1 UK property fund turmoil continues (Jill Treanor
& Hilary Osborne in The Guardian) Shopping centres, office blocks and
warehouses worth up to £5bn could be put up for sale as the turmoil in the UK
commercial property sector prompted by the Brexit vote forces fund managers to
revalue their portfolios or temporarily prevent investors withdrawing their
savings.
With the pound under pressure on the foreign
exchange markets, fund managers Legal & General, Foreign & Colonial and
Dutch-owned Kames cut the value of their property funds. L&G cut the value
of its £2.3bn fund by 10% – following a 5% cut last week – while F&C and
Kanes both cut by 5%.
Aberdeen Fund Management announced on Wednesday it
was halting trading in its property fund for 24 hours and devaluing it by 17% –
thought to be the biggest adjustment ever made by a property fund . Aberdeen
has since extended the trading ban until Monday.
Others have suspended dealings for longer, starting
with Standard Life’s decision to halt trading in its £2.9bn commercial property
fund, leading to a cascade effect with Aviva, Prudential’s M&G, Henderson,
Columbia Threadneedle and Canada Life following suit – taking the total value
of property funds suspended to £18bn.
One of the factors weighing on sentiment is
uncertainty about the role of London as a financial centre outside the EU.
George Osborne, the chancellor, met the heads of major international banks
including Goldman Sachs and Morgan Stanley to discuss ways to keep the City as
a major trading centre.
The turmoil has coincided with pressure on the
pound, which has been trading at 31-year lows. Yields on UK government bonds –
known as gilts – which have halved to 0.7% since the referendum are also being
watched as investors seek safe havens and brace for a cut to interest rates.
2 Australia’s AAA rating in danger (Khaleej Times) Standard
& Poor's has warned of a downgrade to Australia's coveted triple-A credit
rating within two years, saying the knife-edge July 2 election may have
weakened the government's ability to tackle its budget deficits.
It cut its outlook to negative from stable and said
there is a one-in-three chance of a ratings downgrade should the government
fail to materially improve its balance sheet. "We will continue to
monitor, over the next six to 12 months, the success or otherwise of the new
government's ability to pass revenue and expenditure measures through both houses
of parliament," S&P said.
Shane Oliver, head of investment strategy and chief
economist at AMP Capital, said the negative credit watch should come as no
surprise. "Australia has now seen years of slippage in returning the
budget to surplus and the messy election outcome threatens more slippage
whichever way it goes," he said.
S&P last downgraded Australia's credit ratings
in October 1989. In May 1999, the agency upgraded the rating to AA+ and in
February 2003, it restored the nation's top notch AAA rating where it has
stayed since. On the positive side, S&P said it considered Australia's
banking system to be one of the strongest globally and described the country as
a "wealthy, diversified and resilient economy".
3 How Chinese trawlers
empty Guniea’s oceans (Tamasin Ford on BBC) Chinese fishing vessels operate
illegally off the coast of Guinea, depleting its fish population and destroying
marine life. Despite the economic and social consequences of illegal fishing,
the Guinean government has failed to police its waters because it doesn't have
money to operate surveillance equipment.
The UN estimates that
illegal fishing strips the global economy of more than $23bn every year. And
the waters off West Africa have the highest levels of illegal catch in the
world, according to the UK-based non-profit organisation, the Environmental
Justice Foundation (EJF). More than a third of all fish caught in the region is
illegal, unreported or unregulated, it says.
"These illegal
pirate fishing operators are in effect stealing from some of the poorest people
on our planet to provide short-term profit to wealthy fishing operators,"
says EJF head Steve Trent.
He says a mixture of
poor governance, limited resources and corruption create a situation ripe for
exploitation. And Guinea is one of the worst examples. It's the only country in
Africa banned from exporting fish to Europe; the world's biggest market.
Illegal fishing in Guinea got even worse as the
country was battling the deadly Ebola virus, according to a Greenpeace
investigation. "During the Ebola outbreak, the country focused all their
resources and capacity to deal with Ebola," says Ahmed Diame, the Africa
Oceans campaigner at Greenpeace. During a month-long mission at the end of 2014
while Ebola was ravaging the country, a Greenpeace ship spotted an illegal
Chinese trawler once every two days.
Most of the Chinese vessels are known as bottom
trawlers; banned in some parts of the world because they are so destructive. They
scrape up everything from the bottom of the ocean, ripping up coral and oyster
beds, taking with them everything in their path. "Up to 90% of the catch
can be thrown back into the sea often already dead," according to
Greenpeace.
Greenpeace also started another investigation in
January this year across Cape Verde, Mauritania, Gambia, Guinea, Guinea Bissau,
Sierra Leone and Senegal. It will take three years, but the organisation hopes
it will get a more detailed analysis of the situation.
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