Your money in European bonds
Article Abstract:
Investment in European bonds have become riskier and more complex since the turmoil in the Exchange Rate Mechanism (ERM) erupted in mid-1992. The upheavals in the European currency markets have led to devaluations in the Spanish peseta and the Italian lira, as well as to the withdrawal of the British pound from the ERM. The root cause of the turbulence in European currency markets is the growing disparity between US and German interest rates. This has led to sharp currency shifts that have disrupted the operation of the ERM, while increasing currency risks for investors holding funds in European bonds. Nevertheless, investment opportunities in the European market remain fairly attractive since small investors can still reduce currency risks by investing in high-performing international fixed interest unit trusts and offshore bond funds, such as the MGM International Bond, Baring Global Fund and GAM Bond Interest.
Publication Name: Accountancy
Subject: Business
ISSN: 0001-4664
Year: 1992
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Capital's class system
Article Abstract:
The number of split-capital investment trusts in the London Stock Exchange (LSE) is growing as investment trusts become increasingly popular with individual investors. As of March 1992, the LSE lists almost 50 split-level trusts, many of which are of complicated structures. Among such unconventional structures are warrants, zero-dividend preference shares, stepped preference shares and ordinary income. As their name implies, split-capital trusts involve varied classes of capital that offer distinct solutions to whatever investment needs of particular investors. Split-capital trusts ensure that net assets are not exceeded by the different classes of capital and eliminate any problems over discount by having a fixed life. The rights of the different classes of capital in the LSE as of March 5, 1992, are detailed, providing market figures such as prices, yields, and discounts.
Publication Name: Accountancy
Subject: Business
ISSN: 0001-4664
Year: 1992
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Over there and overpriced?
Article Abstract:
The ability of British citizens to acquire second homes in Europe has been sharply curtailed by the poor economic climate in the UK and in the countries which are the most popular destinations for UK buyers. As a result, the 1980s boom in the sale of residential properties in Europe has come to a halt, with little prospect of an upturn until the lengthy UK recession ends and the economic climate in Europe improves. The withdrawal of the British pound from the Exchange Rate Mechanism and the subsequent devaluation of the UK currency has further clouded the future of the market since properties in Europe have become more costly in sterling terms. The UK market for second homes in Europe centers on four countries, namely, France, Italy, Spain and Portugal. Of these, France is the most popular destination for British buyers, accounting for over half of the market.
Publication Name: Accountancy
Subject: Business
ISSN: 0001-4664
Year: 1992
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