November 30, 2005 | posted by Michael Baxter in Uncategorized | comments (0) |

If the new Wembley Stadium is a trial run for the Olympics then we’ve got a problem.

The new football stadium, which can already be seen across London, might not be finished in time for the FA cup final next year and yesterday bookmakers Coral Racing Ltd said it’s no longer taking bets on whether it will be finished on time because the chances of a delay are too high. The £757mn stadium - the most expensive in the world, is due to be ready in March, but then, says the FA, it will take two months to prepare the stadium for the Cup Final.

Multiplex, The Australian company which is building the stadium insists the build is on schedule.

Our predictions: the next set of headlines will relate to the weather. If this winter is as cold as the weather men are warning then snow and blizzards could delay things further.

Should Wembley not be complete on time, egg will be left spluttered over the faces of all involved. We suspect that if necessary, they will move heaven and earth to avoid this.

November 30, 2005 | posted by Michael Baxter in Uncategorized | comments (0) |

According to a report from Gartner there will be a 50% growth in IT investment in the healthcare sector between now and 2013, and this could enable clinicians to reduce the level of preventable deaths by 50 percent by 2013.

Wes Rishel, managing vice president at Gartner, a leading research company said, “The earliest adoption of IT — and realization of improved safety and cost containment — will occur in markets where the ultimate payers exercise leadership to stimulate simultaneous adoption of IT, consensus quality measurements, transparent reporting and aligned financial incentives. The largest IT challenge in most countries will be deploying IT to the numerous small practices that provide most primary care.”

Gartner also identified five other IT related trends, which will have a significant impact on both individuals and business.

IT specialists will find their expertise becoming less valuable, with the emergence of IT “versatilists,” people whose multidisciplinary assignments, roles and experiences create a valuable blend of synthesized knowledge, competencies and context to fuel business value. Gartner says that the market for IT specialists will fall by 40%, and the best bet for the IT guys will be to ensure they “focus on a rapid and intentional expansion from technical specialization to business competence.”

Other major trends identified include the further shift away from traditional telecommunications, so that by 2010, 30 percent of U.S. homes will use only cellular or Internet telephony.

Gartner also predicts that by 2008, thanks the emergence of more consumer related applications, employees will be expected to provide their own notebook computers. Wthin three years 10% percent of companies will require employee-purchased notebooks, and we will see the emergence of notebook allowances, a lot like car the car allowances many of us our familiar with today.

Other trends identified include growing competition to the insurance industry from Business Process Outsourcing. Gartner reckons that by 2008 the companies our insurers and banks outsource to, will be able to launch their own services. Gartner says, “Intellectual capital is migrating from insurers to BPO providers, enabling the providers to become competitors.”

Finally, Gartner says that regulatory compliance costs are eating up IT budgets. It said, “regulatory compliance spending is growing at a rate twice that of IT spending, and in many case, discretionary IT budgets are entirely consumed by compliance efforts, stifling initiatives that are important to business growth. “

November 30, 2005 | posted by Michael Baxter in Uncategorized | comments (0) |

Just as the property market experts have been busily saying, “see, told you talk of a property market crash was ridiculous,” the OECD has spoilt their celebrations, warning that house prices in the UK, Ireland and Spain were significantly overvalued.

But before the OECD put the cat amongst the pigeons, Nationwide released its monthly report on the market. It had house price inflation at zero in November, after reporting a 1.3% rise the previous month, and suggested the latest data was yet more evidence of the much heralded soft landing.

Its Group Economist Fionnuala Earley said, “An historically high house price to earnings ratio and the rapid cooling of house price inflation from levels of around 20% between 2002 and 2004, led many commentators to predict a severe correction to the market in 2005 with large house price falls as overall confidence in the market evaporated. However, data over the last 6 months shows that house price inflation has stabilized at a lower level of 0-2%, achieving the “soft landing”. The Bank of England raised interest rates carefully in 2004 and can take some credit for the gradual and controlled slowdown.”

She added, “Encouragingly, forward indicators continue to suggest that confidence in the market remains. Estate agents are reporting increasing buyer interest and that buyers and sellers are reaching agreement on price more readily. This reflects an overall picture of stability rather than acceleration.”

More grist was added to the soft landing mill, when the Bank of England released its latest figures on mortgage lending. Gross mortgage lending was up 32.5% in October from the same period a year ago. It’s the fourth successive month of rises in the year on year figures, and the largest monthly rise for some time.

But then along came the Paris based Organisation for Economic Co-operation and Development. The highly respected global institution said that the rate of interest is the key and that, “If these rates were to rise sharply over the coming period - a possibility that is currently treated as a risk in the OECD’s projections - house prices would come under downward pressure.”

But while the UK, Spain and Ireland, in particular, have got the OECD worried, the US, contrary to other reports, is safe. The OECD said, “in Denmark, Finland, France, Norway and the US, house prices were broadly in line with market fundamentals.” A number of commentaries have theorised that the US is about 9 months behind the UK, and that the UK is a good barometer for the US property market, just as Australia - where house prices in some cities are down, but stable elsewhere, provides a good indication of what will be happening in the UK soon.

But there’s good news for property investors interested in Germany and Japan, and to a lesser extent Switzerland. The OECD believes properties are undervalued in thee countries.

November 29, 2005 | posted by Michael Baxter in Uncategorized | comments (0) |

Worried about your pension? Not keen on the idea of working until you are 69.8? (see yesterday’s issue,) then best if you look for an alternative. And that says the Royal Institute of Chartered Surveyors is what Buy to Let Investors are doing. RICS reckons that just 4% of Buy to Let investors are now selling their investment properties when tenancies came up for renewal, that’s half the level seen last year.

RICS spokesperson Jeremy Leaf said, “many buy-to-letters are now choosing to stay in for the long haul, viewing their investment as a more significant part of their pension plan.”

“For the time being at least, this looks set to continue, with public confidence in pensions at an all time low.”

Equally, of course, Buy to Let investors might be selling less readily now because they know it will be harder to find a buyer.

November 29, 2005 | posted by Michael Baxter in Uncategorized | comments (0) |

BP is moving away from oil. It’s currently in the throws of a high profile marketing campaign under the slogan Beyond Petroleum and yesterday, the oil giant revealed plans to double its investment into alternative energy.

It’s investing $8bn over the next ten years, and reckons that it will build the largest alternative power business in the world, worth $6bn a year in revenue.

Chief executive Lord Browne said, “We are now at a point where we have sufficient new technologies and sound commercial opportunities within our reach to build a significant and sustainable business in alternative and renewable energy.”

BP Alternative Energy will be based at Sunbury, Middlesex, and will focus on wind and solar power, hydrogen, and rather oddly in our humble opinion, gas-fired power generation.

The Friends Of The Earth weren’t convinced by the inclusion of gas either, and its director Tony Jupiter said that gas is a conventional means of energy, so it shouldn’t be counted.

Lord Browne added, “Of course, what we are announcing today is not an instant, magical transformation of the energy market. It is a very realistic, practical step in a new direction. For the foreseeable future, for decades to come, the world will need hydrocarbons, and we will continue to invest in order to produce and sell oil and gas in the cleanest, most efficient way possible.”

But Tony Juniper could only mange half a compliment, saying, “This is a step in the right direction. But considering the scale of the company, this is still a modest initiative. BP’s core business is still the production of fuel from oil, which is one of the main sources of climate change.”

November 29, 2005 | posted by Michael Baxter in Uncategorized | comments (0) |

Hoover, and perhaps now Dyson, Biro and Coke: the business text books are full of examples of brands that have become so well know that the brand name has become synonymous with the generic product.

Maybe Blackberry is the latest example. Half of all corporate emails for mobile phones use Blackberry and when customers enter phone shops looking for a mobile phone for sending email, they often just ask for ‘Blackberry.’

But, for how much longer will Blackberry have the brave new world of email for mobile phones for itself?

Yesterday Vodafone announced a new email service, Vodafone Business Email, which uses push email software from Wisto. It’s a move which is sending out confusing messages since the company already sells Blackberry products and phones which are compatible with Microsoft software. In fact Vodafone finds itself in a difficult spot. As the world’s leading mobile phone network provider it needs to take a leading role in promoting email. But when it comes to Microsoft and Blackberry products it’s little more than a middle man. That’s not really good enough, hence the new move.

But this time even Vodafone might find the competition too tough, and as for Blackberry, some fear it could go the way of other pioneering companies such as Netscape or Psion, and ultimately be relegated to a bit player in a market it practically invented.

Nokia and Microsoft are both attempting to move in on the corporate market. Blackberry of course, has a massive head start, but only 1% of corporate email services allow the forwarding of messages to mobile phones. Research in Motion, the company behind Blackberry has got a problem hanging onto its lead. The snag is that Nokia, which really sees email as another feature to use to sell phones and Microsoft, which wants to make its software even more ubiquitous, are, according to Reuters, practically giving software away for free.

November 29, 2005 | posted by Michael Baxter in Uncategorized | comments (0) |

In times of trouble, investors often rush for gold. At least that’s how it used to be, but these days, gold is seen by many as…well as a metal for making jewellery

It hit an all time high in January 1980, when it was going for $873 an ounce, since then the movements in the price of gold seem no more than incidental. And its price has languished at half that peak level for most of the 25 years since, falling just $250 in the months leading up to the disaster of September 11 2001.

Yesterday however, gold was back in the news after it hit an 18 year high, and this morning broke through the psychological barrier of $500 an ounce.

But what does this mean? Does it mean something sinister - is gold still a safe refuge - meaning investors don’t feel safe? Or is its rise down to more mundane factors?

Some say gold has been pushed high by Arab oil states simply in need for somewhere to put their profits. Others say the rise in gold is due to the developing economies, new as they are to the world of high finance, opting for a traditional home for their reserves.

But there is a counter view. Earlier this month (4 November) we referred to a report from HC Wainwright and Co for the World Gold Council. This suggested that actually the price of gold, and other precious metals such as silver and platinum, are good indicators of further inflation. For some time some analysts have argued that these days gold is a better barometer for inflation. The reverse argument to this is that actually, in the long term, oil at a high price is deflationary, as it takes money out of consumers’ pockets. Whereas, goes the argument, gold provides a much purer measure.

Only time will tell. Maybe gold north of £500 spells doom ahead. Maybe, the recent gold boom is no more than a bubble, perpetuated by investors jumping in because they see the price has been going up, and want some of the action. In which case, the boom in the yellow stuff could be no more than the latest example of… ‘fools gold.’

November 28, 2005 | posted by Michael Baxter in Uncategorized | comments (0) |

The global mobile phone market is set grow faster than is widely expected next year, says Nokia. The world’s leading mobile phone company reckons that the number of subscribers in China will jump from 380million at the moment, to 630 million by 2010.

November 28, 2005 | posted by Michael Baxter in Uncategorized | comments (0) |

Wander around Liverpool Street and the station concourse: it’s awash with city types using their Blackberry mobile phone for sending and receiving emails.

In the US, there could be trouble ahead. There’s a legal dispute between Research in Motion, the company behind the Blackberry phones and a small private company called NTP. The dispute is not new, back in 2001, NTP first filed a suit claiming that Research in Motion had infringed one of its patents. At the tail end of last year settlement appeared to be reached and Research in Motion agreed to pay NTP $450mn.

Since then however, NTP has changed its mind, and for reasons not widely known is pursuing the case. This week, a judge will be deciding the issue, and it’s possible that the upshot could be no more Blackberry phones in the US - although the smart money seems to be saying this outcome is relatively unlikely.

November 28, 2005 | posted by Michael Baxter in Uncategorized | comments (0) |

With the Turner report into pensions to be unveiled this week, the UK pension crisis is set to sit centre stage of the economic debate in the days ahead.

Up to now the debate has been focused on the time we should retire. Writing in the Sunday Times David Smith, for example, suggested that in 2050, the average retirement age would need to rise to 69.8, just to keep the proportion of GDP transferred to each pensioner at the current level.

But Deloitte have been taking a good look at what other countries are doing.

In New Zealand something called the ‘Kiwisaver’ account will be introduced in 2007. This entails an automatic enrolment into a company pension, with any employee who does not want to take part having to opt out.

This contrasts with the Australian system, which has a compulsory occupational pension. It’s a similar story in Sweden, where there’s a compulsory system with no opt-out.

The Australian model entails a strong role for private sector pension providers in administering and managing pension savings. In New Zealand, the government collects contributions but allows management of accounts and investments by industry providers and fund managers. While in Sweden there’s a State-administered system with external fund managers chosen by the individual employee - there’s no employer role in selecting the fund.

Finally, as for level of contributions: In Australia current contribution levels are 9% of salary. In New Zealand there’s a minimum employee contribution of 4% of earnings but they may choose to contribute 8%.

Mark FitzPatrick, Head of the Insurance Practice at Deloitte said, “The complexity of the pension arena means that a ’silver bullet’ solution to the pensions’ crisis is a pipedream. Consumers, employers and the financial services industry alike will be affected by whatever recommendations Turner makes next week. Depending on the recommendations, the 30 November could trigger a sea change in pension provision with huge significance for the whole of the UK from the man on the street up to the chairmen of the big financial institutions.”