BBC Radio Scotland – Amanda Forsyth on “Good Morning Scotland”

Amanda Forsyth – Investment Manager & Business Development

Amanda Forsyth and BBC Radio Scotland’s Andrew Black compare and contrast Honda’s planning cycle and that of the UK government; debate HSBC’s role as bellweather for US/China relations; look to the long term stay at Intercontinental Hotels; and dig up the details of BHP Group’s results. At 51 minutes into the programme.

BBC Radio Scotland – Amanda Forsyth on “Good Morning Scotland”

Amanda Forsyth – Investment Manager & Business Development

52 minutes into the programme, Amanda Forsyth and BBC Radio Scotland’s Andrew Black dissect the implications – or lack of them – for businesses from last night’s series of Brexit amendment votes; discuss the difficulties faced by Wizz, Norwegian and FlyBe with all those moving parts of an airline business; assess the impact for Apple of cutting the cost of iPhones; and recall the happier times when GDPR was the major news item – albeit one still impacting Royal Mail today.

The MAM Blog – Smartphone sales as economic indicator

Stuart Ralph – Investment Manager

The stockmarket recently wiped $50bn off Apple’s stockmarket valuation following its news of slowing iPhone sales in China. The US tech giant now anticipates revenues of around $84bn for the latest financial quarter, a decrease of approximately 8% from earlier guidance. Since China accounts for 20% of all company revenues, and as weakness was specifically seen within iPhone sales, the decline indicates quite a sharp fall in demand. In the aftermath, commentators have also suggested that given the iPhone’s symbolism of affluence within China, declining sales is a worrying sign for Chinese consumer confidence and the wider global economic outlook.

While I agree that weaker sales in China is of concern to Apple (and its suppliers), I am reluctant to see this as a more widespread and worrying sign. It’s obvious that US – Sino relations are increasingly challenging, and incrementally damaged by the arrest of Huawei’s CFO in Canada on the request of US authorities in relation to Iranian Trade embargo matters. The fact that President Trump suggests a more widespread deal between the two countries could remedy the situation clearly masks the wider political intent.

However, the real problem is that companies such as Apple, Samsung and Huawei are victims of their own success. They have over recent years produced increasingly complex, technologically sophisticated and ultimately increasingly “must-have” devices that the populations of the world have embraced. However at the same time, their high-end devices have become ever more expensive.

As I look at my 4 year old iPhone 6 Plus and the images it can take, I can’t see a clear imperative to buy a new phone with an ever better camera or faster processor. It can do all the surfing, emailing, texting, video conferencing, ticket purchasing, music listening and media consuming activities that I could possibly need. I can even login into my work desktop should I wish and it’s a great sat-nav system at the weekends. While it doesn’t have some of the operating bells and whistles that newer devices have, the underlying functionality remains virtually identical.

My belief is that for the vast majority of people, once devices reached a certain point in technological evolutionary terms, the applications that can be run on them is key – new operating system updates / compatibility issues / and dare I say it, intentional obsolescence are the critical factors.

So the question is – if Consumers are happy with their amazing devices and not cajoled into upgrading, then the additional disposable income required to purchase a new device can be used to purchase a range of different products. In economic parlance, the marginal utility per unit of cost associated with a new device is less than the marginal utility per unit cost gained consuming a range or basket of alternative goods.

There will of course be new consumers that underpin future sales, but a combination of enhanced functionality and cost increases have resulted in the replacement cycle being pushed out. The higher the technological bar and cost, the further this cycle will be pushed out.

Growth in China is almost certainly slowing and a deeper economic downturn may yet be seen, but the truth is that no single data point should be regarded as a proxy for the overall performance of the Chinese economy.

BBC Radio Scotland – Amanda Forsyth on “Good Morning Scotland”

Amanda Forsyth – Investment Manager & Business Development

Amanda Forsyth and BBC Radio Scotland’s Andrew Black begin by looking East – to review Samsung’s disappointing trading update, and seek hints of optimism for US/China trade talks. Closer to home, they then look forward to the supermarket results season, beginning with Morrison’s; and finally, assess the challenges facing Jaguar Land Rover as revealed in their global sales figures.

The MAM Blog – National Savings & Investments

Charles Roberston – Senior Investment Manager

From 1 May 2019, existing holders of Index-linked Savings Certificates will only be able to re-invest the maturity proceeds in Index-Linked Certificates where the return is based on the Consumer Price Index (CPI) measure of inflation, instead of the currently used Retail Price Index (RPI). The change is due to the reduced use of RPI by successive governments to measure inflation and is in line with NS&I’s requirement to balance the interests of its savers and the cost to the taxpayer.

CPI has historically yielded a lower rate of inflation than RPI (currently 0.9% lower). This can largely be attributed to the way the two indexes are calculated and the fact that RPI incorporates the housing market (which has historically been a volatile asset class); taking into account rises in mortgage payments, rents and council tax while CPI does not. Therefore, existing holders of Index-Linked certificates (they are currently not available for new purchases) which mature prior to the 1st May 2019 deadline should consider re-investing the proceeds for the maximum period of 5 years if they are able do so. The new measure of inflation will only be applied when a re-investment is made because existing holdings will continue to be based on RPI.

BBC Radio Scotland – Amanda Forsyth on “Good Morning Scotland”

Amanda Forsyth – Investment Manager & Business Development

It’s all about the UK’s propensity to consume as Amanda Forsyth and BBC Radio Scotland’s Andrew Black discuss the very strong trading at Greggs, contrasting with a very poor performance from Thomas Cook; and the battle raging between shareholders in Restaurant Group over their acquisition of Wagamama. Finally, they take a swift look at the prospects for the Bank of England’s reporting later today.

BBC Radio Scotland – Amanda Forsyth on “Good Morning Scotland”

Amanda Forsyth – Investment Manager & Business Development

Amanda Forsyth and BBC Radio Scotland’s Jamie McIvor discuss the implications for world economies and markets of the forthcoming US mid-term elections; the degree to which UK businesses are able to prepare for an uncertain Brexit; and the outlook for Weir Group’s trading update in the light of mineral and oil price movements.

The MAM Blog – Budget 2018

Richard Johnston – Financial Planning Director

On Monday 29th October, Philip Hammond delivered his third Budget as Chancellor and, similar to the previous two, there were few standout policy changes.

It has been commented that it was an agreeable Budget and one typical of a party running for re-election, but Mr Hammond did highlight that a more severe ‘emergency’ Budget may be required in the event of a ‘no deal’ Brexit.

Focusing on one giveaway, the personal income tax allowance will be increased from £11,850 to £12,500 for 2019/20, with the higher rate income tax threshold for residents in England/Wales/NI increased from £46,350 to £50,000. This lofty, round number was originally promised for 2020/21, but will now be enjoyed a year earlier – assuming, of course, that a Brexit deal can be agreed.

For residents in Scotland, this should prove to be interesting with the SNP’s Derek Mackay due to deliver his own Budget on 12 December.

The Scottish Government cannot control the personal allowance (as it is reserved for Westminster), although it might not be inclined to use a lower figure, in any event.

It can, however, determine the higher rate threshold in Scotland, with it already lower than that of the rest of the UK, at £43,430. It would be surprising if Mr Mackay introduces a similarly large increase and, therefore, the gap between the two parts of the UK is expected to widen from April 2019.

I previously wrote about how the gap causes some undesirable results, as certain taxes remain reserved for Westminster. If the gap widens further, it may lead mobile, high earners to move south – something which the Scottish Government should be keen to monitor before it is too late.

The MAM Blog – Additional Permitted Subscription for an ISA

Charles Robertson – Senior Investment Manager

For most investors a Stocks and Shares ISAs is an excellent long-term savings vehicle given the associated exemptions from Income Tax and Capital Gains Tax.

Until recently, the ISA tax benefits were lost on the death of the account holder, but this changed in the 2014 Autumn Budget when the Chancellor announced a new measure called an Additional Permitted Subscription (APS). An APS allows the spouse or civil partner of the deceased ISA account holder to effectively ‘inherit’ the ISA.

The rules relating to an APS contribution are complicated and time limits are applied, but the benefits may be considerable given the potential capital sum involved. Therefore, it is worth seeking advice whenever an ISA is held in a deceased’s Estate. The number of people taking advantage of these new rules has fallen well below initial forecasts and we consider that this is very surprising given the potential tax benefits associated in making an APS.