Trump’s Other Wall

August 25, 2019

Trump brags about the ‘wall of money’ now flowing into the US from abroad–from Europe, Asia, emerging market economies–as the global economy slides into recession there faster than in the US. He thinks that is great news for the US economy. But it’s quite the opposite.

Trump’s trade war, his provoking of a global currency war, his monetary policy of forcing the Fed to lower rates all exacerbate the Wall of Money inflow to the US which hastens the decline of the global economy.

Behind the Wall of Money inflow is $17 trillion in negative interest rates in Europe and Japan that is driving money out of those economies and into US Treasuries as a ‘safe haven’, causing a rise in the dollar relative to other currencies and causing currencies worldwide outside the US to fall in turn. As other currencies fall, capital flight from their economies (Europe, Latin America, Asia) sends still more dollars to the US–driving the dollar higher still. A vicious cycle ensues: declining currencies leads to more capital flight, to more demand for US$, to rising dollar value, to further decline in other currencies, etc. Investment collapses and recessions deepen further outside the US.

US Multinational corporations doing business in other countries see their profits rapidly eroding in those economies, as the currencies in the countries in which they’re doing business collapse. They then rush to convert their Pesos, Euros, Rupees, etc. into dollars as quickly as possible and repatriate their offshore profits back to the US. The result: the US$ rises still more.

Trump’s trade war has a similar negative compounding effect as negative rates offshore, capital flight, and multinational corporation repatriation: Today’s slowing global economy (already in a manufacturing recession everywhere including the US) is largely driven by business investment contracting in the face of uncertainty due to Trump’s trade war. That uncertainty and declining investment leads to central banks worldwide reducing their interest rates in a desperate effort to stimulate their economies, which is now happening. But lower interest rates in Europe, Emerging markets, etc. has the negative effect of depressing the value of their currencies still further–leading to even more capital flight to the US, buying up more US Treasuries, and driving up the US $ even more. In other words, Trump’s trade war is also driving the Wall of Money to grow further.

Trump has not only clearly now lost control of trade negotiations with China. He has lost control of US monetary policy with the Fed that now refuses to be stampeded, he has lost control of any stabilization of the US dollar

But the Wall of Money is a symptom and represents the global economy outside the US sliding deeper into recessions–a global economic decline that is now spilling over to the US economy.

What’s Trump’s solution? Trump browbeats the Federal Reserve to get Powell, its chair, to lower rates, in the hope lower rates will discourage capital inflow to the US (i.e. the Wall) and thus slow the rise of the dollar. But global recession and the ‘wall of money’ now more than offset any Fed rate cuts effect on the US$. Meanwhile, Trump’s monetary policy (lower interest rates) accelerates the wall of money inflow further by forcing the central banks of other economies to lower their rates still further.

Trump policies have also set off a global currency war, which is about to intensify as he targets China’s Yuan-Reminbi. China is already responding by allowing the Yuan to slowly devalue to offset Trump’s tariffs on China exports. Devaluation of the Yuan forces other economies to devalue their currencies further, as their central banks lower their interest rates further, in Europe and Japan that means even deeper negative rates and more capital flight to US Treasuries and an even higher US$.

In short, Trump’s trade war, his provoking of a global currency war, his monetary policy of forcing the Fed to lower rates all exacerbate the Wall of Money inflow to the US and hasten the decline of the global economy.

And it’s only a matter of time–a short time–before it’s also clear he’s lost control of the US economy as well.

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About the Author

Jack Rasmus is the author of the forthcoming book, ‘The Scourge of Neoliberalism: US Policy from Reagan to Trump’, Clarity Press, October 1, 2019. His website is http://kyklosproductions.com and twitter handle @drjackrasmus.

Cedar Rose: Your Premier Partner for Business Intelligence in the MENA Region and Beyond

August 24, 2019

Interview with Mr. Antoun Massaad, the CEO and Founder of Cedar Rose

In the midst of today’s volatility and global economic turmoil, growth is resilient in the Middle East and North Africa (MENA) Region. It has become a popular investment destination and a key player in the world economy accounting for 5% of the world’s imports valued at around $300,000 million. Now the region shifts towards sustainable business models and strategies which is seen to generate up to US$637 billion and 12.4 million jobs across the region by 2030, making MENA a key market “hotspot”. Recently, we had the pleasure of speaking with Mr Antoun Massaad, the CEO and Founder of Cedar Rose, an international award-winning business intelligence provider for the MENA Region. In this interview, Mr Massaad highlights the growing opportunities in doing business in the region – with its green and sustainable development initiatives – and Cedar Rose’s key role in providing potential investors with top-notch credit information and risk management solutions that help businesses across all industries optimise and utilise the full business growth potential of the MENA Region.

Thank you so much for your time, Mr Massaad. For us to get a glimpse of how a CEO of a successful company starts a day, can you share with us some of your favourite morning routines to ensure a productive day ahead?
Sure, my mornings are actually quite similar every working day. Before I start work, Monday to Friday, I hit the gym for at least an hour before I get into the office. After this and a double espresso or two, I feel refreshed, filled with energy and ready to take on whatever challenges and opportunities the day will bring. From the time I wake up, my usual day starts with checking emails to spot any alerts or anything that requires immediate attention. That’s also when I start to prepare for my day ahead – review what meetings are booked in and decide which issues I will be concentrating on and what I plan to accomplish during the day with the help of my team. I find that having clear short and long-term objectives helps me to achieve them.

You founded Cedar Rose in 1997 and for almost 12 years now, you hold the position of CEO. Can you share with us your inspirations and the story of how you started Cedar Rose? What are the highlights of your professional journey so far?

There was a strong appetite for more accurate information and that companies would prefer to pay a little more for information they could rely on, especially if that intelligence was delivered quickly. And so Cedar Rose was established 22 years ago.

I started the business in 1997 having worked for another business intelligence agency and I realised that there was a lack of credible and accurate information available for the Arabic-speaking countries and this was just being accepted by export credit insurance agencies who would simply build the additional risk exposure into the price of their cover. Having grown up in Lebanon then worked as a researcher myself in London, I knew that with the right attitude, respect for the Arab culture and knowledge of the local protocol, it was possible to obtain more in-depth information on both companies and individuals.
I also realised there was a strong appetite for more accurate information and that companies would prefer to pay a little more for information they could rely on, especially if that intelligence was delivered quickly. And so Cedar Rose was established 22 years ago.
The highlights have been the many awards we have won over the years, as well as the realisation at one point a few years ago that we had created the largest database of companies and linked individuals in the MENA region, passing competitors who had been in the industry over 100 years. That was a real high point for me personally and a very proud moment.

Cedar Rose was recognised as the Commercial Credit Information Provider of the Year 2019, and has been consistently living up to its motto, “Strive for Excellence” by providing world-class and top-notch Due Diligence reports, in-depth Background Screening, and Investigation services to international brands and companies. What differentiates Cedar Rose from other business intelligence providers?
At Cedar Rose, we take pride in what we do and we do it with passion. This is shared throughout the organisation and at every level. I believe it’s the quality, expertise, and engagement of the people we employ who differentiate Cedar Rose from other information providers. Our employees are highly qualified and love what they do – they have a say, they give great feedback, and are always innovative so we continuously have new ideas on how to be better at what we do every day. They literally do “Strive for Excellence” and this keeps us always a few steps ahead of the competition.

We translate and transliterate data and identify the entities accurately to ensure out data is clean and user-friendly before we load it into our database and make it available to our clients, who make very important decisions based on the information we provide to them.

Technology continuously evolves and now plays a very important role in every aspect of business across industries. Can you share with us how Cedar Rose leverages the latest technology to innovate your database and services and make you a reliable leader in the field of credit information and due diligence for over two decades?
We have been proactively sourcing information from countries and regions where information is not so widely or obviously made available to the public, though all the data we gather and provide is publicly available and legally and ethically obtained. We use the latest technologies to normalise and standardise data, which very often comes in various formats and languages even from within the same country. We translate and transliterate data and identify the entities accurately to ensure our data is clean and user-friendly before we load it into our database and make it available to our clients, who make very important decisions based on the information we provide to them. It is widely known that “good data in, good data out and bad data in bad data out” therefore accuracy and comprehensiveness are key to the data we provide, as is speed of access. We ensure to use the very best of what is currently available in terms of technology to achieve the heights we are reaching, whether that be our Add-on for Salesforce, our API, artificial intelligence, machine learning, or other automated processes, mostly developed and monitored by our intelligent teams in-house in Lebanon and Cyprus.

Companies of different industries partner with Cedar Rose in order to gain access to the largest business intelligence database and risk management solutions for the MENA region. Can you share with us how vital these services are for businesses and industries? What industries in particular would find value in your services?
The MENA region is a growing, extremely diverse region with some of its markets being mature, whilst others are not so much so. Nonetheless the region is a key player in the world economy accounting for 5% of the world’s imports valued at around $300,000 million annually. MENA has over 400 million inhabitants and expected to reach over 500 million by 2025 if we consider the Arabic speaking countries alone and not Iran, Israel, or Turkey. The region is therefore nearly the same size as the EU (European Union) but it carries its own unique set of risks. We therefore aim and are working hard to ensure that data from this region is available to our customers who rely on us to make decisions 24 hours a day, 365 days a year. Having access to accurate data on businesses and individuals in the region is vital to protect our clients’ reputations, mitigate risks, and ensure they are trading compliantly in accordance with global regulations. And, of course, to help them avoid the risk of non-payment. Our clients include payment service providers, e-commerce platforms, banks, financial institutions as well as commercial, manufacturing and industrial companies, law, risk advisory, and audit firms to name a few. Anyone trading in, exporting to or investing overseas can benefit from our services. Our clients need to have access to easy and quickly accessible, accurate, reliable, and up-to-date information, and we aim to deliver exactly that at a reasonable price.

The MENA Region is estimated to generate US$637 billion and 12.4 million jobs across the region by 2030 as it shifts toward sustainable business strategies (according to Business & Sustainable Development Commission 2017 Report). How does Cedar Rose identify market opportunities and growth with the relevant and potential investors within the industries?
Actually I recently attended the Arab British Economic Summit in London and a lot of topical issues were discussed including sustainability, diversification away from a dependence on oil and gas, green energy, agriculture, and the new technologies being employed in that sector as well as the crises being faced in MENA in terms of youth unemployment and severe water shortages. There are a lot of opportunities for green initiatives – the region is heavily dependent on electricity for cooling because of the extremely high temperatures so global warming just exacerbates that issue. Investors in green energy, technology, education, food, beverages, and luxury goods are always going to find opportunities in MENA. However, I don’t see our role as one of identifying the opportunities, it is more of making sure that our clients know exactly who they are investing in or trading with and what further connections or risks they may be exposed to so that they can benefit from the multitude of opportunities in a secure way.

The MENA Region poses a great and unique opportunity for business development and was identified as one of the emerging key market hotspots. What do you think are the things that companies in the MENA Region should enhance and strengthen in terms of their credit and risk management strategies?
Companies have to be prepared to invest in risk mitigation. We have had large clients lured away many times in the past by cheap credit or due diligence reports being offered by our competitors. But I can confidently say that every time they have returned to Cedar Rose, because they realised that either thorough investigations were not being conducted or the data they received was full of duplicates and inaccuracies. We may not be the cheapest agency out there, but I am very confident in the quality of the reports and data we provide, so my first advice would be to invest wisely, but do invest in risk prevention. As for day-to-day business, MENA is a region where human interaction is still very important, so develop good one-to-one relationships with business people in the region and you will find loyal and mostly reliable partners. Getting to know about the local culture and protocol is important and can go a long way in helping to build strong partnerships.

As the leading provider of credit information, business intelligence, and investigative due diligence for the MENA Region, how has Cedar Rose been able to make significant contributions in promoting the region for major sustainable market opportunities?

Trade happens where there is mutual trust; and good, reliable business intelligence can help to build that trust. With a database of over 12 million companies in the region, we have helped bring MENA data to the masses in a format and language that they are used to working with.

Through our social media pages, we often highlight sustainable opportunities within the region. However, I think the significant difference we have made is proving that business information for the Middle East, Gulf, and Africa can be made available and this not only reduces risks and keeps export and trade credit insurance premiums within reason, it removes the fear factor.
We provide over 2000 credit reports a month – that’s around US$150 million worth of risks mitigated monthly, let alone the billions of dollars in trade our due diligence services and data subscriptions help to facilitate. Trade happens where there is mutual trust; and good, reliable business intelligence can help to build that trust. With a database of over 12 million companies in the region, we have helped bring MENA data to the masses in a format and language that they are used to working with. Our recently developed Salesforce add-on means that potential customers can be identified, leads can be instantly validated, KYC done, and additional information is available straight away, or can be provided within as little as 24 hours so that deals can be quickly closed. This has made painfully slow client on-boarding for MENA a thing in the past.

You have received invariably excellent feedback from your clients and users regarding the quality of your customer service and the user interface of your platforms. How does Cedar Rose ensure the delivery of best client services amidst the fast-changing demands of the key players of the business industries and sectors?
It’s simple. We listen to our customers. We ask what they want and we do our best to deliver it within or beyond their expectations. We make sure nobody promises anything we can’t deliver so we manage our customers’ expectations and don’t disappoint them. If they don’t communicate much, we ask them regularly if they are satisfied and on the very rare occasion they are not happy, we address issues straight away. When they tell us they are happy, we try to make sure everyone in the organisation knows so that they all feel the buzz of having praise from a customer and thrive on that feeling. That’s what motivates us all.

What are your short-term and long-term plans for Cedar Rose? Where do you see Cedar Rose in the ever-evolving business ecosystem in the next 10 years?
In the short term, we will be expanding our coverage globally. We already cover 170 countries for credit reporting and will offer global coverage in 2020. For Due Diligence, we have recently added Russia and the Stan countries to our MENA, Turkey, and India resources. I see us eventually becoming the go-to source for instant business intelligence, risk rating, and verification on any company, director or shareholder in the world with full link analysis. Fintech and the blockchain will change the industry beyond recognition, but we’ll be ready.

I see us eventually becoming the go-to source for instant business intelligence, risk rating and verification on any compan, director or shareholder in the world with full link anlysis.

What key messages does Cedar Rose want to get across to industries who are wondering about the status quo of MENA Region’s investment opportunities and business environment in the midst of rising conflicts and slowing global demands?
Well the first one would be that demands are not slowing in MENA. The population is growing fast, the climate is getting even hotter and we are talking about a dry, arid region – a large part of which is desert. People need water, sustainable agriculture, food, entertainment, leisure, education, healthcare, pharmaceuticals, housing, vehicles, and sustainable energy. There are development projects underway in almost every country from the Dubai 2020 Expo to Saudi 2030 Vision and Morocco 2020. There have been and unfortunately probably always will be conflicts in the region – it is volatile and tensions run high because of religious and historical disagreements, corruption, and vast economic disparity, but there are endless opportunities too. So tread cautiously – make use of all the available information and don’t jump in until you know how exactly deep the water is.

As you lead Cedar Rose to stay on top in a competitive market, it is also vital to maintain your employees’ well being. How do you ensure a happy workforce and good work-life balance for your group of experts and employees?
We try to encourage our teams to take all their holiday allowance and to finish their work within the contracted hours. Work-life balance is very important and I even try to take full weekend breaks from work whenever possible. There are times when we need key staff to be available out of hours but we don’t abuse that. I like my staff to come in to work full of energy so they need their rest time too. We also have regular meetings, appraisals and social events so that our people get to interact both in work and outside. I’ve noticed that setting an example of fitness and wellness does motivate some of my team to follow suit, but there will always be those who eat the cake and the chips just because I didn’t. You need some of those rebels too to keep a good balance! It would be boring and slightly worrying otherwise.

Your role as the CEO of a well-established company entails great responsibility. On a lighter note, how do you usually spend your time off work?
Indeed it does. My wife and I didn’t choose the easiest business, but we live on the wonderful island of Cyprus so finding ways to relax is easy. If I’m not on my boat or in the gym, I love spear-gun fishing and I recently started free diving, which is like scuba diving without the breathing equipment. The Mediterranean Sea is my sanctuary.

Lastly, how would you describe success? What is your favourite motivational quote?
I’ve learned that success is not about making money, it’s about being healthy and happy. If you can make money doing that, it helps you to reach personal goals like buying the house or car you always dreamed of and that will help some people feel happy – but without health and fitness, you won’t get to enjoy it anyway. My personal successes are seeing my sons grow up into good, honest men I can be very proud of and knowing I gave them a comfortable and happy childhood. My favourite quote has always been – Success is a journey, not a destination. Enjoy the ride.

Thank you very much Mr Massaad. It was a pleasure speaking with you.

For more information, please visit: https://www.cedar-rose.com/

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About the Interviewee

Antoun Massaad, CICP, MIEx, MCICM
CEO and founder of Cedar Rose since 1997, Antoun is fluent in Arabic, English, French and Greek. Antoun has specialized in due diligence and research in the Middle East and North Africa since starting in this field in London in 1992. His personal objective is to provide the most accurate and efficient service for business intelligence and data in the region.

Hong Kong and the Audacity of the United States

August 23, 2019

By Peter Koenig

People often ask and hint at the similarities between the Hong Kong protests and the French Yellow Vests. The former started on 31 March and are approaching their 19^th week – the Yellow Vests (YV) have celebrated last weekend their 40^th week of protests. As of recently some supporters of Macron – or Fifth Columnists – have infiltrated into the YV movement in France and have suggested that the YVs may support the Hong Kong protesters in solidarity for freedom.

Well, that didn’t go down well with the highly educated and well informed YV. Many of them actually felt insulted by the Macronites – ‘for whom does this guy [Macron] take us?’ – And right they are. There is not a shred of comparison between the two movements, except that they are protests – but for widely different reasons, and serving widely different agendas. The YV can in no way be associated with the Hong Kong “protests” – which are the equivalent of US funded Color Revolutions.

The Macron Government is creating poverty, by shifting the financial resources – the few that are left, from the bottom to the top.

We, the YV leaders said, are fighting against an ever more totalitarian French government that is ever more stealing our legitimate income in the form of all sorts of taxes and keeps a minimum wage on which ever-more French families cannot survive. Life is unaffordable on a regular workers pension. The Macron Government is creating poverty, by shifting the financial resources – the few that are left, from the bottom to the top. That’s what we are fighting and protesting against. We want a fundamental change in the French economic structure and the French leadership. You see, all of this has nothing to do with the Washington funded Hong Kong Protests that are directed on Washington’s behalf by Hong Kongers against the Government of Mainland China.

It couldn’t be clearer. The French Yellow Vests know what they are fighting for. The Hong Kong protesters, most of them, follow a few leaders under false pretenses against their country, against Beijing. Granted, many of the protesters are pro-westerners, they sing the US National Anthem, and wave the British flag – the flag of their former colonialists.

Actually, funding to destabilize Hong Kong in the future had already started as early as 1994, 3 years before the official Handover of Hong Kong by the UK to the Beijing Government. Way before the official date of returning Hong Kong in 1997 to the Peoples Republic of China (PRC), the US built up a network of Fifth Columnists in Hong Kong.

Actually, funding to destabilize Hong Kong in the future had already started as early as 1994, 3 years before the official Handover of Hong Kong by the UK to the Beijing Government.

Washington pours millions into creating unrest in Hong Kong, as in Ukraine, when the US State Department started financing the preparation of the 2014 coup at least 5 years beforehand at the cost of US$ 5 billion, according to Victoria Nuland’s, Deputy Secretary of State, own admission, directly and through NED, the National Endowment for Democracy, an “NGO” which it isn’t. It is rather the extended or soft arm of the CIA, receiving hundreds of millions of dollars from the State Department for their ‘regime changing’ activities around the globe.

In 1991, The Washington Post quoted a NED founder, Allen Weinstein, as saying “a lot of what we do today was done covertly 25 years ago by the CIA”. – Couldn’t have been said better. We see the results all over the world.

Precisely this has happened in Hong Kong and is going on until this day – and probably way beyond. The US will not let go. Especially now that most people who have at least a limited understanding on how these western manipulations work, comprehend and see for themselves who is sowing the unrests.

Take the 22-year-old student and western hero of the 2014 Umbrella Revolution, Joshua Wong, trained programmed and funded by the US State Department / NED / CIA. He is again a main player in the current protest movement. Wong is the on-the-ground boy for the local media tycoon, Jimmy Lai, who has spent millions of his own money in the 2014 “Occupy Central” protests (Umbrella Revolution).

The oligarch uses his funds widely to finance protest leaders and protest groups. He also created his own National Party, with significant xenophobic connotations. Yet Mr. Lai is very close to the Trump Administration and met, along with many of his protest leaders, with the US envoy in Hong Kong, as well as with National Security Advisor John Bolton – and other US officials. On July 8, Mr. Jimmy Lai met US Vice President Mike Pence at the White House.

Lai has full support of the US Government to encourge and promote these protest groups. Yet, if asked, the protesters have no precise plan or strategy of what they want. The island is largely divided. By far not all protesters want to separate from the mainland. They feel Chinese and express their disgust with Jimmy Lai’s radical anti-Beijing propaganda. They call him a traitor.

Mr. Lai was born in 1948 in mainland China, in an impoverished family in Canton. He was educated to fifth grade level and smuggled to Hong Kong in a small boat at age 13. In HK he worked as a child laborer in a garment factory at about the equivalent of US$ 8 per month. In 1975 he bought a bankrupt garment factory for a pittance and created Giordano, producing sweaters and other clothing for mostly US clients, like J.C. Penny, Montgomery Ward and others. Mr. Lai today is openly criticized even by his own people as a conspirator behind the violence of the HK riots, or protests, as he prefers to call them.

The protests started with a ‘controversial’ extradition law – which, by the way, exists between most States in the United States, as well as between nations in Europe and to a large extent internationally. Therefore, this is nothing unusual. Yet, its importance was blown out of proportion by the western media and by Mr. Lai’s own local media to distort the picture. A minority, of course, would like their full independence from China which is totally against the agreement signed between the UK and Beijing at the so-called 1997 Handover.

A few days ago, the US sent a couple of war ships into China waters at Hong Kong. They had the audacity to ask Beijing to grant them the right to dock at Hong Kong harbor. Beijing, of course, refused and warned Washington – do not meddle in our internal affairs. Of course, Washington has no intention to heed China’s advice – they never do. They have been inoculated with the view that the exceptional nation calls the shots. Always. Nobody else should even dare to contradict them. Period.

On July 3, The China Daily pointedly reported “The ideologues in Western governments never cease in their efforts to engineer unrest against governments that are not to their liking, even though their actions have caused misery and chaos in country after country in Latin America, Africa, the Middle East and Asia. Now they are trying the same trick in China.”

The US tactics in Hong Kong, may be combined with Trump’s trade war, with the Pentagon’s greater presence – mainly new military bases and navy presence in the Indo-Pacific region – Obama’s (in)famous Pivot to Asia which prompted Obama to order 60% of the US Navy fleet to the South China Sea.

All of this and more are part of a destabilization war with China. Washington is afraid of China’s rising economic power in the world, of China’s monetary system, that is based on economic output and on gold, not fiat money like the US Dollar and the Euro and other currencies following the western turbo-capitalist system; and Washington is afraid of losing its dollar hegemony, as the Chinese yuan is gradually taking over the dollar’s role as world reserve currency.

Hong Kong was basically stolen by the Brits in 1842 at the heights of the Opium Wars. Under pressure of the British military might, China ceded Hong Kong under the Treaty of Nanking, signed on 29 August 1842. Hong Kong became, thus, a Crown Colony of the British Empire. In 1898, Hong Kong’s Governor Chris Patten and Prince Charles agreed on a 99-year lease and pledged to return Hong Kong to China in 1997.

After 155 years of British colonial oppression of the people of Hong Kong, it was time to normalize the status of Hong Kong as what it always should have been, namely an integral territory of China. The “One Country, Two Systems” agreement of 1997, returned Hong Kong to the People’s Republic of China, but the parties agreed to leave the capitalist system in place for 50 years. The agreement also stipulated that all intervention and colonial claims on Hong Kong were supposed to end. Full sovereignty was to return to China. What’s happening now – US-UK fomented riots to seek independence of the island, is in total disregard of the 1997 Handover Treaty.

The US inspired and funded protests are destined to challenge the HK-China sovereignty clause, by mobilizing public opinion that wants full “freedom” – i.e. independence from China.

The 50 years of the usual abusive capitalist continuation, would allow the imperialist US and UK to maintain economic control over Hong Kong and thereby exert economic influence over the PRC. How wrong they were! – In 1997 Hong Kong’s GDP constituted 27% of the PRC’s GDP – today that proportion shrunk to a mere 3%. China’s rapidly growing level of development, especially the Belt and Road Initiative (BRI), which the west chose to literally ignore until about a year ago, has become a vital threat to the US corporate world.

What the US and UK – and the rest of the West – is particularly interested in is HK’s special banking position in the world. Through Singapore and Hong Kong, Wall Street and key European banks, in cohorts with their not so ‘ethically-clean’ and often fraudulent HSBC partner, pretend to control and influence Asian economics – and especially attempt to prevent China to take over the Asian financial markets. Hong Kong has the most liberal banking laws, possibly worldwide, where illegal money transactions, money laundering, shady investments in the billions can be carried out and nobody watches. Maintaining HK as long as possible with this special nation status and wielding influence and control over PRC’s financial markets is one of the western goals.

But little does the West understand that China and other eastern countries, plus Russia, India, Pakistan, have already largely detached, or are in the process of detaching from the dollar economy and are members of the Shanghai Cooperation Organization (SCO). Let’s face it, the SCO comprises about half of the world’s population and controls about one third of the globe’s economic output.

Therefore, the SCO members do no longer depend on the western financial markets and monetary manipulations. In fact, Shanghai has in the last decades grown to become China’s financial hub with way more importance for China than Hong Kong. So, it is very unlikely that China will crack down on Hong Kong for the protests. There is too much political capital to be lost by interfering. The West and Hong Kong protesters may as well riot themselves into rot.

But if China gets tired of these incessant western provocations and really wants to put an end to them, the PRC could take over Hong Kong in less than 48 hours, abridge the 50 years of western capitalism and make HK a full-fledged province of China, no privileges, no special status, just a part of sovereign China. End of story.

Featured Image: Kim Kyung-Hoon/Reuters

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Peter Koenig is an economist and geopolitical analyst. He is also a water resources and environmental specialist. He worked for over 30 years with the World Bank and the World Health Organization around the world in the fields of environment and water. He lectures at universities in the US, Europe and South America. He writes regularly for Global Research; ICH; RT; Sputnik; PressTV; The 21^st Century; TeleSUR; The Saker Blog, the New Eastern Outlook (NEO); and other internet sites. He is the author of Implosion – An Economic Thriller about War, Environmental Destruction and Corporate Greed – fiction based on facts and on 30 years of World Bank experience around the globe. He is also a co-author of The World Order and Revolution! – Essays from the Resistance.
Peter Koenig is a Research Associate of the Centre for Research on Globalization.

Is an Accounting Degree Beneficial for Business or Employment?

August 23, 2019

In your career, it is likely that you will at some point be an employee but at another time assume the role of a business owner. Such is the nature of the modern working life, where flexibility is the key to both survivability and success over the decades.

This is why we are asking whether an accounting degree would be beneficial in either circumstance – business owner or employee? Let’s see.

Employee with an Accounting Degree

Accounting degrees have progressed over time to become more modern and reach beyond double-entry bookkeeping and financial accounts preparation. They now include other related topics such as information systems to enable people versed in financial matters to understand and deal with broader business issues.

For an employer, a new staff member who is well versed in strategic decision-making and organizational complexities of modern business is a definite boon. They can rely on their knowledge along with their understanding of how financials interconnect with other aspects of business that materially impact success or failure.

While an employee who studies an accounting degree from an educational establishment like the Walsh University may take the course online, they’re still able to work at the company in the interim. This benefits the employer as their staff member’s skills develop as they take the course. It’s also more likely that promotions will follow as their usefulness becomes more evident.

Business Owner with an Accounting Degree

As a business owner, many are struck by confusion over financial matters. Maybe they came from a sales-oriented position previously, so financial numbers weren’t in their wheelhouse. This creates a void that is difficult to navigate through when dealing with management accounts for projects and trying to understand what’s happening financially with their business.

In such circumstances, studying for an accounting degree makes good sense. The fact that modern degrees such as this now consider the global picture and the operational side, along with how it links to the balance sheet and cashflow statement, is a bonus.

Which Working Scenario is Better with Accounting?

It doesn’t necessarily have to be an either/or scenario when studying accounting. While it will certainly be beneficial from a career perspective, many founders launch business at a later stage, when they’re clearer about how they’d like their future to look. As such, learning about financial matters is not likely to be a regrettable decision as this kind of knowledge never goes to waste.

As a business owner, the more that’s understood about the numbers behind the business, the better. Whilst it’s possible to outsource the financials to an accounting company to prepare them, this can never replace a CEO who understands their lingo and the numbers on the page.

Whether you are working for a company or running one, having a solid appreciation of the financials is almost an act of self-preservation. It makes it easier to navigate choppy business waters and provides time to look at alternative employment scenarios should an employer look like they’re economically sinking.

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Few important ways in which cryptocurrencies are impacting financial transactions at the global level

August 23, 2019

The blockchain technology and cryptocurrencies are rapidly changing the way people carry out financial transactions all over the world. Various industry experts are hoping that crypto banking will soon become an integral part of the mainstream financial industry because of the massive advantages offered by it.

Many big and small countries are also supporting the blockchain technology and cryptocurrencies in their own unique ways. One of the recent ones to join the trend is Isle of Man which opened a dedicated Blockchain Office and Sandbox some time ago. Let’s now tell you about some important ways in which cryptocurrencies are impacting the financial transactions at the global level.

Doing away with the banking system’s imperfections

The conventional way of conducting financial transactions has become vulnerable to hacking attempts and all kinds of compliance and governance-related issues over a period of time. Cryptocurrencies are playing a key role in doing away with the imperfections of the traditional banking system. To give you an example, crypto banks are not vulnerable to the same kind of data breaches as traditional banks are. Furthermore, cryptocurrency transactions are secure and anonymous in nature. In addition, unlike the paper currency, cryptocurrency cannot be counterfeited.

Elimination of the middlemen

In the conventional banking system, the money is deposited into a bank and the users are allowed to only make transactions which are sanctioned by these banking establishments. However, in case of cryptocurrencies, as the entire system is decentralised, the transactions can be carried out independently and securely without the need of any middlemen. No one holds onto your money. Rather your money is stored in the cloud through the blockchain technology. This is also the reason why the conventional banking industry is afraid of blockchain technology as it can possibly result in the former’s collapse. Many are wondering if the future of banking is all about bitcoin and blockchain?

Lowering the transaction cost

The transaction is carried out through cryptocurrencies are much cheaper compared to the ones done through traditional money transfers. To give you an example, if you pay $ 1000 through your credit card to a vendor, you will incur some minor additional charges too. These charges are because of the other entities involved in the process. However, in case of cryptocurrencies, you pay exactly what you need to, as there are no other entities involved.

Convenience

One of the biggest changes brought about by cryptocurrencies is how convenient and quick they have made the financial transactions. There is no need of carrying wads of cash in your pockets or multiple credit cards in your wallet. Cryptocurrencies do away with these troubles and are also not prone to loss, theft and other similar mishaps. The blockchain technology enables you to store your cryptocurrencies in electronic wallets that can be firmly safeguarded with the help of secure passwords. Although it is still possible for you to lose your crypto cash, you’d need to commit many silly mistakes to be able to do that.

Tamago-ya – The Bento King of Tokyo

August 22, 2019

By Seungjin Whang

Tamago-ya (meaning “Egg-shop”) was founded by Isatsugu Sugahara in 1975, as a small mom-and-pop bento (“boxed lunch”) shop. Under the entrepreneurial leadership of Chairman Isatsugu and his son President Yuichiro Sugahara, the company grew rapidly to become the largest lunch box producer in Tokyo, Japan. As of 2019, it produced and delivered 70,000 boxes a day, employed 650 people, and grew revenue to US$80 million. Tamago-ya produced and delivered high-quality lunch boxes at low price of US$4 to office workers in the Tokyo Metropolitan area.

The success of Tamago-ya depended on its unique hyper-efficient supply chain management. It received orders at 9 a.m. until 10:30 a.m., and delivered by noon. Thus, the delivery lead-time was very short, and on-time delivery was a challenge in busy Tokyo. However, Tamago-ya hardly ever missed a delivery deadline. While demand was large and fluctuated from day to day ranging between 60,000 and 75,000, Tamago-ya’s average “loss ratio” (the disposal ratio due to over-production or returns) was only 0.06 percent. This translated to only 42 lunch boxes left over from 70,000 total productions a day.

The combination of strong leadership with customer-focus orientation, empowered workers to achieve continuous improvement, and the unique economic and cultural environment of Tokyo led Tamago-ya to pull off its “magic.”

Bento – the Lunch Box

Tamago-ya offered only one menu per day, but it changes everyday. Each lunch box contained more than six items, most of which were made from organic and natural ingredients (Exhibit 1). The lunches are freshly made each morning and kept warm until delivered. Instead of disposable lunch boxes, Tamago-ya used reusable ones that could be used for up to one year. The overall cost of using reusable boxes was slightly higher than that of disposable boxes, since it took up to nine hours a day to wash and clean all the lunch boxes using specialised equipment and specially-treated water. But reusable boxes offered multiple benefits to Tamago-ya. First, they were more eco-friendly, either by saving trees or avoiding waste. Also, reusable boxes provided van drivers with more opportunities to talk to customers as they collected boxes after the lunches were finished. Valuable customer feedback could be obtained just after the meal. Last but not least, due to the pick-up, customers were obliged to consume the lunch by 1:30 p.m. in its best condiiton.

Exhibit 1

Van Drivers the Utility Players

The combination of strong leadership with customer-focus orientation, empowered workers to achieve continuous improvement, and the unique economic and cultural environment of Tokyo led Tamago-ya to pull off its “magic.”

Tamago-ya did not have salespeople, nor did it spend money on marketing. Instead, van drivers promoted sales when they delivered lunch boxes; they visited offices near their existing customers and introduced the company and its product. For customer retention, van drivers kept close communication with customers when they delivered lunches or picked up empty boxes.

All new customers needed to be interviewed by Tamago-ya and registered in its customer database before they placed daily orders. To reconcile the flexibility to customers and the commitment by Tamago-ya, it screened new customers both by their order size and their location – that is, from a delivery efficiency perspective. Tamago-ya did not accept all potential customers.

Demand Forecasts

Tamago-ya’s forecasting fully leveraged the information captured by van drivers. Every evening, Tamago-ya’s managers and van drivers in each region held a meeting to forecast the number of lunch boxes customers would order the next morning. The primary information source for forecasting was the van drivers’ daily reports. Every day, van drivers wrote a report including their own forecasts of the next day’s orders as well as customer feedback on today’s menu. When a van driver visited customers twice a day, he communicated with the person in charge in an informal and friendly manner, and listened to her evaluations of the day’s menu. The driver also asked her for an estimate of the number of orders for tomorrow. Customers talked to van drivers frankly: “Next week, many people will be away from the office attending a big trade show,” or “Some colleagues say beef steak was a little too salty.” Tamago-ya also used causal data, such as weather, day of the week and the month, and the menu, to forecast demand.

Production and Logistics

The key question about Tamago-ya was how it could produce and deliver an uncertain number of lunch boxes within a short delivery window to so many customers geographically dispersed in the heavily-trafficked Tokyo area.

• Dual-response production: First, build a stock of lunches up to a low-end forecast of the demand, and later, build more (if necessary) based on the up-to-date estimate as actual orders arrive. Tamago-ya counted on five key suppliers who were both nimble and flexible. Tamago-ya committed to the low-end forecasted quantity of ingredients on the previous day, and also carried an option to ask for more if necessary on the morning of production.

• Time-phased prepositioning of stocks: Divide the entire market into two regions by distance from the factory. Dispatch the first batch of vans early to the remotest region well before the order closing hour, with each van carrying an estimated quantity of lunch boxes. (This practice was often called “inventory on wheels.”) After order receipts were completed, dispatch the next batch carrying the exact amount of orders to the nearest region. Transfer stocks across vans to fill any demand-supply gap within and across regions. Use standby vans to adjust any remaining gaps. In fact, Tamago-ya applied this concept to three, instead of two, regions.

The company’s typical daily operational flow was:

• 17:00 – 18:00, the previous day: The total number of orders for the next day was estimated as an interval of low and high ends.

• 4:00 a.m. Tamago-ya received ingredients from 30 to 40 regular suppliers, and kitchen staff started cooking menu items.

• 6:30 a.m. Factory workers started assembling lunch boxes by putting the items together. Since the company had not yet received any orders, it produced lunch boxes based on the low-end forecast they made last evening.

• 8:30 a.m. The first batch of vans loaded the estimated number of lunch boxes for the farthest customers and departed for their designated routes. Tamago-ya has not yet received any actual orders, but production continued up to last night’s estimate.

• 9:00 a.m. Tamago-ya’s operators began taking orders for the day by fax, by phone, or through the Internet. Production continued based on the previous night’s estimates, but was gradually adjusted as actual orders were received.

• 10:00 a.m. – 10:30 a.m. The first batch of vans arrived at their first customer drop-off. The drivers parked their vans in front of the customers’ buildings and waited for a call from headquarters. As soon as headquarters (HQ) received an additional order from a customer, it called the driver for that route to inform him or her of the new order. Finally, the HQ gave a “go” signal to bring the lunch boxes to the specified office. Some customers received their lunch boxes only a couple of minutes after they placed an order.

• 10:25 a.m. The second batch of vans departed the factory for middle-distance customers just before 10:30 a.m. At this point, Tamago-ya had received almost all of the actual orders for the day. They loaded the lunch boxes specified by actual orders for those who had ordered, plus an estimated number of lunch boxes for the customers who had not yet placed an order. Production continued in parallel, with the final number of orders constantly being adjusted. Tamago-ya finally stopped taking orders for the day sometime after 10:30 a.m. (e.g., 10:32 a.m.).

• 11:00 a.m. The third batch of vans loaded the final lunch boxes to fulfill actual orders and departed for short-distance customers. If the first or second batches over-carried lunch boxes, the third batch carried fewer lunch boxes according to the difference. If the previous batches under-carried boxes, the third batch carried more lunch boxes accordingly.

• 11:00 a.m. – 12:00 a.m. If actual orders were different from the estimate, the dispatch centre instructed van drivers via cell phones to move lunch boxes from one van to another, so that the vans had enough boxes and traveled along optimised routes. This dynamic load transfer was done at any place where vans could be parked together (e.g., a public parking lot). Locations and load transfer were determined between van drivers and an area manager. Decisions were based on their experience and intuition; no IT was used.

• 11:20 a.m. Tamago-ya also had 30 extra vans called “adjusters.” Often than not, Tamago-ya could not fill the difference between its forecast and actual orders. Also, accidents happened. The adjusters were dispatched at the last minute when the vans on the field could not adjust the number of lunch boxes on their own.

Portfolio of Supplies – Fixed and Options

Suppliers were a critical part of Tamago-ya’s core competency. Tamago-ya created a portfolio of two supply sources – fixed and options. The following example illustrates how it worked. On a certain day, Tamago-ya’s initial forecast was 67,000 with its low-end forecast 58,000. These two numbers were shared with all supply chain partners. Tamago-ya used its low-end forecast 58,000 to order ingredients from its regular suppliers on the previous evening. This is the fixed portion of its supply. After it started receiving orders, Tamago-ya updated its database every 15 minutes and shared it with all its partners including its five agile suppliers. These agile suppliers, strategically located near Tamago-ya, were involved in the last-hour demand fulfillment process, serving as options. They brought ingredients to Tamago-ya every 15 minutes in response to the updated orders. Tamago-ya cooked the ingredients to produce menu items, which took another 15 minutes. Once food items were ready, Tamago-ya would assemble 500 lunch boxes every minute. By the time orders were closed at 10:30 a.m., the total number of orders turned out to be 66,880 due to the heavy rainfall in the morning, and the gap of 8,880 between the low-end forecast and actual orders was completely filled when the last batch of vans left the factory at 11 a.m. Tamago-ya had its production facilities close to its suppliers, not to its customers, so that it had more flexibility in procurement. It also maintained relatively small warehouses, since it believed larger warehouses tended to lead to larger inventories. Tamago-ya only kept condiments (e.g., soy sauce) in stock for one week. All other fresh ingredients were delivered on demand, and were discarded if left unused for the day.

They loaded the lunch boxes specified by actual orders for those who had ordered, plus an estimated number of lunch boxes for the customers who had not yet placed an order. Production continued in parallel, with the final number of orders constantly being adjusted.

Tamago-ya’s procurement team spent Monday and Tuesday meeting existing suppliers. They reviewed the performance and discussed future plans in pursuit of continuous improvement. On Wednesday, Thursday and Friday, however, they met new supplier candidates who could bring in new values to the supply chain.

Growth, Social Responsibility and the Future

President Sugahara believed that Tamago-ya might already have reached the optimal size at 70,000 boxes per day. If they grew further, he was not sure how the company would source the quality ingredients (e.g., fresh mackerel) without breaking the current sourcing paradigm. He did not see a compelling reason for growing bigger, and preferred to keep Tamago-ya as a medium-sized private company wholly owned by the Sugahara family. In addition, he believed that the company should not be too greedy. Tamago-ya targeted 5 percent net income, with any excess profit reinvested in equipment, or used for better quality of food and higher employee compensations. It recommended the same attitude to its suppliers. In the same vein of social responsibility, Tamago-ya promoted healthy food (e.g., broiled fish and vegetables) ahead of popular food (e.g., hamburgers and fried meat). Chairman Sugahara said, “Of course, the lunch prepared by the wife is the best, and ours is the second.” When asked, “Why don’t you expand to other regions?” Sugahara replied, “It is not easy to replicate the Tamago-ya model elsewhere.” And he added, “We are happy and proud to be in Tokyo.”

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About the Author

Seungjin Whang is Jagdeep and Roshni Singh Professor of Operations, Information and Technology at Stanford Business School. His research interest is in supply chain management and the economics of information systems. Outside, he serves on the advisory boards at large manufacturing companies and a venture capital firm.

What Newly Minted US Online Gambling Sites Can Learn from European Operators

August 21, 2019

It’s now over 15 months since the US Supreme Court made its historic decision on legalized sports betting. The decision hasn’t really opened the floodgates in terms of states offering legalized gambling, but there has been a steady trickle of new laws passed in states like New Jersey, Pennsylvania and Delaware. It’s not abundantly clear how the landscape will look 10 years from now, but you can be sure that many states will have legalized online sportsbooks and casinos.

However, if you look at places like New Jersey, which has just passed its first year with legalized online sports betting and casino, there are still a few issues to be ironed out. Many of the famous names in US gambling culture – Caesars, MGM, Golden Nugget – are based there, but they still lag behind European gaming giants in several areas. Indeed, many European companies are also based in the new American markets, sometimes behind the scenes.

From looking at some of the new sites in New Jersey, there are certain criticisms we can make. We will refrain from singling out individual operators, and instead focus on areas where improvements can be made in the overall industry.

Live betting and streaming

A good European betting operator will not only offer a wide range of live betting markets, but also the chance to watch sports events for free (provided you have placed a bet). The streaming, in particular, has not caught on in the US market, and there is a sense that bettors are missing out. Live betting is about reacting to shifts in momentum, and operators need to be offering complete coverage for them to retain interest. If live streaming is not possible, then a wealth of stats and data should be provided.

Talk to the Banks

Many bettors are still having problems making deposits and withdrawals at online gaming sites in New Jersey, and it’s down to banks blocking transaction on credit and debit cards because they aren’t clear on the law. It’s an easy fix, but operators will need to liaise with credit card companies and banks to clear it up.

Separate the products

Popular European operators like Mansion will have sports betting, poker and casino, but the brand still separates its products. If you go to www.mansioncasino.com/uk/roulette/, you know that you will find roulette and not have sports betting or poker pushed on you. With some the new US sites, there is a sense that they are casinos with sportsbooks (or vice versa). The products should be linked but separate. That might sound like a contradiction, but players will appreciate degrees of separation when it comes to promotions, customer service and so on.

Bring the horses into the fold

For Europeans, an online sportsbook means coverage of all sports, including horse racing. This is not the case in the States, where betting on horses is still controlled by physical sportsbooks on track or specific racebook operators. Sometimes the goals are noble, i.e. to keep people attending the races, but there must be a compromise. Operators could strike a deal with the horse racing industry on revenue share, similar to the one that funds UK horse racing.

Beat Vegas

Experienced bettors know how to hunt for value. In Europe, it’s almost universally accepted that you will get better odds online than at a physical bookmaker’s premises. The online sites have lower overheads, and they can pass that on to the customers. That’s not been the case in the States, and many online sites will lag behind Vegas odds. Part of it is the taxes applied by the states to online gambling, but, again, some sort of compromise could be made. If bettors don’t get bang for their buck, they will lose interest.

8 Things Every Entrepreneur Needs To Get Started

August 21, 2019

At some point in their careers, even the most successful and renowned entrepreneurs have needed to rely on tools or other help to get them ahead. No entrepreneur can succeed purely on determination, business nous, or money alone. In order to make it in the cutthroat and competitive world of entrepreneurship, you’ll have to make sure you’ve got the edge. Here are 8 things every entrepreneur needs if they want to succeed.

1. Sufficient finances

This one might seem obvious to anyone who’s ever embarked on a business venture before, but if you want to be a successful entrepreneur then you’re going to need money. Your startup business won’t fund itself; you can get business loans to help you with capital, of course, but you could also use your personal funds. Personal loans can be good ways to amass capital; the website logbookloans.co.uk is great for vehicle owners, and there are plenty of other resources available for different kinds of loans.

2. A reliable vehicle

If you want to be a successful entrepreneur, you need a dependable vehicle. This won’t just be a way to flash your cash to others; it’ll be your workhorse, your way of getting to important meetings, and your means of conveyance when you need to travel long distances. It’s not worth skimping on expense when it comes to buying a car; you need something that’s going to last. The best cars for entrepreneurs combine speed, utility, and affordability to create great all-round vehicles.

3. Dependable staff

It’s not always easy to know exactly who the right person is for a position with your business, but if you’re going to make it as an entrepreneur, this is a skill you’ll really need. Hiring the right staff means you’ll have to make less difficult decisions. Delegating tasks means you can focus on the things that matter to you rather than sweating the small stuff (although you should still keep an eye on these aspects of your business). Don’t make mistakes when you’re hiring and you’ll thank yourself.

4. Convenient premises for your business

Many people miss this crucial step when it comes to setting up a business. If your premises aren’t in the right place, then your business could seriously suffer. Are you a client-facing company? It’s good to have your premises in the centre of a major city. Do you pride yourself on offering a bespoke client experience? Maybe it’s better for you to set up away from the hustle and bustle. Carefully consider what your business needs and set up your premises to match.

5. Good tech

Most businesses these days rely heavily on IT infrastructure in order to operate. You’ll need computers for your workforce that are quick, that can bear a heavy multitasking load, and that won’t die on you when you need them. It might feel tempting to cut costs by opting for budget PCs, but this will come back to haunt you, especially if your tasks are memory-intensive (graphics editing or video work, for example). Make sure your workforce has access to decent tech, and invest in the best 5G mobile offers.

6. Knowledge of the competition

There’s no point in setting out to establish yourself in a market if you don’t know who else is already in that market. Gaining an understanding of your competitors is vital if you want to know how to offer superior service. This isn’t just searching for your closest rivals on Google; it’s understanding who uses their services, why the customers are going to those companies, and knowing how you can offer a service that will divert customers to you instead.

7. A robust social media presence

Most businesses these days would be laughed out of the room without an excellent social media marketing strategy. Traditional marketing is all but dead, and in its place, the world of influencer marketing and social media engagement has completely taken over. If you’re thinking of starting a business in 2019, you’d better do away with the old ways. Establish a presence for yourself on Twitter, Instagram, LinkedIn, and Facebook, and make sure you’ve appointed someone who can keep up your presence on those sites.

8. Determination

It might sound like a cliche, but the most important thing for a small business owner to have – especially in a world that’s oversaturated by ambitious go-getters – is determination. Failure cannot spell the end for your business venture. Instead, you should learn from every mistake, treat everything as a learning opportunity, and believe in your business so much that you know you’ll never give it up. Fighters make it in business while pessimists flounder. Decide which one you’re going to be.

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These are just 8 things we think every entrepreneur needs to get started in the world of business ownership. Was there anything we missed? Do you think anything is more important than the 8 items on this list?

3 Ways To Improve Your Website’s User Friendliness

August 11, 2019

A website is the main digital footprint of a business. It serves as the access point of the consumers to the goods and services offered by the business. It also provides consumers with ample information regarding various business details such as product or service support, as well as promotions and discount deals. This is the reason why a website should be user friendly at all times and why it’s essential to use the best website builders.

Consider User Feedback

The best way to improve your website is by incorporating user feedback. In this way, you will be guaranteed that your website caters to the needs of your target market. Onboarding forms are great tools that can aid you in gaining insights regarding your user preferences. These forms have the capability to gather user data and feed it directly into your backend system. Hence, the only thing that is left to do is for your users to verify whether the information is accurate. Using online survey forms is another way of gathering user feedback. Compose questions that will enlighten you on what your users want to see and obtain from your website and experiment on implementing these features accordingly.

Optimize Speed and Navigation

Make sure that your website loads at an acceptable speed to keep the users on your site. Users tend to abandon a site that takes a long time to load its contents. Regardless of the platform or device being used by your client, ensure that your website loads promptly. There are several tools that can verify and assure that your site is up to speed. Additionally, it is also necessary to guarantee that navigating through your site is relatively easy for your users. Design a navigation bar that is intuitive enough for your users to follow in familiarizing themselves with your site. Keep the information in your navigation bar short but concise, so as not to overwhelm your users. You can consult a company that specializes in UX/UI design to make sure that all of these factors are considered.

Offer Relevant Content and Systematic Layout

Your website’s content is an essential factor in ensuring that your site is user friendly. Apart from a visually engaging layout, it is important to guarantee that your website’s content is relevant and of value. It should be effortless for users to get the information they need from your site. In line with this, it is also necessary to choose the appropriate colors for your site. For instance, there should be a suitable contrast between your text and the background color implemented. Additionally, your site can be accessed in different devices such as mobile phones and tablets. Hence, it is important to ensure that the layout of your site adjusts accordingly.

In conclusion, there are several ways to make sure that your website is user friendly. Incorporating user feedback, optimizing your site’s speed and navigation, as well as offering relevant content and systematic layout are just a few of these. You can add several tools to your website, making it more useful according to your purpose, whether you are using it as an eCommerce platform or a blog. Keep in mind that the key to a great user experience is continually improving on your website.

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AIMing for Success: The Strengths of the UK’s Junior Market

August 6, 2019

London Charles I Statue. Equestrian Statue of Charles I, Charing Cross, London, United Kingdom. London Symbols.

By Sam Pearse and Ashmi Bhagani

Designed primarily for the equity securities of small and medium-sized growth companies that either cannot, or do not want to, qualify for the Main Market, London’s AIM has seen over £110 billion of development capital raised by more than 3,600 companies since its inception in 2005.

However, a wider context of the turbulent pound, the slowdown in worldwide economic growth, global trade tensions and the ever-present Brexit ‘fog’ have taken their toll on AIM, causing a lull in fundraising activity more recently. Yet, looking beyond this Brexit-induced uncertainty, a number of advantages remain and it is useful to consider the volume of secondary issuances on AIM compared to IPOs, as well as broader M&A trends across all markets.

Why is AIM desirable?

The key advantages of an AIM listing compared to a Main Market listing for smaller growth companies are:

• A flexible and lighter touch regulatory environment governed principally by the AIM Rules (and subject to certain exemptions from the EU Market Abuse Regulation);

• “Exchange-regulated” status (as opposed to EU “regulated market” status), which means that AIM admission documents are not pre-vetted by the UK’s Financial Conduct Authority unless the offering involves an “offer to the public” requiring a prospectus;

• No minimum capitalisation, free float or track record eligibility criteria (subject to a one-year lock-in for companies that have not been independent and earning revenues for at least two years);

• Less onerous continuing obligations and more proportionate corporate governance disclosure standards;

• Lower costs associated with seeking and maintaining an AIM listing; and

• Certain tax benefits for qualifying investors, including inheritance tax relief, stamp duty exemptions and the ability to hold AIM shares in stocks and shares ISAs.

The EU is also making efforts to facilitate better access to the capital markets for small and medium-sized companies. Recent changes to the EU Prospectus Regulation (that came into effect on 21 July 2019) are intended to simplify disclosure requirements on both initial and subsequent offerings on SME Growth Markets, such as AIM, in order to encourage the issuance and listing of shares and promote liquidity in the secondary markets.

Geopolitics causes a slowdown

These factors make an AIM listing particularly suited to technology, fintech and life sciences companies, as well as those in the budding medicinal cannabis industry – all of which are sectors currently enjoying a wealth of start-up activity. Correspondingly, these sectors are expected to see a higher volume of activity towards the end of 2019 as the Brexit trajectory hopefully becomes clearer. Nonetheless, while doubts over the strength of the economy linger, wary investors might look to offset some of the risk by investing in businesses with a strong track record, resulting in an increase in traditional sector IPOs, such as natural resources.

A wider context of the turbulent pound, the slowdown in worldwide economic growth, global trade tensions and the ever-present Brexit ‘fog’ have taken their toll on AIM.

It cannot be denied that investors are being cautious for good reason – Europe as a region is more dependent than others on global trade and therefore more sensitive to ongoing geopolitical tension between the US, China and EU, which has slowed economies across the world. It is therefore no surprise that fundraising activity on the EU’s equity capital markets in the first half of 2019 has been unusually quiet. With only five IPOs and a combined total of only £136 million raised in new issuances (including transfers and re-admissions) in H1 2019, AIM is no exception.

However, the situation is not as dire as it might appear on first glance. Diving further into the figures, AIM companies have raised a further £1.97 billion in secondary issuances over the same time period and market liquidity has also continued to improve, as daily trades and average turnover continue to steadily rise. AIM has even cultivated its own giants – as companies such as ASOS, Boohoo and Fevertree prompt speculation over FTSE-100 indexation and moves to the Main Market with their sizeable, multi-billion-pound market capitalisations.

This is clear evidence that there is a deep pool of capital available in London for smaller growth companies, if they know how to reap it. AIM is undoubtedly a trailblazing incubator for smaller companies looking to move into more profitable growth phases, and yet the fact that it has evolved into a suitable venue for these more mature companies offsets some of the high risk/return volatility inherent to the junior market.

M&A and AIM companies

UK public M&A activity across both the Main Market and AIM increased during H1 2019 compared to H1 2018, with the AIM market registering 13 firm offers to date. Interestingly, no particular sector dominates with a good spread across sectors, unlike the distinct bias in pharmaceuticals, biotech and healthcare of 2018. Technology continues to feature and there has also been some consolidation in the finance/payments sector.

Of the firm offers for AIM companies announced in 2019, there is a fairly even spread between UK and non-UK bidders, with the four US bidders representing the single largest non-UK faction. The overwhelming majority of bidders were listed entities, although only two bidders were fellow AIM companies, namely Taptica International Ltd, which acquired RhythmOne plc, and SEC S.p.A, which acquired Porta Communications Plc. Unsurprisingly all but two of the acquisitions were structured as schemes of arrangement. Only one transaction, Mastercard’s purchase of Earthport plc, was hostile, having originally been recommended, and that offer lapsed.

Even with that brief colour, there are some trends or conclusions that could be extrapolated. For example, the buoyancy of the public M&A market is noteworthy and the flow of transactions concerning AIM companies offers encouragement for those investors less focused on income. We may well be seeing increased activity as the UK faces economically uncertain times. Try as we may, we cannot avoid the fact that Brexit, and the distinct possibility of a no-deal, has negatively impacted the UK economy, at least in the short term. Theoretically, that should mean that there is great value to be found. For example, those companies that operate in sectors that are unlikely to be disrupted by inefficient border controls, such as technology and service companies, and that are sufficiently specialist or that have a global client base, ought to remain fundamentally good businesses attractive to purchasers. That supposition is supported by the earlier comment regarding the technology and payments sectors featuring in the announced deals to date. We might expect that they would suffer from the contagion of the wider economic weakness, creating a buyer’s market. Additionally, the weak sterling would add further lustre to a deal for a non-UK purchaser given the possibility of a currency arbitrage to strengthen an acquisition proposal.

With that outlook, it is logical that we might see a continued level of interest in AIM companies for purchasers. Quite who the buyers will be is trickier to predict. To date, the bidders have been almost exclusively trade buyers, with private equity purchasers absent. There is reportedly a substantial amount of undeployed private equity capital and so that trend may change. Furthermore, a number of activist investor-led or encouraged transactions have featured, albeit the activity is loaded towards the Main Market, with the sales of RPC Group Plc, KCOM Group, Ophir Energy plc and Tax Systems plc serving as good examples where activists have played notable roles. Consequently, we may see those sorts of funds driving acquisition activity, whether to facilitate an exit or to kickstart the next phase of capital growth.

Late 2019 and beyond

Market sentiment on the UK IPO pipeline for H2 2019 (and beyond) remains robust and commentators expect a resurgence of activity once the Brexit dust has settled. This includes a higher percentage of cross-border IPOs coming to both the Main Market and AIM; assuming that the US and China can resolve their trade and tariff issues and there is, in fact, more clarity around the future of UK-EU relations.

Well-prepared flexible growth companies with a strong equity story will find their fundraising windows of opportunity, as demonstrated in H1 2019 and AIM remains the leading junior market in the EU.

However, well-prepared flexible growth companies with a strong equity story will find their fundraising windows of opportunity, as demonstrated in H1 2019 and AIM remains the leading junior market in the EU. It does face challenges from alternative sources of financing, including crowdfunding, peer-to-peer lending, venture capital and competition from alternative junior stock markets such as the NEX Growth Market (which has identical regulatory status but boasts “fast-track” admission, a more engaged service and significant cost reductions). Yet, in a post-Brexit world, it will still be difficult to challenge AIM’s credentials for championing the growth of companies both in the UK and abroad.

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About the Authors

Samuel Pearse, a Pillsbury partner based in London, advises clients in the UK and internationally on a wide range of complex corporate and securities transactions. Experienced in M&As, capital markets, joint ventures, investment funds, private equity and finance, Sam advises on cross-border investments, acquisitions, disposals, restructurings, accessing capital markets and corporate issues.

Ashmi Bhagani, a counsel in Pillsbury’s London office, focuses her practice on corporate finance, mergers and acquisitions and investment funds transactions. Ashmi has a broad range of experience in complex cross-border transactions, advising on international equity and debt capital markets financings, mergers and acquisitions, private equity and investment funds and joint ventures.

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