Superjumbos Push Airbus Production to Record Highs
Insider figures revealed that Airbus delivered three A380 superjumbos in December, bringing its total production levels last year to a record 498 planes.
That provided a boost to the UK’s manufacturing industry, since the wings for Airbus aircraft are designed and made in the UK at Filton in Bristol and Broughton, North Wales. Despite the collapse in demand for flights and cargo transport during the recession, Airbus’s parent company EADS picked up new orders to make 311 aircraft in 2009.
Airbus delivered 10 A380s last year, down from 12 the year before. It has already announced a review of the aircraft’s manufacturing process after continued delays, mainly due to the extensive customization allowed on each $328 million plane.
Aircraft production levels have increased on the back of an order boom that peaked in 2007, although some analysts have warned demand could be squeezed in 2010.
Wolseley Pulls Plug on Irish Arm
Plumbing and central heating supplier Wolseley agreed to sell its Irish unit for €26.5 million to concentrate on its core business in Britain. The firm, which trades as Plumb Center and Build Center in the UK, offloaded loss-making Wolseley Ireland Holding Limited to private buyer WIBHM. The unit operates as Heat Merchants, Brookes and Tubs & Tiles in Ireland, and has 67 branches and about 650 staff. It had losses of €34 million last year. The disposal was expected after Wolseley said in September that it would restructure and focus on Britain, the US and Scandinavia.
House of Fraser Christmas Cracker
Department store chain House of Fraser had its best ever Christmas and a Boxing Day sales jump of 27%.
Chief executive John King said the performance reflected efforts to improve the business through store refurbishment and the popularity of own-brand products.
Sales were up by 7.1% in the eight weeks to 2 January. Online sales rose by 91% in the period, with cosmetics, knitwear and boots the most in-demand items.
Big Change in German Habits
Institutional investors in Germany moved en masse in 2009 to express their disappointment at the failure of the asset managers they employed to deliver what they had promised. A recent survey by Ferri Euro Rating Services of 128 large institutional investors revealed that more than one in four fired an asset manager in 2009, a much higher proportion than has been seen before.
However, while this figure is spectacular, it doesn’t tell the whole story about the current fundamental change in institutional asset management. The survey also indicated that European equity mandates, a cruicial pillar of a German institutional investor’s strategic asset allocation, accounted for half of the stated mandate cancellations. And when asked about their reactions to the financial crisis, most investors reported an intention to overhaul their internal risk management processes and raised their allocation to bonds, even though, on average, they only hold a record low 6% in stocks already and are loaded with fixed income securities.
So what is the whole story? The evidence of the survey underscores what many investment professionals have observed throughout the past months, more and more German institutional investors are abandoning their traditional approach of investing for the long term. With up to 30% invested in corporate bonds and a record low equity exposure, often fully insured by derivatives, many investors have moved well away from their strategic asset allocations, which set out quotas for different asset classes to meet an investor’s long-term liabilities.
Instead short-term tactical considerations and the desire to act moe opportunistically and aggressively in the markets have won the upper hand in the decision-making process. Avoiding losses or even temporary writedowns on investments by year end has become the top priority as opposed to staying in line with the strategic asset allocation. As a result, few investors profited from the soaring stock markets in 2009. The majority are left with limited flexibility to invest in more risky assets that could potentially help rebuild reserves through higher returns.
This fundamental change of investment behavior has caused investors to turn their backs on traditional long-only mandates. They have started to invest large sums of money in absolute return mandates and dynamic portfolio insurance strategies. Both can typically engage in a wide range of asset classes and in instruments like swaps and derivatives, refrain from using indices as benchmarks and aim to limit losses without cutting the upside potential too much.
There is little doubt among asset managers such as Union Investment, Universal-Investment, DB Advisors, Lupus Alpha and Pioneer, that these so-called asymmetric returns, as opposed to the symmetric returns that long-only investing offers, will be the way for institutional investors to rebuild reserves and at some point in the future be able to invest according to their strategic asset allocation.
Appetite for Fresh Food Boosts Co-op’s Christmas
The Co-op’s focus on fresh food sold from local stores hit the spot over Christmas. The retail group said like-for-like sales, which strip out the effect of new store space, were up by 5.3% in the 12 weeks to 2 January as it cemented its position as the UK’s fifth-biggest food outlet. It now has 3000 stores after buying the Somerfield chain last year.
Chief executive Peter Marks described trading conditions as competitive but said the presence of Co-op stores within local communities gave the chain an edge at a time of rising fuel prices and extreme weather conditions.
The Co-op expects tough economic times until at least the end of 2010.
Create Brand Awareness and Build Sense of Belonging
Personalization is becoming more and more popular in the modern society. These days, you could find an increasing range of personalized products on the border, ranging from personalized pens, T-shirt and electronic devices to computing equipment.
For individuals, personalized products, such as key chains and wallets, are very special gifts to send to friends and family. For various businesses, personalized products with the logo of a business could be very beneficial. There are many types of logos one can put into the printing products, be it in business cards, postcards, flyers, catalogs, folders, envelopes and even flash drives. They are very effective in building up a brand identity, which will distinguish a business from all the competitors in the field. They will not only make good gifts to the existing customers, but also contribute to helping different businesses build strong sense of belonging among their own employees when given as tokens of appreciation.
Another way to achieve a sense of belonging is to create a special information package for the customers when they engage the services. Depending on what services a business offer, the special information package could be a guide, list of tips, or anything that will help people make the most of the services.
9000 Bankers to Quit City
Boris Johnson today put himself on collision course with No 10 and his own party when he warned that up to 9000 bankers could leave London to escape paying a one-off super-tax on their bonuses.
There is growing anger in the City at the measure, with higher earners also to be hit by the 50p income tax rate and higher national insurance rates. Bankers with a non-domiciled tax status face an additional levy.
The Mayor launched a fresh bid to put the issue, which he says is crucial to the national economy, at the heart of the election campaign. But the Tories have no plans to dump the super-tax. Shadow chancellor George Osborne says he does not oppose the proposal.
A senior City Hall source said: “Boris’s job is to defend the interests of London, whoever is in government”. Mr. Johnson’s office has been approached by a number of major global banks.
JP Morgan and Goldman Sachs are understood to be among those considering moving staff and operations after Chancellor Alistair Darling announced the 50% windfall tax on all bonuses over £25000 this year in the pre-Budget report.
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