teams – with ‘active listening’ and ‘oral comprehension’ some of the most important skills for a CFO to have.

We were also interested in where finance leaders thought skills gaps were, and how they were planning to tackle them. We polled 600 senior finance professionals to gauge their opinions around staff development, what could be holding firms back from investing further, and the important areas requiring a skills development and training focus.

1. Current status

When asked to describe their organisation’s current status when it comes to investment in skills and training, about two thirds believe that the level was adequate for their company needs.

However, 35% of those questioned said that the investment levels were not high enough, and when asked why this was, they answered that there were ‘other business priorities’ to take care of first. This could be a false economy for such organisations, as this direction of travel will inevitably lead to an under skilled and, perhaps, demotivated workforce and all the subsequent issues this would create.

2. The training barriers

Questioned on the potential barriers that mean training investment is not what it should be, a number of constraints were cited. Chief among them was the belief that budgets are tight and training resources under pressure within their organisation. This was followed by an admission that time pressures were too great to allow more focus on staff development.

Interestingly, a quarter said there is no guarantee that staff would remain with the organisation once they had been trained and the investment in time and resources would be effectively wasted. This is a pessimistic outlook when the converse could be argued. Employees could be more predisposed to stay with a business that is prepared to help support and develop them. Unenthusiastic employees and apprenticeship levy issues were also highlighted as barriers, but only by a few finance professionals.

Interestingly, a quarter said there is no guarantee that staff would remain with the organisation once they had been trained and the investment in time and resources would be effectively wasted.

3. Areas of focus

The current advancement in new technology and software across the sector was identified by respondents as a vital area for training. As more organisations invest in growing technological capabilities, the need for employee training to optimise their potential needs to increase. This area of employee development was, by some distance, the most strongly articulated in the research findings, outstripping the more traditional areas of skills training such as accounting information, auditing, financial accounting and tax accounting.

It would appear that a focus on supporting staff as new technology enters the sector should become a top business priority both to meet business need as well as employee demand.

4. The role of training

Asked what they believe the role of training to be within an organisation, three views dominated the answers. There was general consensus that the purpose of training is to improve overall company efficiency, as well as enhance individual skillsets for the general good of the organisation. These two opinions were closely followed by a need to retain staff and to have better career progression internally.

With the current uncertainty around Brexit and its potential threat to the availability of skilled migrant workers, there is a pressing need for British business to develop and nurture its own talent pool.

Some stated that a proactive training-centric business philosophy leads to the creation of a positive company culture. This not only retains staff, but can act as tangible attraction when it comes to the task of attracting new talent in the face of increasing competition.

With the current uncertainty around Brexit and its potential threat to the availability of skilled migrant workers, there is a pressing need for British business to develop and nurture its own talent pool. By valuing employees and supporting them to grow in their roles, businesses can enhance their reputation, become an employer of choice for those seeking new positions, and be rewarded with a lower employee turnover that creates a more stable platform for the rest of the company.

This has stemmed from the fact that in recent years, diesel has come in for a lot of scrutiny recently due to the levels of Nitrogen Oxide our vehicles emit. So much so that the government in the UK proposed plans to ban any sales of new diesel and petrol vehicles by 2040 as they try to clean the nation’s air quality.

We are currently being encouraged to make the transition over to electric and hybrid vehicles, but just what effect will this have on traditional fuel sources? Lookers, who offer a variety of car servicing plans, explore what the future of fuel looks like for the UK.

Will the prices of fuel fluctuate?

The reported on the yo-yo affair of fuel prices in the UK and noted a number of influencing factors. Brexit and harmful emissions to UAE conflict, have meant that fuel prices haven’t been steady for some time now – and a plan to eliminate petrol and diesel cars will not help steady the cost of fuel either.

After witnessing a three-year high in how much petrol and diesel was costing on the UK’s forecourts, the RAC and other industry experts have encouraged supermarkets to reduce their fuel prices to make the public be able to afford the fuel type. At the start of 2018, three of the UK’s leading supermarkets had listened to the RAC’s call for lower fuel prices, and reduced fuel prices by up to 2p per litre as of February 2018.

RAC fuel spokesman, Simon Williams, stated: “Both petrol and diesel are now at their highest points for more than three years which is bound to be making a dent in household budgets.”

“Both petrol and diesel are now at their highest points for more than three years which is bound to be making a dent in household budgets.”

In 2014, the OPEC made a decision to increase the level of domestic fuel production in the UK, which led to a price drop to 98p in January 2016 — the lowest price of fuel per litre since the financial crisis in 2009. However, the UK still heavily relies on imported energy and fuel – around 38% of the UK’s total energy consumption is reliant on imported energy. Could our trading relationships be at risk after Brexit? And, of course, we must also consider how the uncertainty around the value of the pound could affect fuel costs following Brexit.

Immediately following the UK’s decision to leave the EU, the value of the pound experienced a fall of 20% against the dollar. This caused fuel prices to increase by around 10p per litre and experts to raise concern that Brexit could mark the end of cheap fuel in Britain. The combination of higher crude oil prices and the devaluation of the pound mean Britain should expect higher fuel prices become the norm.

Electric Charging Hubs

You may know that the market of electric vehicles has been criticised since the mobile was launched.  This has been due to a lack of EV charging points raising concern for many drivers, but could a transition towards electric and hybrid vehicles see us eventually wave goodbye to traditional fuel?

Following in the footsteps of other countries around the globe, like New Zealand who are rolling out easier-to-find charging stations, in the past 12 months, the UK’s electric car charging infrastructure has evolved substantially to suit the lifestyles of many drivers with many more EV charger installation points appearing. The UK also has over 20 companies and organisations installing and running nationwide or regional electric car charging networks.

The UK’s electric car charging infrastructure has evolved substantially to suit the lifestyles of many drivers with many more EV charger installation points appearing.

BP have also stated that they would be adding an increased number of charging points for electric vehicles into their UK fuel stations within the first few months of 2018. Oil firms are also recognising the potential for growth into the battery-powered vehicle market. A decision that follows in the footsteps of their rival, Shell, who have already invested money in several electric car infrastructure companies to install charging points at their service stations. According to The Guardian, the British oil firm, BP, is also investing $5 million (£3.5 million) in the US firm Freewire Technologies, which will provide motorbike-sized charging units at forecourts to top up cars in half an hour.

Tufan Erginbilgic, chief executive of BP Downstream, commented: “EV charging will undoubtedly become an important part of our business, but customer demand and the technologies available are still evolving.”

A multimillion-pound deal with ChargePoint saw InstaVolt installing at least another 3,000 rapid charging points across fuel station forecourts across the UK. Some researchers have also claimed they could have developed an ‘instantly rechargeable’ method that recharges an electric battery in the same time as it would take to fill a gas tank – a solution to one of the biggest headaches of electric vehicles.

2017 turned out to be a record year worldwide. In November 2017, global figures hit three million for the number of electric vehicles collectively on the roads – with China proving to dominate the market. Whilst oil firms such as BP expect the electric market to continue to rise, they hope the oil demand is not seriously affected – by cutting themselves a slice of the electric vehicle charging cake though, firms are covering their back if traditional oil demand does take a dip in line with the government’s plans to reduce harmful emissions and cut back on crude oil prices.

While fuel’s cost looks like it’ll be uncertain for the foreseeable, it appears that both the high fuel prices and efforts to improve the UK’s air quality will cause the EV market to increase and success is forecast to continue to surge in the years leading up to 2040.

Sources:

This is according to Henry Umney, CEO of ClusterSeven, as he offers his views on the regulatory and risk management trends in the banking and financial services industry for 2019.

Brexit will confound banks in 2019, whatever the outcome

The UK’s departure from the EU at the end of March will continue to have a significant impact on the banking, insurance and asset management sectors throughout 2019, almost regardless of the nature of the final departure. Brexit uncertainty is presently forcing banks to implement their most stringent contingency plans, in terms of re-locating critical business services, processes, and in extremis, specific roles and personnel. To this end, division of data, processes and responsibility need to be managed carefully to ensure these changes are executed smoothly, efficiently and with full auditability. Further complexity is provided by the UK’s Prudential Regulatory Authority’s (PRA) announcement that institutions will be able to continue to trade as branches of their head office, rather than as a (more capital intensive) subsidiary post-Brexit. This, alongside the European Banking Authority’s (EBA) recent announcement that it sees ‘back to back trading’ between the City of London and the EU as beneficial, suggests that there is a willingness to find a modus vivendi that allows complex cross-border transactions and business processes to continue as normal, almost regardless of the final Brexit outcome.

This complex, conflicted environment will place a premium on understanding how disparate business processes and applications, including how end user supported processes (e.g. using spreadsheet-based applications) are configured, allowing institutions to respond quickly to new developments – and potentially even reversing previous decisions about re-locating people, roles and business units.

Regulators and auditors will demand mature model risk management

In the US, the momentum for a mature approach to model risk management will gather further pace as government frameworks including SR 11 7, CCAR/DFAST stress testing and CECL, for example, are more closely scrutinised and audited by regulators. Increasingly these governance frameworks are being extended to include the tools that feed the models and there is recognition of the significance of the spreadsheets and other end user supported applications to the models covered by these frameworks.

This approach to sophisticated model risk management will find favour with European regulators too, a trend that is already in motion with regulations such as TRIM and SS3/18. This is fundamentally driven by regulators’ collective objective of demanding visibility of critical models and enhancing the operational resilience of financial institutions. Effective data management, including that stored in spreadsheet-based and other end user supported applications, is central to these frameworks.

To meet the excellence in data governance and auditability as demanded by the regulators in the UK and US, financial institutions will be forced to apply the same level of controls to their end user supported application environment – as they apply to their broader corporate IT environment. This reflects that spreadsheets are often the ‘go to’ tool in developing a broad range of business and financial models.

The transition away from LIBOR will present a major operational challenge

Due to the enormity of the transition from LIBOR (London Interbank Offered Rate) to alternative reference rates (e.g. SOFR, Reformed SONIA SARON, TONAR), financial institutions will begin adjusting their processes and systems, in preparation for the switch to new reference rates by the end of 2021. The clock is ticking.

With a parallel universe of spreadsheets connected to enterprise systems such as risk, accounting models and a plethora of non-financial contracts, financial institutions will need to ensure that the relevant changes are also accurately reflected in the spreadsheet-based processes. Given the broad range of potential alternatives to LIBOR, it seems possible that multiple replacements may be in use in different jurisdictions. There will be a premium on being able to identify transactions and contracts quickly and efficiently, and applying the appropriate reference rate, quickly, efficiently – and again with full transparency and auditability.

GDPR has the hallmarks of expanding into a global framework, its compliance will need to be in organisations’ DNA

GDPR has all the makings of becoming a global standard. Already, California is taking the lead with the California Consumer Privacy Act (CCPA), which comes into force in 2020. Other US states are also considering similar regulations to protect the rights of their residents.

With a fine of $1.6 billion levied on Facebook this year, the EU has clearly demonstrated that it means business. In 2019, organisations will have to shift their GDPR focus to ‘sustainable compliance’. They will realise that inventorying IT systems for GDPR-relevant and sensitive data was merely a good first step to meet the compliance requirements on 25 May 2018. GDPR compliance will need to part of their DNA – requiring it to be a ‘business as usual’ activity. With unstructured confidential data (e.g. personal details of clients and employees) often residing in spreadsheets, visibility alongside continuous monitoring, controls and stringent attestation of information will be essential to meeting GDPR demands such as the right to be forgotten and data portability. Automated spreadsheet management will become critical to sustaining GDPR compliance.

According to the Independent, many companies are struggling to decide on importing and exporting in light of confusion over the direction Brexit will take businesses.

But what is the current state of the nation’s trading with the wider world? In this article British brand Gola, that is renowned for its classic trainers, take an in-depth look at the UK’s imports and exports, from the items we sell the most of to what we’re buying in, as well as which countries are our top import and export locations.

Terminology rundown

With so much talk in the tabloids and newsrooms about trade and Brexit, you might be wondering what some or all of the terminology springing up means.

Before we delve further into what the UK has to offer in terms of trade, let’s break down some of the terminology:

• Import and export — an easy one to start with, imports are items and goods we buy into the country. Exports are items and goods we sell to other countries.
• Trade deficit and trade surplus — these two terms come under the umbrella of the balance of trade. It is essentially the difference between monetary value of a country’s exports and imports. If a country is importing more goods than it is exporting, then the country has a trade deficit. A trade surplus occurs if a country is exporting more than it is importing. Generally, a trade deficit is considered concerning as it is seen as the country being unable to produce enough goods to supply its people, requiring them to import more.
• “Special relationship” — The oft-cited “special relationship” with the US boils down to our trade relationship. In 2016, the UK exported £100 billion worth of goods and services to the US, running a trade surplus with the US of £34 billion.
• Single market — The European Single Market is a single market that guarantees the free movement of goods, services, capital, and labour within the EU.
• Customs Union — A customs union is where a group of states or countries agree to charge the same import duties to each other.

It is important to note that, regarding the “special relationship” with the US, the UK does export more to the US than any other country. However, when considering the EU as a whole with the same trade laws etc, rather than 27 separate countries, the EU imports more from the UK than the US by far.

What are we exporting?

According to the Observatory of Economic Complexity (OEC), in 2016 the UK’s top export item was cars, which accounted for 12% of the overall $374 billion export value that year. One of example of this is the world renowned Mercedes-Benz, which offer a variety of cars, including the Mercedes Gle.

Other popular UK products were gas turbines (3.5%), packaged medicaments (5.2%), gold (4.0%), crude petroleum (3.4%), and hard liquor (2.1%).

We also export a fair amount of food and drink, with items such as whisky and salmon popular abroad.

The BBC also points out that exports and imports are not just physical goods. In this digital age, it’s easier than ever to offer services as exports too, and the UK does just that, via financial services, IT services, tourism, and more.

Where are we exporting to?

In 2016, our top export destinations were:

1. United States (14%)
2. Germany (9.5%)
3. The Netherlands (6.0%)
4. France (6.0%)
5. Switzerland (5.1%)

China, one of the countries the UK is eyeing up for a potential trade deal after Brexit, accounted for 5%. Again, it is worth considering that Europe as a whole accounted for 55% of our top export destinations.

What are we importing?

We are importing rather similar items as we’re exporting. Top imports into the UK in 2016 included gold (8.2%), packaged medicaments (3.1%), cars (7.8%) and vehicle parts (2.5%).

Where are we importing from?

For 2016, the top origins of the UK’s imported products were:

1. Germany (14%)
2. China (9.8%)
3. United States (7.5%)
4. The Netherlands (7.3%)
5. France (5.8%)

The UK’s trade deficit

Despite our popular products, the nation is sitting with a trade deficit to the EU — we import more from the EU than we sell to the EU. In 2017, we exported £274 billion worth to the EU, and imported £341 billion’s worth from the EU. In fact, the only countries in the EU that bought more from us than we bought from them were Ireland, Sweden, Denmark, and Malta. Our biggest trade deficit is to Germany, who sold us £26 billion more than we sold to them.

The UK also has a trade deficit with Asia, having sold £20 billion less in goods and services than we bought in.

As previously mentioned, we have a trade surplus with the United States, as well as with Africa.

A trade deficit is generally viewed in a poor light, as it is basically another form of debt: the UK imported $88.4 billion from Germany in 2016. Germany imported $35.5 billion from the UK, making a difference of $52.9 billion owed by the UK to Germany.

With uncertainty abound about the impact of Brexit on imports and exports, it remains to be seen how UK businesses will continue to trade abroad, and if focuses will shift.

Sources:

https://atlas.media.mit.edu/en/profile/country/gbr/

https://www.ons.gov.uk/businessindustryandtrade/internationaltrade/articles/whodoestheuktradewith/2017-02-21

https://www.bbc.co.uk/news/business-41413558

https://www.independent.co.uk/news/business/news/brexit-uk-imports-exports-uncertainty-british-import-export-business-a8589796.html

https://www.investopedia.com/articles/investing/051515/pros-cons-trade-deficit.asp

https://fullfact.org/europe/what-trade-deficit-and-do-we-have-one-eu/

https://www.dw.com/en/is-germanys-big-export-surplus-a-problem/a-18365722

Investors are rapidly losing confidence in the government’s ability to secure a good Brexit deal, according to new data from Assetz Capital’s Q3 Investor Barometer.

The peer-to-peer business lender carries out its Investor Barometer every quarter, a survey of its 29,000-strong investor community.

The Investor Barometer has tracked Brexit sentiment since the start of 2018, and as the UK’s withdrawal gets closer, confidence of a positive outcome to the negotiations has dropped. In Q3, only 10% were ‘confident’ or ‘very confident’ of a good deal. This is down from 20% in Q2 and 21% in Q1.

Conversely, the number of ‘not confident’ or ‘not at all confident’ has continued to rise. The figure hit 90% in Q3, up from 80% in Q2 and 79% in Q1.

The results come following Chancellor of the Exchequer Phillip Hammond warned that a no-deal Brexit would lead to ‘large fiscal consequences’.

Stuart Law, CEO at Assetz Capital said: “Whatever optimism our investors had around the Brexit negotiations is slipping away. The view from the Assetz Capital community is that there’s significant economic pain on the horizon.

“Post-withdrawal, it will be more important than ever that the whole alternative finance industry works hard to deliver for both investors and borrowers. It’s when the economy struggles that growth capital becomes even more scarce. Peer-to-peer lenders must stand up and support the country through this Brexit uncertainty.”

(Source: Assetz Capital)

What are really the concerns, risks or benefits of incoming Brexit changes? Below Finance Monthly hears from Todd Latham, CMO & Head of Product, Currencycloud, who explains what’s truly rocking the fintech sector.

Am I the only one who has had enough of all the “Brexit is coming; the UK is doomed” headlines dominating the news?

The truth is, no one can really know what impact Brexit will have. Combine this uncertainty with the fast pace of modern business, and you might be tempted to throw your ten year plans out of the window.

Should businesses really be worried? Or are there, in fact, more pressing things to be concerned about?

The concerns

The main concern for the fintech industry post-Brexit is that the UK is going to lose its fintech crown, becoming less attractive to both business and workers. Will companies migrate their head offices to the continent? Will the world’s top talent still want to work in the UK? These are the questions keeping some of our fintech leaders awake at night. In reality, contrary to what the scaremongers would have you believe, the fintech industry in the UK is thriving, with firms attracting close to £3bn in venture capital funding in 2017. At Currencycloud, for example, we are expecting to double in size this year, and we had our first ‘billion-dollar month’ in terms of cross-border payments processed in December 2017.

Despite the rocky political times, it’s clear that the strength of fintechs means they are unlikely to be deterred. In addition, our home talent pool is impressive, and many industry essentials are exclusive to the UK. Whether it’s specialised legal firms, a friendly regulatory environment or something as basic as the time zone, there are many factors that are difficult for other nations to replicate, meaning the influx of job seekers to the UK’s fintech sector is unlikely to be affected.

But unfortunately, Brexit will not be all plain sailing. The regulatory and financial hurdles surrounding the loss of passporting will certainly result in logistical challenges for firms operating out of the UK. However, it’s important to see this as just another bump in the road for the fintech industry – no more so than previous obstacles from regulation and investment.

What is clear is that in this volatile business climate, predicting what effect Brexit will have in the future is a minefield of speculation, and ultimately, a waste of time. Instead of worrying about the what-if’s, the sector should be diverting its attention to a regulation that is affecting the industry right now: open banking.

Open banking – The fintech revolution nobody knows about

Open banking, part of the Second Payment Services Directive (PSD2) requirements, is aimed at increasing opportunity in the sector, as fintech companies can now offer traditional banking services – but with a faster, more seamless and exciting user experience.

Fintechs can provide the fresh ideas and agility the banking sector desperately needs, while capitalising on the customer trust and ability to scale the traditional institutions’ offerings. The regulation also ensures that any third party wishing to have access to customer data is subject to greater regulation in accordance to data protection laws - providing a safety net for businesses and customers.

A potential partnership between UK banks and fintechs, if executed correctly, could see a global revolution of the financial industry, and could lend a hand in securing the UK’s place as a top competitor in the market - regardless of EU status.

Innovate – before it is too late

As well as being a safety net for businesses, the key reason open banking is being hailed a monumental change for the fintech and wider financial sector is because it is enabling innovation in a previously stale market and is creating opportunities for fintechs to capitalise on.

In this age of AI and machine learning, customers have grown to expect a level of personalisation, which the traditional banking industry currently lacks as is shown by growing customer interest in alternative banking methods, such as Revolut, Starling and Monzo.

Open banking presents an opportunity for the sector to respond to these customer demands by tailoring traditional banking services to individual customer’s needs and wants. This could be through things such as detailed spending graphs or gamification techniques such as nudging for improved user behaviour.

Although the benefits are clear, this drive for innovation has created a pressured environment for businesses. Our research found that 49% of businesses believe their offer will lose appeal within just two years from launch and 60% of businesses agree that their companies will eventually become irrelevant if they don’t innovate constantly. Working with external organisations could offer businesses a solution to bridging the gap between idea and action. This is where the partnership between banks and fintech could be beneficial for both parties.

Brexit may, or may not, have an impact on where consumers bank down the line – but fintechs should be focusing their attention on the possibilities in the market now. By investing the time and energy on open banking, the fintech sector could have the public shunning high-street bank branches for AI and robo-advisers sooner than we think.

Change is happening – be it political, regulatory or otherwise – but you must determine which change will have the most impact on your individual business. With all the focus on Brexit, it’s easy to understand why less consideration has been given to the impact of open banking regulation. However, perhaps this is where you should be diverting your attention, as the opportunities are endless. As more and more fintech companies are jumping on the bandwagon, the initiative is picking up momentum and, we believe it will soon transform the banking industry as we know it.

Ever since the UK’s decision to leave the EU was announced, there has been a lot of speculation surrounding what will happen to the Irish border. Northern Ireland is part of the UK, which would leave the EU when Brexit goes through, but the Republic of Ireland will remain in the EU. This has led to many calls for border controls between the countries. It’s generally agreed that customs checks on goods will be required, yet whether passport checks are needed remains debatable. Recently the Chancellor of the Exchequer has suggested using blockchain to solve the issue.

In this post, we assess whether implementing blockchain will solve the Irish border issue. We conclude that it’s highly unlikely that blockchain alone will solve the problem, but a solution that incorporates blockchain as part of the process is more likely.

Why Blockchain?

The current line from the Treasury according to one source is that they are ‘actively considering technologies that could help facilitate trade over the Northern Ireland – Ireland land border.’ This was confirmed by Chancellor Phillip Hammond, who, when asked about how the government could achieve smooth trade after Brexit announced “there is technology becoming available ... I don’t claim to be an expert on it, but the most obvious technology is blockchain.”

Yet there are a few theories as to how blockchain could be involved practically. That’s not so surprising, as the only real major use of blockchain so far has been to power the cryptocurrency bitcoin.

What Could Blockchain Do?

Essentially, blockchain is a decentralised ledger which stores a digital record of transactions which is tamper proof. There have been a number of companies that have started to apply blockchain technology to their supply chains, with the most common reason to keep track of goods. One such example is of a start-up that used blockchain to track its tuna stock, every time it changed hands from net to supermarket the blockchain was updated.

This could be applied to the Irish border for documenting the movement of British goods through the supply chain, as a way to verify compliance with the EU’s rules. Checking blockchain certifications should be more efficient than paper ones, but it will be slower and it’s still unclear what other benefits this could hold.

Are There Any Other Options?

Presumably there are other options, given that the Treasury has revealed barely any details as to how blockchain might be applied. Especially as research into dealing with 6,000 heavy goods vehicles per day crossing the border has shown that using blockchain as a solution is ‘untested or imaginary’.

There’s still a chance that there won’t be a hard border and no technological solution will be required. Until the logistics and exact requirements are sorted out, it remains to be seen what will happen in terms of a solution.

Will it Be Successful?

According to most experts who have thought about the logistics of using blockchain to solve the Irish border issue, probably not. However, a solution that includes blockchain in part could be possible.

Indeed, in an interview with Cointelegraph, Vili Lehdonvirta, an associate professor and senior research fellow at the University of Oxford stated that “in my assessment there is zero chance that blockchain technology will help deliver a ‘frictionless’ border between Northern and the Republic of Ireland.”

Added to this, Nick Nick Botton, an expert on trade affairs and digital economies at Landmark Public Affairs stated that “The Northern Ireland issue is sadly not one that will likely ever be solved via technology, it's strictly a political issue at this stage.”

For businesses whose model relies on importing and/or exporting over the Irish border, seeking out financial options in case plans to use blockchain or other technology to sort out the issue fails is a good idea. Currently, it seems like there isn’t much of a plan, but that should all change in the near future.

To hear about tax planning and the things that need to change in the UK tax legislation Finance Monthly speaks with Adele Raiment, Director of the Tax Advisory team that specialises in entrepreneurial and privately owned businesses at Mazars LLP. Adele’s main area of expertise is working with privately owned businesses to develop and implement a succession plan, to ensure that any assets that the shareholders wish to retain are extracted in a tax efficient manner and she also works with all parties to assist in the smooth running of transaction.

What are the typical challenges faced by shareholders of entrepreneurial and privately owned businesses in the UK, in relation to the management of their finance?

I think the main concern on the horizon is the potential impact of Brexit on the UK economy and business confidence more widely. For privately owned businesses in the UK, many are still very cautious following the 2008/09 recession, and with the uncertainties surrounding Brexit, it is difficult to plan too far ahead. One of the main priorities of shareholders is ensuring that they have sufficient cash reserves to ride any potential downturn in the economy whilst recognising that they need to invest and innovate to thrive.

What is your approach when helping clients with tax planning?

My approach is to primarily understand the client’s commercial and personal objectives in priority to considering any tax planning. When planning for a transaction, I frequently find that the most tax efficient option isn’t always going to meet the key objectives of the shareholders or the business. It is important to consider the shareholders and the business as one holistic client, and therefore strike the right balance between personal, commercial and tax objectives. In respect of tax specifically, it is important to take all relevant taxes in to consideration whether it be corporate or personal. A good understanding of all taxes is therefore required.

My clients vary from FDs, to engineers, to self made entrepreneurs - all requiring different approaches. I believe that it is fundamental to get to know your client and adapt your approach to ensure that they understand you and what you are trying to achieve.

What are some of the day-to-day challenges of operating within tax planning? How do you overcome them?

As I predominantly work on transactions, I often work very closely with other professionals such as corporate finance professionals, lawyers and other accountants. The key challenge to this is making sure that the whole team is working collaboratively to achieve the best result for our client.

We are also under pressure to keep costs down, whilst ensuring that we provide quality advice. This can be difficult if the team has multiple transactions on the go at the same time and senior resource is constrained or if the project is wide-ranging, requiring several specialists to input in to the advice. The key to this is having a driven and supportive team, where teamwork and openness is pivotal to success. The working environment of my team at Mazars is incredible as we encourage open discussions on a variety of areas but one of the most useful ones is on technical uncertainties, which encourages consultation in times of uncertainty and technical development.

In your opinion, how could UK tax legislation be altered for the better?

Despite an exercise to ‘simplify’ UK tax legislation over more recent time, the legislation has increased in volume. A good example of this is that there are now two separate corporation taxes acts, when previously there was one. Having said this, the majority of the language used in more recent acts has made the legislation more user-friendly. However, there are still pockets of the legislation that seem to have been rushed through parliament and the practical use of the legislation was not considered fully prior to being enacted. This has resulted in several pieces of legislation being amended a year or two down the line. Although there does seem to be an element of consultation between Practice and HMRC prior to some legislation being enacted, I’m not always convinced that HMRC take on board the feedback. I therefore feel that a more rigorous consultation process should become standard to ensure that the commercial and practical elements of legislation are considered prior to enactment.

Contact details:

T: +44 (0) 121 232 9583/ M:+44 (0) 7794 031 399

Website: www.mazars.co.uk

Email: adele.raiment@mazars.co.uk

LinkedIn: http://uk.linkedin.com/pub/adele-raiment/13/693/360

Email: adele.raiment@mazars.co.uk

LinkedIn: http://uk.linkedin.com/pub/adele-raiment/13/693/360

The UK’s passion for innovation means it is now seen as a global leader in the development of financial services that are powered by prepaid technology, according to data released by Prepaid International Forum (PIF).

PIF, the not-for-profit trade body representing the prepaid sector, reports that the percentage of UK adults using tech-based financial services has risen to 42% (up from 14% in 2015). The UK is at the forefront of this growing market in Europe, ahead of Spain (37%) and Germany (35%). The UK is third globally to only China (69%) and India (52%).

Fueling this growth in the UK is prepaid, which has become a driving force for the fintech companies who are rapidly transforming the way we pay and get paid. The prepaid sector in Europe is growing faster than anywhere else in the world (up 18% since 2014 compared to just 6% growth in the US) is now worth $131bn*.

Experts believe that the UK’s passion for innovation may help to offset the potential negative effects of a no-deal Brexit, should UK financial service providers lose its right of automatic access to EU markets.

Diane Brocklebank, spokesperson for PIF, says: “The UK is a globally significant player in the creation of prepaid-enabled financial services with consumers keen to adopt new and innovative services and a growing industry of experts with the knowledge needed to develop such products and bring them to market.

“In a global sector, the UK stands out as being a key market and one that should retain its prized status even if it loses its financial passporting rights as a result of a no-deal Brexit.”

The UK’s status in prepaid is significant as it is a sector that is growing much faster than other financial services. In Europe, the 18.6% growth in prepaid since 2014, compares to just 7.8% growth in consumer debit and 5.8% growth in consumer credit markets*.

Diane Brocklebank, continues: “Prepaid and Fintech are the areas where people looking to invest in financial service businesses are seeing the most potential. This is being driven by increased dissatisfaction with mainstream financial services and a desire for greater innovation and flexibility, particularly amongst consumers looking for lower costs and fees as well as smartphone accessible products.

“The UK’s status as a global player is therefore crucial to it continuing to be seen as a key market for such investment. To maintain this, it must continue to be a positive environment for innovation with a supportive regulatory environment and strong skills base.”

(Source: PIF)