British investors pulled a record 503 million pounds from equity funds in June
The money was directed to money market funds.
Reports from Calastone show that the investors now prefer Money market funds, a place of relative safety and yield, as the U.K. economy
Investors in the U.K. have flocked into money market funds, according to a June report from Calastone, in the second-highest move of its kind in the country’s history. The move comes when the U.K. economy is in distress due to the rising inflation rate dragging costs of living up with it.
The U.K. Investors pull $842 million from equity funds in favor of money market funds
Figures from Calastone show that U.K. investors are walking away from Equity funds, with body funds raising the highest numbers, 880 million pounds of new money in June. Another record 503 million pounds went into money market funds.
The money that went into these markets was heavily transferred from other asset types like equity, missed assets, and property funds. The June report indicates that investors lean heavily toward fixed-income and money markets as the global economy endures high inflation rates.
The report also indicated that “strong outflows” were seen in the U.K., North America, and ESG funds in equity sectors. The firm also noted that Technology funds benefitted from the A.I. hype.
June’s figures are but a representation of the global migration of assets from Equity funds over the past 12 months. In the time frame, investors pulled 3.6 billion pounds from equity funds while pumping 7.9 billion pounds into fixed income.
Edward Glyn, head of global markets at Calastone, noted: “Fixed-income funds and their money market cousins have not looked so attractive since before the global financial crisis. At the same time, recession fears are stalking equity and property markets – investors are nervous. The result is a flight to safety.”
He added that money market funds currently offer income at a rate of 5% or more in a relatively lower risk, with fixed income funds offering the chance to lock into the “highest yields in years.”
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It’s refreshing for all Americans as you celebrate your country’s independence. Fintech Express wishes you all a happy time. However, we also wish to make you reflect on what financial freedom and independence could mean to your lives.
What is Financial freedom?
By definition, financial freedom means having enough financial resources to pay for all living expenses and achieve your life goals. How about we bring in the word of the day, “Independence.”
Independence simply means to be self-sufficient. It’s where you do not have to rely on the mercy of others to achieve your desired outcomes. Independence should go hand in hand with freedom when it comes to finance.
Find a way to intertwine the two, and you will have saved yourself a great deal of pain. Financial pain can come in two ways:
Not having resources
Having resources but not being able to access them
Get the government away from your wallets
As mentioned above, financial freedom can come from being unable to access your hard-earned resources during a time of need. Try withdrawing a million dollars from your local bank in a day. You might get it in less than two.
What does this tell you? The banking system needs to be fixed in its way of functioning. It will deter you from accessing your funds. We have seen bank freezes happen, transactions decline, and governments introduce withdrawal limits. Is this freedom? Does it show any financial independence? I don’t think so!
Yes, you guessed it right. He introduced Bitcoin to the world in one of the darkest periods in the history of Central Banking, the 2008 financial collapse cycle. Bitcoin has inspired many other decentralized crypto projects that do away with the need for trusting governments and banks with your money.
This Ark is what will empower your independence as you seek financial freedom. However, you have to take your time and research how to protect yourself in the crypto industry. But no worries, that’s where we come in. Fintech Express is at your service to offer you educative content along your research voyage in the crypto ocean.
May you enjoy a lifetime of independence!
This article is not financial advice or a marketing tool for any asset or field. However, it is meant to invoke the feeling of freedom and spark the fire of thought and adventure. We wish you a lifetime of financial independence and freedom! Till we meet again!
Britain has been left behind as the only major economy in the world experiencing higher inflation rates over time.
Rates hikes are ongoing in the U.K. with no end in sight, but inflation remains relatively high.
OECD report for June 4, 2023, indicates that inflation fell to 4.6% among G7 members in May, with Britain being the outlier
Britain keeps experiencing increased economic pressure as inflation levels remain higher than its competing economies despite numerous rate hikes. The country is expected to endure a longer period of tough markets owing to interest rate hikes to tame inflation for the better part of the year.
Britain’s government and central bank set on a collision course in inflation rates blame game
The British government and the Bank of England are set on a collision course now regarding the taming of inflation rates as the country keeps experiencing higher rates than the surrounding regions.
A Tuesday report from the Organization for Economic Cooperation and Development (OECD) shows that the G7 nations had a combined inflation rate of 4.6% in May, down from 5.4% in April, which is also its lowest level since September 2021
Comparatively, Britain lags with a CPI of 8.7%, almost double what its compatriots post. The country is also under more pressure as the economic growth has stagnated, and the public debt surpassed 100% of the GDP for the first time since March 1961.
At the same time, markets are tense about further interest rate hikes that are necessary for the fight against the spiking inflation rates. However, it still seems more difficult for the Bank of England to pull off a 2% inflation rate target by the end of 2023 without plunging the economy into a recession.
In January, U.K. Prime Minister Rishi Sunak vowed to halve the inflation rates in the country by half by the end of the year. If he is to deliver this pledge, the markets would have to brace for more pain as the housing sector is already under mayhem. Over 2 million households can now barely pay their mortgages, with June’s 50 basis points hike in interest rates feared to have pushed the numbers higher.
However, the Bank of England has indicated that the labor market is still strong. At a monetary policy forum in Sintra Portugal, Bailey noted that the U.K. labor is unique in remaining below the pre-Covid levels.
“I see this when I go around the country talking to firms. They say to me frequently that their plan is to retain labor as much as they can, even in the event of a downturn, because they’ve been concerned, and it’s been difficult to recruit labor,” he said.
However, Bailey denied that Brexit was to blame for the economic constraints that Britain is enduring. The Bank of England had, however, indicated that England’s productivity would have a long-run drop of 3% due to Brexit. In connection to the story, Catherine Mann recently told a parliamentary committee that additional paperwork was to blame for smothering small firms and driving inflation up.
“It’s not just small firms in the U.K. who want to export, but it is also small firms in Europe who were suppliers and provided competition in the U.K. market, so there is an inflationary effect coming through the competition channel,” she added.
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Kenya’s President Ruto has received rather dissatisfying news after the High Court of Kenya deemed the appointment of 50 CASes meant to deputize 22 Cabinet Secretaries unconstitutional.
The High Court decision is a hit to the President and comes days after it suspended the enforcement of the ‘controversial’ 2023 Finance Act.
Kenya’s High Court deemed President Rutos’ 50 assistant cabinet secretaries unconstitutional just days after suspending the highly controversial Finance Act. The decision follows an uproar of continued overspending from the Kenyan government while the country is in financial distress.
President Ruto won’t get his CASes as the country has a bad financial outlook
Kenya has witnessed a ruling that will bar the government from hiring 50 CASes to deputize only 22 Cabinet secretaries across its ministries. The High Court gave this ruling on July 3, 2023, claiming that the math isn’t right and doesn’t show any intentions of serving the country’s nationals.
President Ruto’s government has been in the spotlight for its increased overspending, borrowing, and over-taxation while a financial crisis continues. In June, the Central Bank of Kenya hiked interest rates by 100 basis points, taking the rates to 10.5%.
The CBK Governor Kamau Thugge pointed out that recent inflation data shows a need for more to be done. June had 7.9% inflation rates, while May and April had 8.0% and 7.9%, respectively. At the time, food prices were significantly high, with SUagr having an inflation rate of 58.1% YoY and Electricity at 53.4% YoY.
Thugge highlighted that the government had borrowed KES 436B in the 2022/2023 fiscal year, with the country’s stock of external debt crossing KES 5.1T accounting for the 52.9% of gross public debt that stands at a staggering KES 9.63T. He added that the non-performing loans ratio stood at 14.9% in May, up by 30 basis points from April.
He added that the Private sector grew by 13.2% in May, unchanged from April. He topped up, saying exports grew 5.5% in 12 months ending May while exports fell 2.3%.
Finance Act 2023 suspended pending hearing
In connection to the concerns surrounding the Kenyan government’s spending and borrowing, the country’s Auditor General told Members of Parliament on July 2, 2023, that there are no records of public debt which places the efforts of paying it off in doubt whether they are effective or there is corruption involved.
Due to these issues, lawyer Okiya Omtatah filed a lawsuit against the Kenyan Government in the High Court, deeming some parts of the highly contested Finance Act as unconstitutional. The High Court of Kenya ruled the suspension of the implementation of the already signed into law Finance Act on hold which slams President Ruto’s plans to raise more funds via higher taxes.
However, the nation’s Energy and Petroleum Regulatory Authority (EPRA) went against the High Court ruling. It introduced new Petroleum product prices following the taxes implemented by the Finance Act. As a result, lawyer Omtatah expressed that he would sue EPRA for defying court orders.
In other news, the World Bank had expressed concerns over the increased taxes that came with the Finance Act saying that it could dwarf the economic growth in the East African country, but President Ruto did not take the suggestion. The bill was passed quickly in the country’s two parliamentary houses and signed into law. Now, the case on President Finance Act is set to be heard on July 5, 2023, by the High Court.
“That I am satisfied that the Application meets the test for conservatory orders, and I do grant prayers 2 and 3 of the Application until 5.7.23 when the matter is scheduled for mention for directions,” ruled High Court’s Justice Thande
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Tension has subsided in the oil markets after Belarus’s Lukashenko brokered a peace deal between Yevgeny Progozhin and President Vladimir Putin.
Pregozhin had attempted to overthrow Putin over claims that the Russian Military had killed his Wagner paramilitary soldiers but aborted the mission after 24 hours only.
The oil markets had feared that any disruption in Russia would impact the global supply chain as resources get focussed on another ware other than oil production.
Oil markets have calmed down due to the brokerage of the peace deal between rebel Yevgeny Prigozhin, the head of the Wagner group, and President Putin. Prigozhin had led his army of mercenaries to the Russian capital in an attempt to eject President Putin for alleged attacks on his men.
Hope in sight for oil markets after Belarus brokers Russia peace deal
Oil markets have settled after prices started to hike following the news that a civil war could have impacted Russia. The oil markets are now calm as investors are promised that Prigozhin will no longer attempt a coup against Putin after a peace deal was brokered by President Lukashenko, who will oversee Prigozhin being transferred to the country.
Russia is a major oil producer, making further constraints like a civil war enough to impact the global supply chain. As such, investors watched warily as the coup attempt began on Saturday, which could have ended Putin’s 23 years of power.
The Wagner Group paramilitary had taken control of Rostov, where several major oil and gas pipelines intersect, before the coup attempt was called off. This act held the oil markets, hostage, as any disruption in the country would have greatly reduced the global oil output.
West Texas Intermediate futures were up marginally by about 0.22% in afternoon trade in Asia, initially rising as much as 1.3% to just below $70 a barrel earlier Monday, followed by last week’s almost 4% decline.
Brent crude was trading about 0.3% higher at midday in Asia.
“If it had led to disruption in oil supplies from the Russian state, I think what you would have seen is a disruption which could have been anything from a couple of million barrels all the way up to 3.5-4 million barrels,” said Standard Chartered’s Alok Sinha told CNBC.
“Now that kind of disruption even if it’s short term could have really roiled the markets really badly,” he added.
Keep watching Fintech Express for more updates on Macro-finance and other Fintech-related developments.
Gemini’s Cameron Winklevoss believes that the race by traditional finance institutions to file for BTC ETF marks a great turnaround for the industry.
He tweeted on June 21 that the window to front-run institutional demand is closing quickly.
Cameron Winklevoss, a Gemini co-founder, believes that the great accumulation for BTC is here with different TradFi institutions racing to buy in. His comments come when BlackRock, the world’s largest investment manager, filed for an ETF, prompting its competitors to follow suit.
ETF filing race by TradFi institutions convinces Cameron Winklevoss that BTC will rally
Analysts now believe that more than ever, more institutional demand for prominent coins like Bitcoin is coming to the crypto space. It follows recent news that BlackRock had filed for a spot in Bitcoin ETF.
As a result, its competitors like Valkyrie, Wisdom Tree, and Fidelity have filed for similar assets with the US SEC. This has driven the demand behind Bitcoin momentarily, with it reclaiming the 50% market dominance. The coin has surged 19% to $30,240 since the BlackRock news came to light on June 15.
Cameron Winklevoss, a Gemini co-founder and a prominent loud voice in the crypto industry, has commented on this matter, saying that “The Great Accumulation” of Bitcoin has begun. He suggested that buying Bitcoin before the ETFs hit the markets would be a great idea akin to a pre-initial public offering purchase of Bitcoin.
The Great Accumulation of bitcoin has begun. Anyone watching the flurry of ETF filings understands the window to purchase pre-IPO bitcoin before ETFs go live and open the floodgates is closing fast. If bitcoin was the most obvious and best investment of the previous decade, this…
He added that if Bitcoin was the best-performing asset of the past decade, it would most likely be the best-performing asset for the coming decade. Others have backed his claims, including MicroStrategy Executive Chairman Michael Saylor, who suggests that retail investors may soon be pushed aside by increasing institutional demand.
However, some analysts believe that more buying pressure will be there than selling pressure, as most investors wouldn’t want to sell their coins to Wall Street. Bitcoin investor Anthony Pompliano took to Twitter to address the matter, saying he expects a tug-of-war between retail investors and Wall Street:
“We have institutions and individuals scrambling to try to get their share of the 21 million Bitcoin that will ever be in existence. The retail investor for 15 years now has a head start and has accumulated all the Bitcoin that’s been mined and put into circulation, but 68% of that hasn’t moved in a year.”
BlackRock shows up and bitcoin is up 20% for the week.
People forget that bitcoin went from $0 to nearly $1 trillion market cap with almost no institutional participation.
If retail investors were good for $1T, what do you think happens when the deep pockets come play?
He added that he expects Bitcoin to be highly illiquid once Wall Street hits the market as investors keep their coins away from institutional investors. Keep watching Fintech Express for updates on crypto adoption and other Fintech-related developments.
