Comeback to basics

Article Abstract:

Devaluation and falling interest rates have stimulated renewed interest in flotations, rights issues, cross-border mergers and takeover bids in the UK's financial community in 1993. Rights issues reached record levels in the early part of the year while smaller companies dominated the league table of the strongest performing shares in the London Stock Market.The current popularity of small-business shares puts small companies in a good position to float, but this would require good prospects for growth since flotation can be quite costly for firms whose market capitalization will remainsmall. The year 1993 is also seeing the fall from favor of innovative financialinstruments, including convertible preference shares, auction market preferred stock and convertible unsecured loan stock. The unpopularity of these instruments can be attributed partly to the introduction of the Accounting Standards Board's exposure draft on capital instruments.

Evaluation, Securities, Financial instruments

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Industry calls for action over ACT

Article Abstract:

UK's Advance Corporation Tax (ACT) is meeting stiff opposition from financial directors, accounting bodies and large corporations. Critics of the ACT claim that it is an unfair tax rule which is making large UK companies pay more in ACT on their dividend paid to shareholders than what they are required to pay in UK profits' ordinary Corporation Tax. The tax rule already caused quite a number of UK companies, including BAT, Lonrho, and Trafalgar House, to lose million of dollars in unrecoverable ACT. Until a new tax system is formed after the creation of the Single European Market, British companies can prevent further losses associated with the ACT by adopting any one of these options: cutting UK costs while increasing profits by relocating to the European Continent, improving profits through acquisitions, or decreasing dividend payments to shareholders.

Taxation, Corporations, Corporations, British

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Upturn blues

Article Abstract:

The optimistic talk about the end of the recession in Great Britain and the upbeat forecasts of an upturn in 1992 frequently overshadow a number of key issues that underpin the current British downturn. Such concerns as the plight of the growing number of small companies that have gone into receivership, the cash-flow squeeze triggered by the tightness of credit markets, and the lack of long-term strategies for sustaining a healthy trade balance, remain quite troublesome. These issues, if left unresolved, could well undercut the sustainability of any economic recovery that may occur in the short-term.

Economic aspects, Small business, International trade, Recessions

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