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Financial outlook: Devere Group

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Financial outlook: Devere Group

European leaders wrangle publicly over Greece

More than ever before, European leaders remain split on how to deal with Greece and whether the latter should be given further assistance or just let it go altogether.

Speaking ahead of the highly-anticipated Euro meeting on Thursday, Greek Prime Minister Antonis Samaras firmly demanded an end to the open speculation about his country’s exit from the Euro-zone. Samaras warned that an expulsion from the single currency “could become a geopolitical nightmare that would go beyond the borders of Greece”.

“This has to stop”, he said firmly, amid calls to be given more time to implement the latest €11.7 billion plan to reduce its budget and undertake aggressive structural reforms.

However, in its swift response, Germany reiterated that giving Greece more time is “not the solution” as more time implies more money. As she welcomed her French counterpart, German Chancellor Angela Merkel stated that Greece must “stick to its commitments” in meeting the conditions set in order for it to be granted the €174 billion bailout package.

Notably, earlier this week, a Financial Times columnist commented that European leaders should choose whether they would be better off without Greece. However, they would have to be ready to offer an exit package that would cost them dearly – including a sharp currency depreciation and a loss in its credibility. After a closer examination, the latter option ‘looks less attractive and more dangerous than seems at first sight’.

On the other hand, if Europeans accept Greece to remain in the union and thus recognise its efforts, international financial institutions should work closer “to foster public and private equity investment through debt-equity swaps. The Key is that private agents can only believe in the revival of Greece if the Europeans themselves invest in it”.

Meanwhile, Markit Economics, the Euro-zone index of business activity, has projected a fall in gross domestic product for the region in the third quarter of 2012, thus fueling recession fears.

UK financiers gravitating towards Asia

A new study by a financial services recruitment firm has found that professionals in the industry are moving their operations closer to Asia, predicting that the centre of gravity in the finance sector will largely shift towards the continent in the next decade.

Almost a third of UK-based investment bankers would rather work in Asian cities like Singapore, Astbury Marsden has concluded. The study also underlined how London has lost some of its appeal among investment bankers amid tighter regulation and a clampdown on bonuses.

Fast-growing, low-tax and bank-friendly environments are thus becoming the ‘perfect antidote to the comparatively high tax and anti-banker sentiment of London and New York’, the Financial Times reported.

Meanwhile, in the past decade we have seen a number of US and European investment banks investing heavily in building their Asian operations. Of which includes JP Morgan Chase, which moved its global head of investment banking coverage from New York to Hong Kong as part of its push into Asia.

Notably, Asia’s largest economy, China, is seen as the main growth driver in the region, accounting for three quarters of the continents’ investment banking revenues – data from JP Morgan shows.

Interestingly, the survey also revealed that 60% of bankers expect the Asia-Pacific region to become the biggest financial services centre in ten years’ time.

Apple is "most valuable company ever"

Apple’s company value is now at $623 billion, after its share price increased by 2.63% making it the most valuable company in the world.

This surge in share prices occurred primarily due to speculation and excitement over the launch of the iPhone 5 and due to rumours of a cheaper and smaller iPad – creating more confidence in this profitable company.

Apple, the company that almost filed for bankruptcy 16 years ago, has now surpassed Microsoft’s 1999 peak which was at $620.58 billion. Today, Microsoft is worth $257 billion.

Apple’s achievement does not include inflation which means that Microsoft was more valuable ‘on an inflation-adjusted basis in December 1999’ indeed, Apple’s market-cap needs to rise by another 37% to officially claim the top position.

Nonetheless, Apple ‘is now worth more than Microsoft and Google combined’ and it is worth 53% more than the second most valuable company in the word – Exxon Mobil.

Despite the great economic uncertainty of the last four years, Apple has seen ‘great leaps in its value’. Its innovative products and its continual reinvention of itself have enabled this company to triumph, defying the economic crisis.

Besides the now ever popular iPad and iPhone, some analysts are now speculating Apple could develop ‘Apple TV’ – issuing a whole range of consumer electronics products.

Contact your local deVere office to learn more about this and other financial issues

deVere Business Contact Details

Tel: (+66) 038 489 372 / 3(Local Pattaya Office)E-mail: [email protected] | [email protected]

Mobile: Greg Hirst 084 421 2331 | John Hayden 084 528 8617

For more information on the deVere Group, see our Inspire page here

 

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