by Raymond Chatlani
On Monday, Asian stockmarkets closed mostly positive after Ireland yesterday applied for a bailout from the European Union and the International Monetary Fund to save its banks. This bailout is expected to be between 80 to 90 Billion Euros which is less than the Greek bailout earlier in May this year. European shares rose in the morning but fell into negative territory in the afternoon as investors waited to see the terms of Ireland's bailout. US indices closed mixed as a bailout for debt-soaked Ireland failed to allay fears of a wider euro zone crisis, prompting investors to seek safety in the U.S. dollar and Treasuries.
On Tuesday, Asian stockmarkets fell, following declines on Wall Street the previous day and after North Korean artillery fired dozens of shells onto a South Korean island near their disputed sea border, wounding several people, setting fire to buildings and prompting a return of fire by the South, Seoul's military and media reported. EU and US stocks, especially miners got hammered on Irish and Korean tensions.
Asian shares initially fell on Wednesday and the euro hovered near a two-month low to the dollar as regional stocks caught up with a sharp sell-off after North Korea's deadly shelling of a South Korean island and investors sought safety in the U.S. currency. However, Asian markets recovered at the close and were mostly in positive territory. European and US stocks gained on economic data as the US Government released a batch of reports on the economy. The government said first-time claims for unemployment fell 34,000 to 407,000 in the week ending Nov. 20 and that personal incomes rose 0.5 percent in October, slightly better than expected.
On Thursday, Asian markets were mostly higher in light trading as investors took heart from data showing an improving economic picture in the U.S. and signs that tensions had cooled at least temporarily on the Korean peninsula. European stocks rose in thin trade on last night's US data. US markets were closed for Thanksgiving.
This morning, Asian stockmarkets fell on worries about China tightening monetary policy to contain inflation, fresh artillery shots fired by North Korea on the disputed island amid warnings of war and fears that European contagion will spread to Portugal and Spain. Banks lead European markets down on the eurozone crisis with miners also losing ground on a strenghtening US dollar. US stocks fell on thin trade due to the long holiday Thanksgiving weekend.
A bad week for equities and commodities. Clearly, the Irish problem and fears that contagion will spread to Portugal and Spain, the uncertainty of when China will probably raise interest rates to control inflation and that North Korea has fired shells on a disputed South Korean island have all contributed to a strenghtening US Dollar against a weakening Euro this week and a flight to US treasuries. Also, trading has also been more volatile in the second half of this week due to US markets being closed on Thursday for the Thanksgiving holiday.
A bright spot this week was that first-time claims for unemployment fell significantly last week, incomes rose last month and consumer spending climbed for a fifth month in the USA. This raises hopes that shoppers will hit the malls in droves the day after Thanksgiving, the start of the holiday shopping season. These are fundamental signs that the US economy may be improving.
Will improving US data drive the markets forward or shall we continue to see this volatility due to the European debt crisis? Short term it is difficult to predict, but the USA is determined to devalue the US Dollar and we should see emerging markets and commodities eventually recover from this recent selloff.
Tuesday, November 30, 2010
Monday, November 22, 2010
Weekly Market Summary
by Raymond Chatlani
On Monday, Asian markets closed mixed shrugging off stronger-than-expected growth in Japan amid fears China will take new steps to cool its economy. The Japanese government said the economy expanded an annualized 3.9 percent in the July-September quarter. European markets fell in the early morning but turned into positive territory in the afternoon on news that Ireland was in talks with its European neighbours over how to deal with its financial troubles and on positive eurozone trade data. US stocks closed mixed following a jump in October retail sales and on fears that Ireland may seek a bailout.
On Tuesday, Asian stockmarkets fell as an interest rate hike in South Korea added to speculation China will also tighten monetary policy to cool inflation. Also, persistent concerns about the euro zone debt crisis kept investors cautious. Major European indexes fell on Irish debt woes with fears that this could spread to Portugal. US stocks slid following new worries about rising inflation in Asia and the possibility Ireland might need a bailout.
On Wednesday, Asian stock markets retreated Wednesday, extending a global sell-off triggered by Europe's simmering debt crisis and expectations China will raise interest rates again to tame inflation. European markets rose on optimism that Ireland's crisis may be resolved. US stocks were flat although core inflation, which excludes food and energy costs, climbed 0.6% from October 2009, the smallest rise on record.
On Thursday, Asian indices rose on soft US inflation and news that China would introduce price controls on food rather than an interest rate hike to control inflation. European stockmarkets rocketed on expectations that Ireland would become the second euro zone country after Greece to receive a bailout to cope with high debts and deficits. US stocks surged on expectations that Ireland will get a giant loan to ease its debt crisis and as US weekly jobless claims data were better than expected.
This morning, Asian markets closed mixed on good US weekly jobless claims data, fears of EU debt problems and news that the Chinese Government told banks they must hold more reserves. EU stocks fell on continued uncertainty as to the Irish debt problem as EU sources said that a financial aid plan to help Ireland cope with its battered banks will be unveiled next week. Wall street fell on China's raising of Bank's reserve ratios and worries that a financial rescue package for Ireland is proving more difficult to agree than expected.
This week markets and commodities fell on the Irish banks debt problems and Chinese inflation problems.
With the Irish problem still unresolved, investors have taken profit after two good months in the markets largely on fears that contaign will spread to Portugal and Spain. China ordered its banks to raise their reserve ratios to control inflation today. The move is aimed at cutting down on lending to avoid speculative bubbles and curb inflation. Inflation in China shot up to a more than two-year high last month. There is also growing expectation China will raise key interest rates soon as part of the inflation fight.
These events have given investors an excuse to take profits. The Irish problem should be resolved next week. The Chinese Government's policies should also help the economy from overheating. Short term we may well see markets continue to go down but over the medium term, we should see the US Dollar continue to slide and emerging markets including commodities appreciate.
The main threat that still remains is if the Irish debt problem remains unresolved as contaign will spread throughout the EU and the Euro could be at risk.
On Monday, Asian markets closed mixed shrugging off stronger-than-expected growth in Japan amid fears China will take new steps to cool its economy. The Japanese government said the economy expanded an annualized 3.9 percent in the July-September quarter. European markets fell in the early morning but turned into positive territory in the afternoon on news that Ireland was in talks with its European neighbours over how to deal with its financial troubles and on positive eurozone trade data. US stocks closed mixed following a jump in October retail sales and on fears that Ireland may seek a bailout.
On Tuesday, Asian stockmarkets fell as an interest rate hike in South Korea added to speculation China will also tighten monetary policy to cool inflation. Also, persistent concerns about the euro zone debt crisis kept investors cautious. Major European indexes fell on Irish debt woes with fears that this could spread to Portugal. US stocks slid following new worries about rising inflation in Asia and the possibility Ireland might need a bailout.
On Wednesday, Asian stock markets retreated Wednesday, extending a global sell-off triggered by Europe's simmering debt crisis and expectations China will raise interest rates again to tame inflation. European markets rose on optimism that Ireland's crisis may be resolved. US stocks were flat although core inflation, which excludes food and energy costs, climbed 0.6% from October 2009, the smallest rise on record.
On Thursday, Asian indices rose on soft US inflation and news that China would introduce price controls on food rather than an interest rate hike to control inflation. European stockmarkets rocketed on expectations that Ireland would become the second euro zone country after Greece to receive a bailout to cope with high debts and deficits. US stocks surged on expectations that Ireland will get a giant loan to ease its debt crisis and as US weekly jobless claims data were better than expected.
This morning, Asian markets closed mixed on good US weekly jobless claims data, fears of EU debt problems and news that the Chinese Government told banks they must hold more reserves. EU stocks fell on continued uncertainty as to the Irish debt problem as EU sources said that a financial aid plan to help Ireland cope with its battered banks will be unveiled next week. Wall street fell on China's raising of Bank's reserve ratios and worries that a financial rescue package for Ireland is proving more difficult to agree than expected.
This week markets and commodities fell on the Irish banks debt problems and Chinese inflation problems.
With the Irish problem still unresolved, investors have taken profit after two good months in the markets largely on fears that contaign will spread to Portugal and Spain. China ordered its banks to raise their reserve ratios to control inflation today. The move is aimed at cutting down on lending to avoid speculative bubbles and curb inflation. Inflation in China shot up to a more than two-year high last month. There is also growing expectation China will raise key interest rates soon as part of the inflation fight.
These events have given investors an excuse to take profits. The Irish problem should be resolved next week. The Chinese Government's policies should also help the economy from overheating. Short term we may well see markets continue to go down but over the medium term, we should see the US Dollar continue to slide and emerging markets including commodities appreciate.
The main threat that still remains is if the Irish debt problem remains unresolved as contaign will spread throughout the EU and the Euro could be at risk.
Friday, November 19, 2010
Hollingsworth Daily Post
- The Irish government has insisted it will not raise the country's low corporation tax rate in return for a European Union-led bail-out.Deputy Prime Minister Mary Coughlan said the 12.5% rate - much lower than the EU average - was "non-negotiable".Her comments come as speculation grows that France and Germany want Dublin to raise the tax in return for aid.The Irish government is in bail-out talks with officials from the EU, the European Central Bank and the IMF.An aid package is expected to emerge next week, according to an unnamed source quoted by the Reuters news agency.
- US Federal Reserve chairman Ben Bernanke has criticised countries like China that run large trade surpluses."Currency undervaluation by surplus countries is inhibiting needed international adjustment," he said in a speech to the European Central Bank.He said that by buying dollars, these countries were hurting the US recovery and the global economy with it.He also defended the Fed's policy of "quantitative easing", which has been criticised by China and Germany.Defending QE.China, Germany and others have attacked the Federal Reserve in recent weeks for its decision to purchase another $600bn of US government debt in a bid to stimulate the US economy.They say that the policy will unfairly devalue the dollar in currency markets, and that this could lead to inflation and asset bubbles elsewhere in the world.
- China's central bank has raised the amount of money that lenders must keep in reserve, as it moves again to try to control the country's high inflation.The People's Bank of China said the reserve ratio would go up by a further 0.5 percentage points on 29 November.It is the fifth time this year that the central bank has made such a move, and the second announcement this month.It comes after Chinese inflation hit a two-year high of 4.4% last week on the back of the fast-growing economy.The central bank hopes that increasing the level of funds Chinese banks have to keep in reserve will help to dampen inflation, as it will limit the amount of money the banks can lend.
- China's exports to Japan of rare earths could resume next week, the Japanese trade minister has said.Shipments of the minerals, vital for making a number of hi-tech products, have been halted by Beijing for almost two months.This came after the Japan's navy arrested a Chinese fishing boat captain near disputed East China Sea islands.Japan's Trade Minister Akihiro Ohata said he hoped shipments would now return to normal.He added: "I think the Chinese understand that stalled exports of rare earths to Japan would in turn have a big impact on China's production of computers.
- Further details have been released of the difficulties faced by the pilots of the Qantas A380 superjumbo that saw one of its engines explode.Airbus, the plane's manufacturer, has said that flying debris from the Rolls-Royce engine severed cables in the aircraft's wing.A separate report by the AP new agency said the explosion caused a series of system failures in the plane.The pilots made a successful emergency landing in Singapore on 4 November.Airbus made its comments in its latest report to airlines.
Thursday, November 18, 2010
Hollingsworth Daily Post
- Irish Central Bank governor Patrick Honohan has said he expects the Irish Republic to accept a "very substantial loan" as part of an EU-backed bail-out. Mr Honohan told RTE radio he expected the loan to amount to "tens of billions" of euros.The final decision will be up to the Irish government, which has yet to comment.Mr Honohan's comments come as a team of international officials meet in Dublin for further talks on the debt crisis.Representatives from the International Monetary Fund, the European Central Bank and the EU will meet the Irish government, which has denied that it has asked for aid.
- Shares in General Motors (GM) have risen 7% on the first day of trading following the carmaker's record public share offering.Shares rose to $35.53 in the first few minutes of trade in New York, having been priced at $33 by the company.GM raised $20.1bn (£12.6bn) through its offering, making it the largest share sale in the US to date.President Obama called the sale a "major milestone" for both the company and the US car industry.
- The Greek government has unveiled an austerity budget that aims to cut its 2011 public deficit to 7.4% of the nation's annual economic output or GDP.If achieved, this would mean a 5bn-euro ($6.8bn; £4.3bn) reduction on Greece's projected 9.4% deficit for 2010.Under the budget plans, the government will cut health and defence spending, and increase the sales tax on most retail items from 11% to 14%.Greece had to accept a 110bn-euro ($150bn; £93bn) rescue deal in May.
- Brewer SABMiller has reported a 13% increase in half-year profits, as sales growth in emerging markets offset a decline in Europe and North America.The owner of beer brands as Grolsch and Peroni made a pre-tax profit of $1.7bn (£1bn) in the six months to 30 September, up from $1.5bn a year ago.Revenues at SAB, whose headquarters is in London, rose 7% to $14.2bn.Its sales volumes were down 5% in Europe, but increased by 11% in Africa and by 10% in Asia.Sales in the US and Canada were 5% lower.
- The Paris Club of creditor nations has cancelled $7.35bn (£4.6bn) of debt owed by the Democratic Republic of Congo.The deal was agreed following a meeting between representatives of Paris Club members and senior figures from the DR Congo government.In a statement, the Paris Club said the figure represented more than half of DR Congo's foreign debt.It added that the DR Congo government had pledged more work to reduce poverty.
- An industry taskforce has called on the government to act to protect the UK economy against a new threat of rising oil prices.A consortium of British business, including retailers Kingfisher and transport group, Stagecoach, say the UK must prepare for the next oil shock.It says not to do so would present energy security problems.A barrel of oil is currently around $80 a barrel, well below the last peak of $145 two-and-a-half years ago.
BBC Business News 18th November 2010
Monday, November 15, 2010
Weekly Market Summary
by Raymond Chatlani
Global stockmarkets and commodities rocketed higher last week after the Federal Reserve announced on Wednesday that it would use $600 Billion over the next eight months ($75 Billion a month) to purchase medium term treasuries to keep interest rates low for the forseeable future. It looks like emerging markets and commodities will continue to appreciate over the next 12 months as this liquidity will probably enter these areas as investors continue to seek higher returns.
On Monday, Asian stocks closed mostly up as traders welcomed better than expected jobs data out of the United States on friday while sentiment was still up after the Federal Reserve's huge stimulus plan announced last week. European markets closed modestly down on Sovereign debt concerns as fears that nations will have difficulty cutting deficits resurfaced, while commodities slid on a strenghtening US Dollar. US stocks were dented by a stronger dollar. Gold climbed to an all-time record high for a third running day, powered by worries over Ireland's debt.
On Tuesday, gold hit a new high of $1,421 an ounce while silver appreciated to over $28 an ounce on eurozone debt fears. Asian stockmarkets mostly fell on profit taking after large gains last week. European shares rose on corporate results and miners as commodities recovered. Wall street fell on a stronger US Dollar as traders pared positions and booked some profits. Commodities all fell with gold falling below $1,400 an ounce and silver below $28 an ounce.
On Wednesday, Asian markets closed mixed with China, Hong Kong, India and Australia falling while Japan, Indonesia and South Korea all rose. European stocks fell as investors -- betting that the country soon could join Greece in seeking a bailout from the European Union -- drove the interest rate on the country's 10-year borrowing to a new high. today. US markets fell inspite of an unexpected drop in first-time claims for unemployment benefits as normally an upbeat jobs report would be enough to send stocks higher. Instead investors are focusing on an upcoming meeting of world leaders and as Europe continues to grapple with government debt problems.
This week, markets and commodities gave up some gains as the US Dollar strenghtened. Investors are also scared that a new debt crisis is brewing in Europe, especially in Ireland. Also, this week's meeting of the G20 is not going well with Governments' disagreeing as to what action to take to aid the global economy. The G20 statement will be released at the end of their meeting this Friday.
Could this be the start of a bear market? If there is a serious credit crisis in Europe, then it could materalise, but It is very doubtful as the Greeks were in a worse position in spring. Also, the markets have run up too fast over the past two months and a period of consolidation is required.
Global stockmarkets and commodities rocketed higher last week after the Federal Reserve announced on Wednesday that it would use $600 Billion over the next eight months ($75 Billion a month) to purchase medium term treasuries to keep interest rates low for the forseeable future. It looks like emerging markets and commodities will continue to appreciate over the next 12 months as this liquidity will probably enter these areas as investors continue to seek higher returns.
On Monday, Asian stocks closed mostly up as traders welcomed better than expected jobs data out of the United States on friday while sentiment was still up after the Federal Reserve's huge stimulus plan announced last week. European markets closed modestly down on Sovereign debt concerns as fears that nations will have difficulty cutting deficits resurfaced, while commodities slid on a strenghtening US Dollar. US stocks were dented by a stronger dollar. Gold climbed to an all-time record high for a third running day, powered by worries over Ireland's debt.
On Tuesday, gold hit a new high of $1,421 an ounce while silver appreciated to over $28 an ounce on eurozone debt fears. Asian stockmarkets mostly fell on profit taking after large gains last week. European shares rose on corporate results and miners as commodities recovered. Wall street fell on a stronger US Dollar as traders pared positions and booked some profits. Commodities all fell with gold falling below $1,400 an ounce and silver below $28 an ounce.
On Wednesday, Asian markets closed mixed with China, Hong Kong, India and Australia falling while Japan, Indonesia and South Korea all rose. European stocks fell as investors -- betting that the country soon could join Greece in seeking a bailout from the European Union -- drove the interest rate on the country's 10-year borrowing to a new high. today. US markets fell inspite of an unexpected drop in first-time claims for unemployment benefits as normally an upbeat jobs report would be enough to send stocks higher. Instead investors are focusing on an upcoming meeting of world leaders and as Europe continues to grapple with government debt problems.
This week, markets and commodities gave up some gains as the US Dollar strenghtened. Investors are also scared that a new debt crisis is brewing in Europe, especially in Ireland. Also, this week's meeting of the G20 is not going well with Governments' disagreeing as to what action to take to aid the global economy. The G20 statement will be released at the end of their meeting this Friday.
Could this be the start of a bear market? If there is a serious credit crisis in Europe, then it could materalise, but It is very doubtful as the Greeks were in a worse position in spring. Also, the markets have run up too fast over the past two months and a period of consolidation is required.
Wednesday, November 10, 2010
Weekly Market Summary
by Raymond Chatlani
Global stockmarkets and commodities rocketed higher last week after the Federal Reserve announced on Wednesday that it would use $600 Billion over the next eight months ($75 Billion a month) to purchase medium term treasuries to keep interest rates low for the forseeable future. It looks like emerging markets and commodities will continue to appreciate over the next 12 months as this liquidity will probably enter these areas as investors continue to seek higher returns.
On Monday, Asian stocks closed mostly up as traders welcomed better than expected jobs data out of the United States on friday while sentiment was still up after the Federal Reserve's huge stimulus plan announced last week. European markets closed modestly down on Sovereign debt concerns as fears that nations will have difficulty cutting deficits resurfaced, while commodities slid on a strenghtening US Dollar. US stocks were dented by a stronger dollar. Gold climbed to an all-time record high for a third running day, powered by worries over Ireland's debt.
On Tuesday, gold hit a new high of $1,421 an ounce while silver appreciated to over $28 an ounce on eurozone debt fears. Asian stockmarkets mostly fell on profit taking after large gains last week. European shares rose on corporate results and miners as commodities recovered. Wall street fell on a stronger US Dollar as traders pared positions and booked some profits. Commodities all fell with gold falling below $1,400 an ounce and silver below $28 an ounce.
On Wednesday, Asian markets closed mixed with China, Hong Kong, India and Australia falling while Japan, Indonesia and South Korea all rose. European stocks fell as investors -- betting that the country soon could join Greece in seeking a bailout from the European Union -- drove the interest rate on the country's 10-year borrowing to a new high. today. US markets fell inspite of an unexpected drop in first-time claims for unemployment benefits as normally an upbeat jobs report would be enough to send stocks higher. Instead investors are focusing on an upcoming meeting of world leaders and as Europe continues to grapple with government debt problems.
This week, markets and commodities gave up some gains as the US Dollar strenghtened. Investors are also scared that a new debt crisis is brewing in Europe, especially in Ireland. Also, this week's meeting of the G20 is not going well with Governments' disagreeing as to what action to take to aid the global economy. The G20 statement will be released at the end of their meeting this Friday.
Could this be the start of a bear market? If there is a serious credit crisis in Europe, then it could materalise, but It is very doubtful as the Greeks were in a worse position in spring. Also, the markets have run up too fast over the past two months and a period of consolidation is required.
Global stockmarkets and commodities rocketed higher last week after the Federal Reserve announced on Wednesday that it would use $600 Billion over the next eight months ($75 Billion a month) to purchase medium term treasuries to keep interest rates low for the forseeable future. It looks like emerging markets and commodities will continue to appreciate over the next 12 months as this liquidity will probably enter these areas as investors continue to seek higher returns.
On Monday, Asian stocks closed mostly up as traders welcomed better than expected jobs data out of the United States on friday while sentiment was still up after the Federal Reserve's huge stimulus plan announced last week. European markets closed modestly down on Sovereign debt concerns as fears that nations will have difficulty cutting deficits resurfaced, while commodities slid on a strenghtening US Dollar. US stocks were dented by a stronger dollar. Gold climbed to an all-time record high for a third running day, powered by worries over Ireland's debt.
On Tuesday, gold hit a new high of $1,421 an ounce while silver appreciated to over $28 an ounce on eurozone debt fears. Asian stockmarkets mostly fell on profit taking after large gains last week. European shares rose on corporate results and miners as commodities recovered. Wall street fell on a stronger US Dollar as traders pared positions and booked some profits. Commodities all fell with gold falling below $1,400 an ounce and silver below $28 an ounce.
On Wednesday, Asian markets closed mixed with China, Hong Kong, India and Australia falling while Japan, Indonesia and South Korea all rose. European stocks fell as investors -- betting that the country soon could join Greece in seeking a bailout from the European Union -- drove the interest rate on the country's 10-year borrowing to a new high. today. US markets fell inspite of an unexpected drop in first-time claims for unemployment benefits as normally an upbeat jobs report would be enough to send stocks higher. Instead investors are focusing on an upcoming meeting of world leaders and as Europe continues to grapple with government debt problems.
This week, markets and commodities gave up some gains as the US Dollar strenghtened. Investors are also scared that a new debt crisis is brewing in Europe, especially in Ireland. Also, this week's meeting of the G20 is not going well with Governments' disagreeing as to what action to take to aid the global economy. The G20 statement will be released at the end of their meeting this Friday.
Could this be the start of a bear market? If there is a serious credit crisis in Europe, then it could materalise, but It is very doubtful as the Greeks were in a worse position in spring. Also, the markets have run up too fast over the past two months and a period of consolidation is required.
Wednesday, November 3, 2010
Hollingsworth Daily Post
- The Federal Reserve will announce later its plans to stimulate the US economy, with expectations high that they will feature the reintroduction of so-called quantitative easing (QE).Many analysts expect the Fed to start pumping around $500bn (£310bn) into the economy to boost the fragile recovery.The economy grew by an annual rate of 2% between July and September - not enough to reduce high unemployment.Some analysts see QE as the last chance to get the US economy back on track.Interest rates are already close to zero, which means the Fed cannot reduce rates any further in order to boost demand - the more traditional policy used by central banks to stimulate growth.Instead, it is likely to announce a fresh round of QE, in which it would pump hundreds of billions of dollars into the economy by creating money to buy government bonds.The programme has been dubbed QE2, after the Fed pumped $1.75tn into the economy during the downturn in its first round of QE.
- Lloyds Banking Group says its new chief executive will be Santander UK's current boss, Antonio Horta-Osorio.He will replace the current chief executive of Lloyds, Eric Daniels, who is retiring, on 1 March.Lloyds, which is 41%-owned by the UK government, is Europe's fourth-largest bank by market value.The Portuguese banker's replacement at Santander UK will be Ana Patricia Botin, according to BBC business editor Robert Peston.
Lloyds' share price rose more than 3% on the news, to nearly 70p, following the announcement by the UK bank, while in Madrid, Santander's shares fell 1.4% before recovering slightly.Ms Botin is the daughter of Santander's chairman, Emilio Botin. She has worked for the bank since 1988, having previously worked at investment bank JP Morgan in the US.
BBC Business News 3rd November 2010
Investor Protection
By Mark Hollingsworth in Money Magazine
There is no doubt that the internet has opened the floodgates for potential investment scams. So called boiler room cold calling is common place and unlicensed financial consultants recommend investment products that offer no protection of capital. Sadly, many individuals, often those that can not take financial risks are taken in by these practices with serious financial consequences.
Before making any investment decisions, certain steps should be taken to quantify the advice and recommendations being received. Certain questions should be asked and backed up in writing before parting with your life savings. A legitimate investment recommendation must be supported by facts and you must be aware of the complaints procedure in the event that things unfortunately go wrong. You must be fully armed and prepared for all eventualities. The following list is aimed at helping you make the right investment decisions and from the right source :
Licensed and regulated advisors : If a firm claims to be offering you investment advice but is not authorised to do so then this should be an obvious reason not to proceed. A list of license holders can be found on the MFSA's website, www.mfsa.com.mt. There are approximately 75 license holders whose services include banking, insurance and investments. The category of the license holder is also very important as this can determine amongst other things whether the firm can handle client's money or can act with a delegated authority.
Investor protection : Are you aware of your rights if the advice that you have received turns out to be inappropriate or deemed bad advice ? Can you make a claim against the firm and do they have adequate Professional indemnity insurance to settle any potential claims ? We are very fortunate to have a specialist complaints unit within the MFSA whose role is to handle any consumer complaints. The unit also provides an education platform to assist both existing and potential investors. During 2009, the unit received 324 written complaints, 90 of which related to investments. In addition there were 39 verbal complaints and 147 consumer queries relating to investments. The role of the MFSA as arbitrator cannot be underestimated with a freephone helpline and dedicated consumer website www.mymoneybox.mfsa.com.mt as examples of the regulators commitment to helping investors.
Bank Protection scheme : Bank account holders in Malta are protected in the event that their bank fails up to €100,000. The need to spread your cash deposits across more than one bank is therefore advisable if your cash wealth exceeds this limit. The collapse of certain Icelandic banks in 2008 is still very fresh and severe lessons have been learned by savers who have deposited their savings with banks who offer headline grabbing rates of interest.
Experience of the individual providing advice : How long as the advisor been in the industry and what are his industry qualifications ? He should be able to provide you with their professional qualifications and adequate experience cannot be ignored. Unfortunately, salesman often from the US or Asia regularly contact potential investors to buy into stocks with great enthusiasm. Such unsolicited actions often result in individuals entering into contracts that are worthless, buying more and more shares as the share price supposedly rockets. When attempting to recover your gains, the salesman has disappeared along with your savings. If you wish to speculate on the stockmarket then obtain professional advice and support and never act on the basis of a hot tip from a stranger.
In summary, you invest with the expectation of making a profit over time. By seeking professional advice from licensed institutions, you are taking the right first steps. If things go wrong then you have the peace of mind that Malta has a very strong regulatory framework which is committed to supporting aggrieved investors. All license holders are required to have Professional Indemnity Insurance to cover any claims and investors can be reassured that investing through a Maltese firm offers strong levels of protection.
Mark Hollingsworth, Director, Hollingsworth International Financial Services Ltd
Tel: +356 21316298
e-mail: info@hollingsworth-int.com
Website: www.hollingsworth.eu.com
Authorised by the Malta Financial Services Authority to provide investment services, license IS/32457
There is no doubt that the internet has opened the floodgates for potential investment scams. So called boiler room cold calling is common place and unlicensed financial consultants recommend investment products that offer no protection of capital. Sadly, many individuals, often those that can not take financial risks are taken in by these practices with serious financial consequences.
Before making any investment decisions, certain steps should be taken to quantify the advice and recommendations being received. Certain questions should be asked and backed up in writing before parting with your life savings. A legitimate investment recommendation must be supported by facts and you must be aware of the complaints procedure in the event that things unfortunately go wrong. You must be fully armed and prepared for all eventualities. The following list is aimed at helping you make the right investment decisions and from the right source :
Licensed and regulated advisors : If a firm claims to be offering you investment advice but is not authorised to do so then this should be an obvious reason not to proceed. A list of license holders can be found on the MFSA's website, www.mfsa.com.mt. There are approximately 75 license holders whose services include banking, insurance and investments. The category of the license holder is also very important as this can determine amongst other things whether the firm can handle client's money or can act with a delegated authority.
Investor protection : Are you aware of your rights if the advice that you have received turns out to be inappropriate or deemed bad advice ? Can you make a claim against the firm and do they have adequate Professional indemnity insurance to settle any potential claims ? We are very fortunate to have a specialist complaints unit within the MFSA whose role is to handle any consumer complaints. The unit also provides an education platform to assist both existing and potential investors. During 2009, the unit received 324 written complaints, 90 of which related to investments. In addition there were 39 verbal complaints and 147 consumer queries relating to investments. The role of the MFSA as arbitrator cannot be underestimated with a freephone helpline and dedicated consumer website www.mymoneybox.mfsa.com.mt as examples of the regulators commitment to helping investors.
Bank Protection scheme : Bank account holders in Malta are protected in the event that their bank fails up to €100,000. The need to spread your cash deposits across more than one bank is therefore advisable if your cash wealth exceeds this limit. The collapse of certain Icelandic banks in 2008 is still very fresh and severe lessons have been learned by savers who have deposited their savings with banks who offer headline grabbing rates of interest.
Experience of the individual providing advice : How long as the advisor been in the industry and what are his industry qualifications ? He should be able to provide you with their professional qualifications and adequate experience cannot be ignored. Unfortunately, salesman often from the US or Asia regularly contact potential investors to buy into stocks with great enthusiasm. Such unsolicited actions often result in individuals entering into contracts that are worthless, buying more and more shares as the share price supposedly rockets. When attempting to recover your gains, the salesman has disappeared along with your savings. If you wish to speculate on the stockmarket then obtain professional advice and support and never act on the basis of a hot tip from a stranger.
In summary, you invest with the expectation of making a profit over time. By seeking professional advice from licensed institutions, you are taking the right first steps. If things go wrong then you have the peace of mind that Malta has a very strong regulatory framework which is committed to supporting aggrieved investors. All license holders are required to have Professional Indemnity Insurance to cover any claims and investors can be reassured that investing through a Maltese firm offers strong levels of protection.
Mark Hollingsworth, Director, Hollingsworth International Financial Services Ltd
Tel: +356 21316298
e-mail: info@hollingsworth-int.com
Website: www.hollingsworth.eu.com
Authorised by the Malta Financial Services Authority to provide investment services, license IS/32457
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