Thursday 28th July 2016
NEWS TICKER: JULY 28TH 2016: The Prysmian Group's first-half results are marked by revenue growth and a significant improvement in profitability. Explains CEO Valerio Battista. "The biggest drivers of growth have been Energy Projects and Telecom. The important set of technological innovations introduced between end of 2015 and 2016, involving the launch of the 600kV and 700kV cable systems, combined with greater project execution capabilities, involving the commissioning of Ulisse, the Group's third cable vessel, mean the Group is well positioned to continue taking advantage of the opportunities offered by the market. In the Telecom business, growth has been driven by the recovery in optical fibre competitiveness and the new optical cable manufacturing capacity in Eastern Europe. Performance by the higher value-added businesses has contributed to a fresh upturn in profitability, with a significant improvement in margins, also thanks to our actions to reduce fixed costs and rationalise manufacturing footprint. The newly acquired Oman Cables Industry has also made an important contribution in this regard." – The Samsung Electronics board has decided to make additional investments in Samsung Venture Investment Corporation's, an affiliated company of Samsung Electronics, New Technology Investment Funds. SVIC plans to establish a new venture fund, SVIC 32. SVIC 32 is a cooperative fund with its investment focus on the latest technologies to enhance competitiveness of existing set businesses and identify future growth businesses. The transaction is expected occur during the third quarter of 2016. The transaction size is KRW 198bn (99% of the total fund: KRW200bn) -- As a slug of generally positive data emerges from the UK this week, and commenting on today’s corporate results, Richard Marwood, senior fund manager at Royal London Asset Management, says, “Today’s flurry of corporate earnings suggests that as yet the outcome of the EU referendum has not had a major impact on many UK listed companies, outside of the movements in currencies. Without a clear financial picture of the impact, many CEOs are at pains to highlight the resilience of their business and their willingness to take strong action if required. I would expect the bid for ARM to herald a period of heightened corporate activity. The increased offer for Premier Farnell is another clear example of overseas bidders taking advantage of a depressed pound to snap up UK assets.” -- Singapore Exchange (SGX) today welcomed EC World REIT to Mainboard under the stock code “BWCU”. EC World REIT is the first Chinese specialised logistics and e-commerce logistics REIT to be listed on SGX. With an initial geographical focus on the People’s Republic of China (PRC), the REIT invests in a diversified portfolio of income-producing real estate primarily used for e-commerce, supply-chain management and logistics purposes. Peter Lai Hock Meng, Chief Executive Officer of EC World Asset Management Pte. Ltd., the Manager of EC World REIT, said, “We are pleased to celebrate EC World REIT’s successful listing and trading today and we would like to extend our sincere appreciation to all investors for making this milestone possible. Our IPO portfolio of six quality properties offers investors unique exposure to the logistics and e-commerce sectors in Hangzhou - one of the largest e-commerce hubs in China.” – Emerging markets assets benefitted in the Asian session today as the dollar retreated following the US Fed’s decision yesterday to do nothing. Yields on US government bonds declined slightly in the hours following the release of the monetary policy statement. The fall on the long end was with 6 basis points and was more pronounced than the drop on the short end of 3 basis points (bps). The dollar lost 3/4 of a cent vs the euro and stood this morning at 1.107 EUR/USD. The Federal Reserve stopped short of signalling a near-term increase in US interest rates, and while a December move is seen as likely, markets are focusing instead on the extra stimulus Japan's government is expected to deliver tomorrow. A subsequent retreat in the retreat boosted emerging assets in the Asian session with stocks at new 11-month highs despite fresh wobbles on Chinese equity markets. The Straits Times Index meantime (STI) ended 23.88 points or 0.81% lower to 2917.61, taking the year-to-date performance to +1.21%. The top active stocks today were DBS, which declined 2.34%, Singtel, which declined 0.46%, UOB, which declined 1.27%, OCBC Bank, which declined 0.57% and Wilmar Intl, with a close unchanged. The FTSE ST Mid Cap Index gained 0.04%, while the FTSE ST Small Cap Index declined 0.88%. MSCI's emerging equity index rose 0.25% despite pullbacks in Asian markets, where some concern is rising over volatility in China and the weakening yen. Elsewhere in Asia, Chinese shares fell as much as 3% at one point before recovering as new regulations are expected to prompt wealth managers at small banks to bail out of stocks and into bonds. Elsewhere, the Turkish lira continues to recover, firming to one-week highs. In emerging Europe, Turkish assets continued their post-coup recovery, shrugging off a worsening crackdown on alleged plotters. Stocks jumped 1 percent to one-week highs while the lira was flat, also near one-week highs. Turkey's economic confidence index hit also touched its highest level so far this year in July, rising 14.9% to 95.7. In Africa meantime, the temperature is different. the Nigerian naira hit new record lows against the dollar on Wednesday, shrugging off a rate increase of 200 basis points (bps). Traders are also waiting to see if Egypt will announce plans to devalue its pound at a central bank meeting. Cairo stocks pulled off three-month highs hit after news the government was in loan talks with the International Monetary Fund. The government’s 2025 dollar bond, which rose 4% after the news, eased half a percent. Poland too is in the spotlight today as the European Commission's statement yesterday gave Warsaw three months to address rule of law concerns. In early trading today Polish stocks extended losses, falling 0.7% and the zloty lost 0.2.%.

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Countries’ attractiveness measured by business investment

Friday, 08 June 2012 Written by 
Countries’ attractiveness measured by business investment Countries’ attractiveness for companies can be measured indirectly, by looking at trends in cost-competitiveness, export market shares, production capacity and employment. But it can also be measured directly by looking at business investment: what proportion of investment by a country’s companies is carried out in that country or abroad? How much is invested by foreign companies in that country? We compare the United States, the United Kingdom, Germany, France, Spain, Italy, Sweden and Japan. The two measures of attractiveness rank the countries quite differently. If we measure attractiveness by business investment, the two most attractive countries are the United States and the United Kingdom, the two least attractive countries Italy and France. http://www.ftseglobalmarkets.com/

Countries’ attractiveness for companies can be measured indirectly, by looking at trends in cost-competitiveness, export market shares, production capacity and employment. But it can also be measured directly by looking at business investment: what proportion of investment by a country’s companies is carried out in that country or abroad? How much is invested by foreign companies in that country? We compare the United States, the United Kingdom, Germany, France, Spain, Italy, Sweden and Japan.

The two measures of attractiveness rank the countries quite differently. If we measure attractiveness by business investment, the two most attractive countries are the United States and the United Kingdom, the two least attractive countries Italy and France.

Countries’ attractiveness for setting up business

Attractiveness depends on cost-competitiveness, the tax system, the skill level of the labour force, corporate profitability, public infrastructure, etc. So it is a multi-faceted and complex variable.



It can be measured indirectly, by:

  • cost-competitiveness, in light of the trend in exchange rates measured by the real trade-weighted exchange rate. Currently the currencies of the United Kingdom, Italy and Spain are overvalued in real terms;
  • export market shares, in which losses have been very marked in Japan, the United Kingdom, France and Italy;
  • the trend in potential GDP and in production capacity in industry. Potential GDP has grown significantly in the United States, while production capacity has stagnated in the United Kingdom, Japan, Spain and Italy;
  • growth in employment excluding the civil service, which has been the most vigorous in Spain and the weakest in Japan.

If we use these criteria, the most attractive countries for companies are the United States, Sweden, Germany, Spain and France, while the least attractive are the United Kingdom, Italy and Japan.

Attractiveness measured by investment

However, for each country we also look at two direct measures of attractiveness for companies:

  • the proportion of the country’s business investment that is carried out in that country and not abroad. This proportion is low in Sweden, France, Spain and the United Kingdom;
  • the share of investment by foreign companies in GDP. This proportion is high in Sweden, the United Kingdom and Spain.

According to this investment criterion of attractiveness, the most attractive countries are the United States, the United Kingdom, Spain; the least attractive are France and Italy.

Which are the most attractive countries among the large OECD countries?

When you summarise both the indirect and the direct approaches, you realize that the United States tops the ranking, while France and Italy are found at the bottom.

Patrick Artus

A graduate of Ecole Polytechnique, of Ecole Nationale de la Statistique et de l'Adminstration Economique and of Institut d'Etudes Politiques de Paris, Patrick Artus is today the Chief Economist at Natixis. He began his career in 1975 where his work included economic forecasting and modelisation. He then worked at the Economics Department of the OECD (1980), before becoming Head of Research at the ENSAE. Thereafter, Patrick taught seminars on research at Paris Dauphine (1982) and was Professor at a number of Universities (including Dauphine, ENSAE, Centre des Hautes Etudes de l'Armement, Ecole Nationale des Ponts et Chaussées and HEC Lausanne).

Patrick is now Professor of Economics at University Paris I Panthéon-Sorbonne. He combines these responsibilities with his research work at Natixis. Patrick was awarded "Best Economist of the year 1996" by the "Nouvel Economiste", and today is a member of the council of economic advisors to the French Prime Minister. He is also a board member at Total and Ipsos.

Website: cib.natixis.com/research/economic.aspx

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