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Expat Investor : January February 2008
NEWS expatinvestor.com 2 EXPAT INVESTOR January/February 2008 Fast Facts 22112 Fast Facts 22110 Fast Facts 22113 Fast Facts 22120 SCIL easy access account offers rate cut protection Consumer confidence falls 12 points THE NATIONWIDE Consumer Confidence Index fell by 12 points to 86 last November -- the most it has ever fallen in a month. A fall in consumer confidence was not unexpected, given the spate of gloomy news of the last few months which now appears to be taking its toll. Continuing uncertainty about the credit crunch, petrol breaching £1 per litre and higher staple food prices in the UK now all seem to be affecting consumers' sentiment. All four confidence indices dropped in November. The smallest fall was in the Present Situation Index, which reflects feelings about the current economic and employment situation -- this fell by 8 points. In contrast, the Spending Index (consumers' willingness to spend) and Expectations Index (how consumers feel about the economic and employment situation and income in six months' time) both dropped by 14 points to 63 and 83 respectively. Fionnuala Earley, Nationwide's chief economist, says, "We've been expecting consumers to react to the events of recent months for some time, so the fall in the index this month was not a surprise. Uncertainty about the effects of the SCARBOROUGH Channel Islands (SCIL) says its new Offshore Reserve account offers "the best of both worlds -- interest rates of up to 6.40% gross AER and the flexibility of up to four penalty- free withdrawals per year." SCIL adds that even with many commentators predicting cuts in the Bank of England base rate over the next few months, it has committed to maintain the rates on Offshore Reserve until at least 1 May 2008. Other product features include: interest of 6.40% (6.20% monthly) on balances of £100,000-plus; 6.35% (6.15% monthly) on balances of between £50,000 and £99,999; and 6.30% on balances of £5,000 to £49,999. credit crunch, together with rising oil and food prices, seems to be affecting feelings about jobs and the future economic situation... Going forward into 2008, the expectation of at least two cuts in the base rate should begin to take pressure off finances and restore some confidence." Sentiment about the labour market is weaker than in earlier months, with almost a quarter of people believing that there are currently few jobs available. Having said that, more than half still think that there are some or many jobs available. Consumers are less happy about the future. The 14 point fall in the Expectations Index was the second largest monthly fall since the series began, and brings it down to its lowest level since January 2007, when overall consumer confidence hit its lowest point. Consumers are less optimistic about the economy and the job situation but, remarkably, this has still had little impact on their view of household finances -- 89% think their household income will be the same or higher in six months time. minimum deposit of £5,000. maximum balance of £1m per account (£5m per customer). up to four withdrawals permitted per financial year, without penalty or loss of interest (further withdrawals subject to a £50 administration charge). accounts can be closed at any time without notice or loss of interest (if more than the permitted number of withdrawals have taken place prior to closure, an administration charge of £50 will be payable). SCIL also announces its notice account, Offshore Flexi-120 Direct, is being re-launched as a 60 day notice account. All other terms and conditions, including the existing rate of 6.55%, will remain unchanged and the product has been re-named Offshore Flexi-60 Direct. SCIL Managing Director Tony Burdin says, "In the current, fast- changing savings arena, savers are being tempted by mouth-watering returns. However, many accounts offer savers little protection from future rate changes. "Offshore Reserve gives this assurance over the next six months, irrespective of what happens to the Bank of England base rate. Offshore Flexi-60 Direct, which also offers a rate guarantee, is once again a leading account in the notice category." Kaupthing Singer & Friedlander International acquires Derbyshire Offshore Kaupthing Singer & Friedlander International has announced its entering into an agreement to purchase the entire share capital of the Derbyshire Building Society's offshore subsidiary, Derbyshire Offshore. Derbyshire Offshore is known to many Expat Investor readers as a specialised operation offering a targeted range of fixed and variable rate sterling deposit accounts. At the end of the third quarter 2007, it had total deposits of over £320 million. When the legal formalities are completed, all the existing Derbyshire Isle of Man accounts will transfer to Kaupthing Singer & Friedlander (Isle of Man). The Bank says that Derbyshire Offshore will be integrated into its existing Isle of Man operation and the acquisition will not result in any job losses. Aidan Doherty, Managing Director of Kaupthing Singer & Friedlander International, tells Expat Investor,"We believe that this is very exciting news, Derbyshire Offshore has a strong expat client base that is a good fit with our existing business. We are able to offer enhanced banking facilities to our new account holders, who have only had sterling banking facilities at their disposal up to now. As a subsidiary of a major European banking group our customers can operate multi- currency accounts, online banking, and an international debit card. We also offer offshore lending from Kaupthing Singer & Friedlander. Additionally, investment management services are available from Singer & Friedlander Investment Management here on the Isle of Man. "Our parent company, Kaupthing Bank, has a very strong credit rating from Moody's (Aa3) and from Fitch (A). It will provide a full parental guarantee in respect of our customer deposits. This guarantee will replace the parental guarantee from Derbyshire Building Society from the date of completion of the transaction, meaning that customers can continue to have peace of mind regarding the full security of their deposits." A brochure introducing Kaupthing Group and a brief 'question & answer' section can by viewed on the Bank's website www.kaupthingsingers.co.uk/ international Two new bonds from Britannia International BRITANNIA International has launched new issues of its Optimum Growth Bond and Guaranteed Capital Bond. The Optimum Growth Bond Issue 22 provides a return of 150% of FTSE 100 growth over the full six-year term, subject to averaging over the final twelve months, and retains its two early maturity features to take advantage of strong short-term growth. These will see the Bond mature early with a return of 20% gross/9.54% A.E.R. if the FTSE has grown by 20% or more over two years, or 40% gross/8.78% A.E.R. if the FTSE has grown by 40% or more over four years. This Isle of Man-based offshore deposit-taker has also launched Issue 6 of its Guaranteed Capital Bond, which continues to offer a choice of investment term. The three-year option will pay a fixed return of 26% gross/8.01% AER and the five-year option will pay a fixed return of 47% gross/8.01% AER if the FTSE 100 has grown by 10% or more over the investment term, subject to averaging over the final six months. There are no charges on either bond and early investors can benefit from an investment bonus of up to 0.40% depending on the date of deposit. The minimum investment is £10,000 for new customers and £5,000 for existing Britannia International customers. The closing date for applications is 31 January 2008, although, as both bonds are limited issues, they may be withdrawn from sale early if fully subscribed. Abbey International offers expat savers 6.30% on balances of £1 million ABBEY International has launched a special offer savings rate of 6.30% gross for those expat savers with more than £1 million in its Instant Access Savings Account. This offer runs for a limited six month period, giving customers a boost to their savings plans with this effective bonus of nearly 1% over the Bank's normal savings rates. The new top tier, confirms Abbey International, is guaranteed to be 0.80% above UK base rates until 30 June 2008. The offer comes with an available monthly interest option of 6.10% (6.27% AER). Announcing the bonus offer, Jane Matthews, Head of Marketing & Business Development, tells Expat Investor,"This initiative represents an excellent opportunity to substantially boost returns at a time when the UK base rate has started to fall. We are offering savers a dramatically higher rate on balances of £1 million plus and, as interest is calculated on a daily basis, this will give maximum flexibility." Abbey International estimates that on a balance of £1 million, the new rate could boost returns by as much as £4,500 over the six months the offer will run which is until 30 June 2008.