Protests in Hong Kong Impact on Investors

Investors have been impacted by the protests currently taking place in Hong Kong. The protests have left their mark on those whose investment portfolios include exposure to Hong Kong in a range of ways.

Pro-democracy protestors have been occupying spaces outside government buildings in reaction to recent government decisions. The protestors are unhappy about reforms which allow future leaders to be democratically elected, but only by a comparatively small group of people who have been approved to vote by Beijing. Early on Monday morning, riot police fired tear gas at thousands of protestors, and there are concerns that the situation could further intensify before things come to an end. These protests are being called the most severe political unrest that Hong Kong has seen in the seventeen years since the former British territory was handed back to China in 1997.

The protests are having a significant economic impact, which is in turn having an effect on investors’ portfolios. A number of large banks have announced that their operations in Hong Kong are to be suspended. Many branches, cash withdrawal machines, and cash deposit machines are being closed amidst the unrest, and many staff are being instructed to go to secondary sites or to simply stay at home.

A number of businesses are also being affected by the unrest. It is believed that the most vulnerable business types will include retailers and those whose activities relate to tourism or benefit from tourist trade. This is particularly true with the approach of China’s National Day Holidays this week, usually a peak tourist season.

These economic factors are naturally impacting upon investments in the region. Those who hold investments in Hong Kong’s stock market, for example, have seen their portfolios affected by the unrest as the market suffers. By the end of Monday’s session, the Hang Seng index found itself 449 points lighter than it had been when it began. This represents a rapid 1.9% drop, with the market eventually closing at 23,229.21.

Forex traders with investments in Hong Kong have also been affected by the protests. In light of unrest, the value of the Hong Kong dollar against the US dollar plummeted. It ended up at a six month low of just 0.13 US dollars (GB£0.079).

According to IG Markets’ Ryan Huang: “The recent stream of China macro data has not been particularly strong to bolster investor confidence, and worsening sentiment will not do the markets any favours.”

PPI Claim Facts You should be Aware of

Mis-selling of PPI policies started as early as 1990s. The PPI companies were fined from 2006, but a major spin in the situation was seen only in 2011.  PPI complaints can be made at any time, though there are certain guidelines that will help in getting the claims in an easy manner as possible.

  • If your insurance has been active for the past six years, it would be easier to claim.
  • For a policy that is of an older duration, but in an active stage, or has expired within the past six years, you can still get a PPI refund. For instance, a 12 year old policy that has been paid off within the past six years is eligible for a refund.
  • In case of your policy ending six years back, PPI guide states that even if the banks do not have the concerned paperwork, if you have got the relevant documents, you can still make a complaint. However, the success rate is low in such cases.

Amount You Can Claim

Calculating the exact amount is difficult.  A PPI calculator can assist in estimating the precise amount you will get. The calculation is done by taking into account the time at which the policy was taken, the premium type, and whether you can claim the entire amount or only part of the original amount. Working out the value of the monthly loan payment can be done by entering in the amount of the loan and doing a comparison of the amount you had paid.

If you have ascertained your eligibility for a claim, you can approach the policy provider directly or march through PPI claim agencies. Ensure you go to a reputable one that is regulated by the Ministry of Justice such as The PPI Claims Advice Line – their website is  There are PPI template letters available online which aid in entering the relevant details so that your PPI claims are properly addressed in order for you to enjoy a favourable result.

Restricting Speculative Investments: The Volcker Rule

The Volcker Rule forms a key part of the Dodd-Frank Wall Street Reform and Consumer Act – specifically section 619 – aiming to restrict banks in the United States from making speculative investments that will not, and do not, benefit their customers.

Though the Dodd-Frank act is already law, the Rule itself is set to come into play in July of 2014 (the Act allows for a two year conformance period), having been the centre of regulatory debates since it was first proposed, and will affect every US federally insured depository institution. It will also affect any company that controls an insured depository institution (IDI). Any private investment funds dealing with the affected banks will also be subject to the rulings.

What does the Volcker Rule do?

The Volcker Rule aims to prohibit banks from engaging in what it terms “proprietary trading” – which is, in the words of the Rule itself, defined as: “engaging as principal for the trading account of the covered banking entity in any purchase or sale of one or more covered financial positions.  Proprietary trading does not include acting solely as agent, broker, or custodian for an affiliated third party.”

The Rule does not stop the banks from trading completely, but it tightens the controls on such activity and requires stronger documentation. It will be overseen and implemented by five separate government entities: the Federal Reserve, the U.S. Securities and Exchange Commission (SEC), U.S. Commodity Futures Trading Commission (CFTC), Federal Deposit Insurance Corporation (FDIC) and Office of the Comptroller of the Currency (OCC).

Who will the Volcker Rule affect?

Although the rule primarily bounds only banking institutions in the US, all global banks will likely be subject to Volcker, as any party to a trade that is in the US will be included in the agreement. This means any affiliates of US banks, including overseas bank branches, as well as any foreign banks with operations in the States, will be affected.

Non-banking financial institutions like insurance companies and hedge funds are not affected, and only the larger investment banks – such as Morgan Stanley, who agreed during the financial crisis to become banking institutions – will come under the remit of the Rule.

Ensuring conformity

Any organisations that are affected by the Rule will need to establish a compliance program to address their conformity, and meeting these standards will not be easy for many more complex institutions. Distinguishing market-making from proprietary trading, which is restricted by the Volcker Rule, requires regulators to apply five factors: risk management, source of revenues, revenue relative to risk, customer facing activity and payment of fees and commissions.

Institutions have two years from the date of Dodd-Frank’s enactment, giving a final deadline for compliance of July 21st 2014. During this time, they must perform four key duties:

- Prepare for full compliance in 2014

- Put together a detailed conformance plan

- Show a “good faith” effort to achieve compliance during this period

- Prepare for possible record-keeping and reporting requirements that federal agencies may impose before the 2014 implementation

Tools such as the London Stock Exchange’s UnaVista can help with conformance by providing data consolidation, regulatory reporting, reconciliation and advice for any one affected by these and similar legislations.

How Long Before You’re Reimbursed PPI

The mis-selling of PPI has become a huge issue in the UK. While there are some people who bought their payment protection insurance or PPI from their bank when they took out a loan, credit card or mortgage, many started paying for their PPI without them even realizing its costs had been added on. This is because many loan providers instantly added a PPI policy to the accounts of their clients – the huge commissions they got for each PPI policy sold explain why.

This is the reason why many individuals today are advised to check their loan or credit card accounts to see if they were paying for PPI all this time. Of course since you paid a lot of money for it, it’s only natural that you want to make use of it in case you too experience financial issues when paying for your debt. Unfortunately, banks will now reject PPIs and the only way you can still get money out from your PPI account is by filing a PPI claim.

How Long Do I Have Wait to Get Compensated?

Let’s say that you are one of the many people who filed for their PPI claims and you’re wondering when you will be reimbursed. Sadly, the compensation you’ll get from your PPI claim will take a while to be processed. While the help you’ll get from the Financial Ombudsman Service is free, your documents will take a couple of months to be processed. Keep in mind that there is a large backlog at the Financial Ombudsman Service. The FOS receives around 750 cases every week and PPI claims and complaints make up for more than ¼ of all these new cases. You can expect your PPI claim to be settled by the FOS after 8-9 months.

However if you’re experiencing financial or health troubles and you need the money fast, or you just don’t want to do all the paperwork yourself, you can also get in contact with a PPI claims specialist, like PPI Claims Advice Line.  With this company, some people have had refunds within 2 months of filing for a PPI refund. Note however, that claims companies will do all the work and get you a payment more quickly, in return for a fee from your compensation payout should it be successful.

UK University Bans Payday Loans

In a recent move to protect their students, the University of East London have decided to ban payday loans from their campus completely.

This means that any magazines or posters advertising payday loan companies are now forbidden, as well as access to payday loan websites being completely restricted.

Officials at the university came to the decision after seeing that a number of their students were at a high risk of falling prey to payday loan lenders. Specifically, single parent students are considered to be at the greatest risk, especially when they are struggling to pay the bills and put food on the table.

Many of these single parents have been driven to desperate measures in the past, and it’s all too easy for them to get stuck in a vicious cycle of taking out a payday loan to pay off another.

In some cases, the cycle of debt has become so much, that a minority of students have turned to prostitution and other illegal activities to raise the money necessary to pay what they owe.

The Chaplain of the University, Rev Jude Drummond, recently said, “payday loans lead to desperate measures. We have got a lot of crime and social problems in this area, and a lot of people on the street because of money worries. I’ve seen evidence of people turning to sex work because they can’t make ends meet.”

This move to ban payday loans from the University of East London is sure to be watched closely by other universities around the country. Last year alone, it is estimated that thousands of students got into financial trouble due to payday loans, which means the problem is not unique to London.

In fact, it would not be surprising to see other universities follow suit in the coming months, and ban payday loan companies for good to protect their vulnerable students.

Many payday loan lenders have come under fire in recent years, as experts and government officials warn that they are “almost unlawful” and designed to target the vulnerable.

What is most worrying is the long-term repercussions of getting into trouble with payday loans, especially for students. The financial implications of getting into a lot of debt could haunt them for years to come, and make securing credit in the future almost impossible.

Ultimately, it’s probably safe to say that payday loans were not designed to be a good match for students, and they would be better advised to seek out a student loan to help with their finances.

Cap on Cost of UK Social Care to be put at £75,000

A sad reality for many people in the UK is the having to sell the homes they own in order to pay for social care when they become too old to care for themselves.  The British Health Secretary Jeremy Hunt called it a ‘scandal’ that every year ’30,000 to 40,000 people are having to sell their houses to pay for their care costs,’ and states one in ten have care bills amounting to more than £100,000.

To answer this situation, the government proposed setting an upper limit on the cost of care at £75,000.  The idea is that it would help homeowners to hold onto their homes and family’s inheritance – Nick Clegg, Deputy Prime Minister, wrote in the Sunday Telegraph that “We will make sure no one is forced to sell their home to pay for care in their lifetime, and no one sees their life savings disappear just because they developed the wrong kind of illness.”

The cap is dependent upon people having to take out health insurance of their own to enable them to pay the possible full £75,000 cost of elderly care when the times comes for it to be needed.

Nevertheless, the proposal of the cap does come at a cost to the government – in the region of a billion pounds.  This is to be recovered from a freeze on Inheritance Tax at its 2009 frozen rate of £325,000.  The freeze would stay in place until 2019 and would mean the tax wouldn’t rise in line with inflation.

The proposals have had a mixed response, with some praise and some criticism stating they don’t go far enough in helping meet the needs of the country’s aging population.

Restructure your business debt and buoy your corporate finances

Business organizations can drown in a sea of high interest debt just as easily as individuals. While debt can mar the growth of a business organization, business debt restructuring can help a business regain control over its finances. Excessive business debt can be incurred due to various reasons like unexpectedly large monthly expenses, sudden expansion of infrastructure and even due to poor financial management. Unfortunately there are many business managers who refrain from seeking help of the professionals, possibly due to the feelings of failure and embarrassment of not being able to keep up with the competition. Unattended business debt can invariably lead to an intense pressure from the debt collectors and might also lead to lawsuits. If you don’t want to go through such circumstances, you should opt for business debt restructuring. Check out the 2 most common ways of restructuring your corporate financial debt.

Opt for a debt consolidation loan: A commercial debt consolidation loan is a single loan that may be used to pay off all the other business debts. Rather than splitting your monthly revenue among multiple creditors, the businesses only require making a single monthly payment towards the debt consolidation loan. In addition to single and convenient monthly payments, the interest rates on the loan will also be lower than what you were paying on the previous loans. However, unfortunately, acquiring a debt consolidation loan for a business is significantly difficult than getting a personal debt consolidation loan. As the amount involved is huge and there’s no guarantee of the future profits of the corporate organization, the business owners often require accompanying their approach with a detailed budget that will show the profits and the growth that the company anticipates in the next few years. If they agree, you can take out the loan and use the proceeds in repaying your creditors and then start repaying the consolidation loan with ease.

Opt for commercial debt counseling: The commercial debt counselor accomplishes for business organizations what the consumer debt counselor does for the individuals who are in debt. The commercial debt counselors will combine financial support with debt settlement so that the counselors can assist you in both educating the business managers but also detecting the economic issues that is barring the business from taking firm financial decisions. The goal of the counselor will be to boost the revenue by locating the problem and by reallocating the funds to various departments of the business efficiently. The counselor will suggest managers about handling their finances in a way that can help them improve their situation. Although this part will be completed within a few weeks, the counselor will then negotiate with your individual creditors so that he can alter the repayment schedule and facilitate the payments for you.

Business organizations solely exist for the purpose of creating revenue for the nation. Therefore, if the revenue is not enough to satiate the costs, the lenders won’t give you enough funds for combining your commercial loans. Just ensure that you manage your finances and repay your business debt restructuring loan on time so as to help yourself become debt free as soon as possible.

US Stock Market Braces for Storm, Prepares for Temporary Shutdown

Hurricane Sandy is slated to arrive to the United States by this week according to local weather stations, and the stock market is packing up their things to prepare for the potentially largest storm to hit New York. Weather stations predict vast flooding, immense power outages and strong winds that could imperil the entire New York environment.

Many New York citizens are evacuating to other cities by this week bracing for the storm. The stock market is slated to be frozen for a few days as the storm passes towards the metropolis. Local authorities state that the developing violent storm may disable them from guaranteeing the safety of the citizens of New York.

The US Stock Market will be closed on Monday and Tuesday as the storm is set to ravage the city by the two days. Offers to close the trading floor and instead go for electronic trading have been canceled as the storm’s strength was predicted earlier this weekend. The New York Stock Exchange Operator Euronext stated that it wanted to prioritize the safety of the people and all information and safety is always their first priority.

Philips 66, an oil refinery in New Jersey, which produces at least 238,000 barrels per day will also be shutting down and cutting output due to predicted power outages and the storm’s actual hindrance to their operations. The temporal closing of the refinery has caused a rise of 1% in the futures trading of oil.

Source: Reuters