3rd May 2013
1) Apple has raised an eye-watering $17bn in a bond issue in the US bringing a not insignificant increase in the investing universe for fixed interest managers. As Mashable explains this will help pay for its huge share buyback plans. But why would the cash rich firm do this? Most of its famed cash pile is in foreign bank accounts and were it to repatriate it to the US it would incur a big tax bill. Hence the manoeuvre. So it’s good news for bond investors. We’ll wait to see what it means for equity investors medium term but sentiment is positive.
2) The UK, having avoided a triple dip recession, maybe never had a double dip in the first place. The Guardian reported this week that the statisticians at the ONS are now suggesting the economy has been flat since 2010. Not great in any case. Mindful Money contributor and Henderson chief economist Simon Ward has been saying we may not have ‘double dipped’ for the last few months.
3) The European Central Bank has woken up to the fact that even core Europe – basically Germany – is faltering and cut its rate. But surely this action can only reinforce the impression that it doesn’t really care about the periphery. It’s benchmark rate is cut from 0.75 to 0.5 per cent but most strategists say this rate isn’t necessarily the important one and that at this level its impact is muted anyway. Headline to sum up – Small rate cut not many helped.
4) Fund manager BlackRock is not known for its particularly outspoken stance on many things. But the manager of the giant Gold & General fund Evy Hambro clearly has the courage of his convictions when criticising the behaviour of gold miners. He is optimistic about gold stocks prospects going forward but wants mine managers to mend their reckless financial ways. The quote reported on Mindful Money this week says it all. “Without change in the way these companies are run, they will end up grinding themselves down into the bottom of the pits in which they operate and will become barbarous relics of the past. They won’t be the gold producers of the future.”
5) Finally in a week full of reports that even more IFAs would fall by the wayside due to a shakeup in how they are paid, Mindful Money reports plans from Hargreaves Lansdown to deliver financial advice (not just information) to those with investment pots as low as £20,00o. The current level is around £50,000. For those of you who don’t want to ‘self-select’ as the financial jargon goes, and who are worried about finding a decent financial adviser without paying big fees, this could be very good news. This is clearly a trial period but it might be worth a call.