London Evening Standard

Piece submitted to the London Evening Standard for Anthony Hilton's article on 20 January 2009. 

 

 

The Government is now set to become a major shareholder in what were some of the biggest PLCs in the global economy, but as a relative newcomer to the hurly burly of the relationships between major shareholders and Boards.  It nevertheless has a de facto mandate to act on our behalf on securing the future of the banking system and the economy, possibly the greatest social issue of our time.

The concept of socially responsible share ownership has been gaining in importance in the dialogue between institutional investors and PLCs over the last five years. Unfortunately, in spite of some notable successes (the shareholder revolt against the 'fat cat pay deals' at GSK in 2003 for instance), PLCs in general and banks in particular have shown little sign that they take socially responsible share ownership seriously.

We would all wish the government to be a socially responsible shareholder on our behalf, and I believe it has a once-in-a-lifetime opportunity to bring about a paradigm shift in how much attention PLC Boards pay to their shareholders by insisting on an effective form of Best Practice regulation. Alastair Darling's requirement of a legal undertaking from RBS to offer £6billion of loans in return for share capital is a step in the right direction.

Robin's Round-Up of Financial Data for January 2009

ROBIN'S ROUND-UP OF FINANCIAL DATA   Contact Robin Keyte on 01823 324432 or robin@towersoftaunton.co.uk

JAN 2009

Chartered Financial Planners

 

We start the New Year with interest rates expected to drop to their lowest levels for several hundred years. Yields on gilts redeeming in 2009 and 2010 imply interest rates will crash down to very low levels (perhaps 0.5%) shortly and remain there for a couple of years.   The difference between LIBOR and the base rate is much reduced implying the government's special measures are starting to work.   CPI and RPI are both on the way down thanks to lower oil prices and mortgage rates, and expected to keeping going down.   Asset classes in favour are UK Fixed Interest (particularly corporate bonds), UK shares, American shares and Japanese shares.

 

Bank of England base rate of interest						2.00% pa
Short dated gilts (redemption yields)		8.00% Treasury Stock 2009 redeeming 25-09-2009				0.78% pa
		6.25% Treasury Stock 2010 redeeming 25-11-2010				0.95% pa
		3.25% Treasury Gilt 2011 redeeming 07-12-2011				2.19% pa
		9.00% Treasury Stock 2012 redeeming 06-08-2012				2.43% pa
London Inter-Bank Offered Rate		LIBOR 1 WEEK				2.00% pa
		LIBOR 1 MONTH				2.16% pa
		LIBOR 3 MONTHS				2.69% pa
		LIBOR 6 MONTHS				3.03% pa
		LIBOR 12 MONTHS				3.20% pa
Consumer Price Inflation (CPI)						4.10% pa
Retail Prices Index (RPI)						3.00% pa
National Savings & Investments		3 Yr Index-Linked Savings Certs offering RPI +				1.00% pa
		5 Yr Index-Linked Savings Certs offering RPI +				1.00% pa
Fund Managers – Current House Views on Different Asset Classes
Asset Class	Positive	Slightly Positive	Neutral	Slightly Negative	Negative		Total Views Offered
Cash	2		5	1			8
UK Fixed Interest	4	1	2	1	2		10
Overseas Fixed Interest	3	1	1	1	2		8
UK shares	5	1	2	1	2		11
European shares	2		4	1	4		11
American shares	8			1	2		11
Japanese shares	3	2	4	1	1		11
Pacific (ex Japan) shares	2		4	4	1		11

 

Data gathered on 5 January 2009. All figures given to 2 decimal places. Participating fund managers: Aegon, Baillie Gifford, Blackrock, Gartmore, Invesco Perpetual, Investec, Newton, Societe Generale, UBS, Schroders, Standard Life.   DISCLAIMER Please note, whilst every effort has been made to ensure the information contained in this document is correct, sometimes the information given to us by third parties is inaccurate. We cannot therefore be held responsible for the accuracy of this information and it should not be relied upon for making any decisions.

 

KW Keyte FCA, GR Virgin CertPFS   RW Keyte BSc PhD, Chartered Financial Planner, Certified Financial Planner CM, Certified to ISO 22222   Registered in England No 2113065         Authorised & Regulated by the Financial Services Authority