Friday, 31 January 2014

The Weekly Wrap Up: Trierweiler's Media Courtship

This week French President Francoise Hollande publicly announced his separation from his long-term partner, Valerie Trierweiler, following allegations of an affair with French actress Julie Gayet.

Although no longer First-Lady of France, it has been a busy week for Trierweiler; alongside a series of interviews with France’s leading magazines, including Le Parisien and Paris Match, she has also discussed the possibility of her writing a book on her experience.

Image courtesy of Koudy-VW
For those who remember the media coverage surrounding the split of Princess Diana and Prince Charles, this story stings ever so slightly of a historical repetition. As Trierweiler did this week, Diana rather famously opened up to the British media and Andrew Morton about her relationship with the Prince, and her experience as being “Princess Diana”. This media exposure was met with a degree of scepticism by the British community, ever a conservative bunch, who perhaps felt that privacy would have been a more respectable path of progression than the path of publicity that she chose to take.

Valerie has, similarly, courted the press; speaking of her feelings at discovering Hollande’s alleged betrayal as like “falling from a Sky-Scraper”. She has even gone so far as to say that although she has had break-ups before, this has been that much harder because of the media attention: irony, thy name is Valerie.

A more recent example of a First-Lady (of sorts) whose services were no longer required is that of Vicky Price, the ex-Wife of the Former Liberal Democrat MP for Eastleigh (Hampshire) Chris Huhne. Following an extremely well publicised Court Case in 2012, when she was found guilty of perverting the Course of Justice, Pryce wrote a book about her experience of being in Prison, a la Jeffrey Archer: “Prisonomics: Behind bars in Britain’s failing prisons”. Although more focused on the economics than on her lost romance, the tone of Vicky’s book would not be too many worlds apart from any words that Valerie Trierweiler might publish.

So how does the world view Valerie Trierweiler’s dealings with the press of recent weeks, and how would they view the possibility of a book?

Yes, there is a strong argument for those that would condemn Valerie for courting the press, using her personal life and that of two others as bait for media attention. When considering Hollande’s role in the French political system, one could suggest that he perhaps has more important issues to focus on than how his romantic life is being portrayed in the global press.

On the other hand, why should Trierweiler not court the press and write a book? As we all know, and as Shakespeare wrote: “we want bad”, and if a book of Valerie’s has the potential to sell then why should she not reap some gain from what has otherwise been a very torrid experience for her?

Nearly 17 years on from the tragic death of Princess Diana it appears that those (women) that feel that they have been unfairly treated still view the media as one of their only options for achieving justice. Perhaps Valerie Trieweiler’s public activities of late haven’t been the most discreet or befitting of a (former) First-Lady, however the press has always been and will continue to be (until society’s inequalities have been fully eradicated) a voice for those that seek it.

Abchaps welcomed some of Greenberg Traurig Maher’s finest up-and-coming lawyers into our office this week to catch up over some bubble and canap├ęs. The Company is growing at a phenomenal rate in a variety of sectors and one of their top associates, David Naser, explained how they were making the most of their US roots and heritage to bring a whole host of new clients through the door. We also did our very best penguin impressions as we donned our finest black ties ensembles for the Quoted Company awards. Several of our clients and indeed Abchurch were up for awards and we were narrowly pipped at the post by some very worthy competitors.

During this week's market lunch program, conversations covered a number of sector trends and, safe in the knowledge that Chatham House Rules apply, we got the low down on market predictions for 2014.

Abchaps also attended a heated discussion on the arguments for and against Fracking in the context of its affect on the future of Renewable Energy sources. A number of key players from the City attended the event, and we look forward to pushing this discussion further with our Green City network. This was another excellent event put on by Eco Connect’s Robert & Catherine Hokin, and well hosted by Smith & Williamson.

Cantor Fitzgerald has made two strong appointments this week. Cantor’s consumer group welcomes a new deputy head of corporate finance with the hiring of Tim Medak, formerly of Ernst and Young. Secondly, Jamie Cumming joins as a consultant at the investment bank. Prior to his appointment, Jamie was at Brewin Dolphin where he was chief executive of its securities business.

Media Personality": A person of great media interest

Happy Chinese New Year! So, as of today, start your weekend as you wish your year to progress - it’s officially The Year of the Horse! There will be Chinese dragons, floats, cuisine and Tangyuan a-plenty, but to witness the celebratory highlight, head central to Leicester Square this Sunday for the capital’s official New Year parade.

Sporting fans rejoice, as this weekend hosts a sporting marathon! The Six Nations will literally kicking things off: Saturday sees Wales take on Italy at 2.30pm followed by, at 6pm, England triumphantly (fingers crossed!) taking on France. Then Sunday sees Ireland attempt to defend its title as it tackles Scotland at 3pm. If you hadn’t filled your sporting boots by this point, fear not as 6pm Sunday marks the start of the American sporting event of the year – Super Bowl Sunday 2014. Here is the Evening Standards top venue tips for the full immersive, American experience.

Finally, one for the Scandiphile enthusiasts: Nordicana 2014 takes centre stage this weekend. The festival will showcase the best Nordic fiction and film at the Old Truman Brewery, Brick Lane. Featuring the compelling ‘Girl with the Dragon Tattoo’ trilogy and Wallander series, discussion forums and feasts of herring and rye… it’s a must for all Nordic Noir’s.

Follow us on Twitter @AbchurchComms

Wednesday, 29 January 2014

Chinese companies an improving bet for investors

As the global economy gradually recovers, the investment community in London is expecting a vibrant capital market with surges of IPOs and M&A activity. For the City, IPOs of Chinese companies have gained increasing attention from advisers.

However, the question remains: why should Chinese companies list in London as opposed to listing in their own country, or even Hong Kong? What makes the London stock market attractive for Chinese companies to list?

A year of slower, but concrete, growth in China

Over the past year, investors have been aware of the stagnation in growth of the Chinese economy. In 2013 China experienced its slowest growth since 2000, with only 7.6% increase in GDP, and PMI dropped from 52.5% in November to 50.9% in January 2014. This was partly caused by the US Government’s decision to trim the quantitative easing that had previously encouraged inflows of ‘hot’ money into China. The Chinese government has also brought in tighter controls on shadow banking, including non-government backed banks. Shadow banking was a major source of finance for local governments to facilitate projects which were carried out to meet the central government’s growth initiative targets.

Such concerns, however, do not diminish investors’ optimism towards investing into Chinese companies. Many are attracted to the long-term benefits brought about by recent measures introduced by the Chinese government.

Government reforms drive share price as IPO moratorium is lifted

In November 2013, the Chinese government put forward what has been termed as the biggest “reform package” since the 1990s. One of the most significant changes was the relaxation of China’s strict “Hukou” policy (a policy restricting internal migration from rural to urban areas), which is expected to facilitate urbanisation. Another significant change was the easing of the One-Child policy. Both are expected to encourage much greater demands for consumer products in the future.

The Chinese government has long been attempting to rebalance its current export-dependent and investment-intensive economic model to a more sustainable one that will be led by internal consumption. However it will take time for these measures to come into effect. What is certain, however, is that steady growth will continue in China backed up by relatively concrete and sustainable economic activity.

Various industries have benefited from the recent introduction of these new government initiatives with many Chinese businesses enjoying share price increases. Consumer goods shares were amongst the obvious winners. Companies related to baby products, such as HKSE quoted Goodbaby International, as well as dairy products makers Mengniu Diary and Yashili International soared following the reform announcement.

With the Chinese government increasing its green targets to counter the environmental effects of urbanisation, other winners were those in the renewable energy industry. HKSE quoted Wind-farm operator China Longyuan Power Group Corp saw its share price increase by 86% over the year, whilst Hanergy Solar Group Ltd. saw an increase of over 100%.

Industries that are expected to perform well going forward include the insurance industry, benefited by the Chinese government’s relevant tax policies, and exporters, benefiting from the recovering US and European markets.

In late December 2013 China reopened its market for domestic IPOs, following a moratorium imposed by the government in October 2012 as part of an attempt to reform the capital markets in China. As a result, analysts have predicted 2014 will be a good year for the Chinese stock market. Coupled with confidence in the long-term consumer market, it should be an excellent year for Chinese companies to raise funds in China.

Variety and flexibility of listing in London contribute to continuing popularity

Despite these optimistic predictions, however, Chinese companies are still choosing to list overseas and particularly in London.

London certainly provides more exposure for companies that wish to “go global”. For Chinese companies wishing to expand their business to Europe, London is strategically important and is the undisputed City of choice for a European headquarters. The City of London’s strong track-record of dealing with Africa also makes it favourable for Chinese companies wanting to expand their businesses there.

Furthermore, as the world’s most established stock market, the market regulations in London are undoubtedly more predictable and reliable than the Chinese mainland markets. Stock markets in mainland China are still subject to regulatory changes which makes the market less predictable as regulators seek to mitigate overpricing in the market. Recently, five companies which had announced their intention to list in China have retracted their intentions and postponed their IPOs following newly released rules which strengthen government control on stock price valuations.

Another advantage of listing in London is the flexibility of the London Stock Exchange when compared to, for example, the Hong Kong Stock Exchange where the process is comparatively complicated. On average, it takes two years for a company to list on the Hong Kong Stock Exchange. For smaller companies, this might not be a viable option with the time and financial costs involved. London’s Main Market on the other hand is well-known as having a faster listing process whilst maintaining supervision over public companies. London’s Alternative Investment Market (AIM) also provides an important channel for SMEs to list, with simpler listing procedures and the supervision delegated in part to a Nominated Adviser (NOMAD), who project manages the new issue.

The increasing sophistication of AIM has also made it a more appealing option. In 2013, 25% fewer companies left AIM compared with 2012. £881 million was raised in equity, 70% more than in 2012. Government initiatives have now made AIM stocks eligible for placement in ISAs and these additional tax benefits make AIM-shares even more attractive to investors. In addition to this, from April 2014, AIM shares will be the most tax-advantaged of all investments with exemptions from inheritance tax and stamp duty.

London emphasises its pro-China position

David Cameron in China
to promote UK trade, 2013
Source: The Guardian
The UK’s desire to promote trade with China has never been more obvious. Stories on Chinese investment into the country, and vice versa, have been dominating headlines over the course of the past year, followed by David Cameron and Boris Johnson’s multiple visits to the country.

Although the number of Chinese companies listing in London has fallen slightly in recent years, it is anticipated that IPOs of China-based businesses will increase, particularly bearing in mind what London has to offer. Priding itself on being the world’s most established financial centre, London would certainly be a strategic option for Chinese companies wishing to gain access to international investors. The capital markets remain an interesting place to watch as advisers expect greater deal flow from China in the near future.

Canace Wong

Canace is an Account Executive at Abchurch Communications. Brought up in Hong Kong, she is fluent in Cantonese and Mandarin. Canace has a Master’s Degree in Philosophy and Public Policy from the London School of Economics and is a key member of Abchurch’s China and Asia team.

Follow us on Twitter @AbchurchComms

Friday, 17 January 2014

Weekly Wrap Up: The Key to Israel's Tech Success

Israel, often synonymous with the term “start up nation”, has over the past few years seen the giants of the tech world swallow up some of its best start up companies. Many commentators believe Israel is on a roll following Google’s payment of $1bn for mobile traffic app Waze, Facebook’s purchase of data compression company Onavo, and Apple’s acquisition of Primesense. Israel is now the second largest source of innovation after Silicon Valley and the third largest source of listings on Nasdaq after North America and China. For a small country always in a hostile environment, what is the key to its unparallelled success?

Perhaps the answer to that question lies in region of the country’s compulsory military service. The founders of Onavo, for example, served in the army’s intelligence division Unit 8200 prior to founding the Company; a Unite renowned for producing graduates whom are behind some of the country’s most renowned start ups.

The UK is now attempting to mirror Israel’s start up success by encouraging ex services personnel to launch their own businesses; examples can be seen in what are now thriving businesses, including Mergermarket, Trailfinders and Go Ape.

Similarly in the US, large companies such as FedEx, Digital Equipment Corporation, and Walmart were founded by former members of the armed forces. Ben Brabyn (former Royal Marine and founder of Heropreneurs) set up a charity designed to help ex force personnel to start up businesses. He extols Israel as a fruitful start up hotspot and states that it should be no surprise that it is recognised as such in a country where every citizen has to serve in the military.

Where Israel lags behind is that it has not grown its companies into big leagues because of gaps in management and experience, as well as a restless entrepreneurial culture that trumps exits over organic growth. However, this is beginning to change, and Tel Aviv as the tech cluster is pushing heavily for the government to relax visas so it can attract foreign skilled workers and to open it up to global talent.

The challenge is now for London to position itself as a city of choice for tech companies looking to list, and not lose out to the number of such companies that are currently choosing to go to the US. London must look to capture a slice of this pie and to attract companies to Silicon roundabout so as to further develop its own tech sector.

Britain’s bilateral relationship with Israel is enormous: two-way trade reached more than £3.81bn by the end of 2012, compared with the £3.7bn recorded for the previous year. Britain is on track for UK Trade and Investment’s target of topping £4bn by the middle of the decade. Such a relationship is invaluable to the UK and to London and will ensure London retains its competitive advantage.

Abchaps went along to the Proactive Investors One2One investor forum to view presentations by Mwana Africa plc, Edge Resources and NioCorp (on the recommendation of RFC Ambrian). The presentations were very compelling, reminding us of the importance of having a sociable CEO as the mouthpiece for a company seeking investment.

Always keen to learn more, we also hosted two market lunches to discuss how the City’s optimization is playing out the Tech sector.

Our friends at finnCap, currently number one broking house to AIM companies, have strengthened its offering with the launch of a new investment trust, thanks to two senior appointments - Paul Harrington, formerly of Westhouse Securities and James Simpson of Jefferies.

Baker Tilly also announced Rob Donaldson, previously of Baker Tilly, as its new head of Corporate Finance;  while Norton Rose Fulbright appointed Geoff Peters, formerly Freshfields Bruckhaus, as a partner within the Company’s energy M&A team.

If you ever fancied your chances as a bit of a Fred Astaire or Ginger Rogers, now is your time to shine. Head down to the Tea House Theatre in Vauxhall on Friday night for ‘Tails & Twirls’. Dance the night away doing the quickstep, foxtrot, rumba, charlston and some cha cha cha to a live band and vintage records. 

Alternatively, the get involved as Brooklyn Bowl, the iconic Williamsburg music venue / bowling alley, makes its European debut right on London’s doorstep. Setting its roots at the O2 arena it offers 12 bowling lanes, bar areas and food served from the famous New York restaurant Blue Ribbon.

Finally, if you wanted a quieter, more cultured weekend then head down to the Business Design Centre, Islington, for the 26th edition of the London Art Fair. Treat your eyes to the wondrous, contemporary art and design being showcased by a number of notable British artists such as David Hockney, Francis Bacon and David Shrigley.

Follow us on Twitter @AbchurchComms

Friday, 10 January 2014

Weekly Wrap Up: Channel 4's media affair

This week, Channel 4 announced that it was ending its 5-year media affair with Youtube.

In a 2009 deal that saw all Channel 4 programmes (Skins, Peep Show etc) made freely available for on-demand viewing, both the broadcaster and broadcast sharer planned to benefit from a split of advertising revenues.

Now, however, the shiny-media-polish appears to have worn thin on this partnership; full length features and programmes have now been removed, though clips and trailers will still be shared. Broadcasters such as Channel 4 and BBC previously relied on platforms like Youtube for global distribution, but they have now developed their own on-demand technology to host their programmes.

The response from online trolls was predictably strong. In an age, and (in fact) a week (#Sainsburys), where media is becoming both increasingly difficult to source in hard copy and expected in freely, the news was met with acrimony.  In a Reddit post, given 467 up-votes, a complaint about having to stream Channel 4 through what the user described as a less than perfect website (in not so many words). This article incited 78 comments, most of which related anger at the media migration.

But is this announcement really a bad thing in the world of media and social media? Where does this leave Google-owned video-breathing beast of Youtube?

Youtube, the largest video sharing website and the second largest search engine,  was created to “share your videos with friends, family, and the world”. Whilst the quality of content varies, it's safe to say the vast majority is not of the polished Channel 4 product quality.  Now that full-feature and professionally made programmes have been stripped, will the platform return to its old roots of sharing social rather than professional content?

Youtube is an invaluable tool for the public to share material, and for businesses to portray engaging messages. It's arguably a far more important tool for these groups than for corporate broadcasters who now have their own means of digital distribution.

This purification of Youtube may take Youtube back to its core, improving its value as a social media sharing site. Without the distraction of the glossy programmes and feature films, those high quality videos shared by the public/ businesses will have more of a chance to make an impact. Citizen journalism will reach more eyes, and SME messages in corporate videos may be heard by more ears.

Abchaps have been getting back into their stride this week, enjoying the distinct buzz of anticipation around the City! A particular highlight was the Tech Start Up themed Market Lunch that Abchurch co-hosted with Alistair Crane, Executive Vice President of Monitise Create and original Founder of Grapple Mobile. Whilst Abchaps won't give too much away, it was undoubtedly a fabulous way to kick off 2014. We were fortunate enough to sit down with 10 of the City's most influential tech advisers, as well as the CEOs of start-ups that can only be described as "ones to watch" for 2014!

Cancacord Genuity strengthens its research team with three new appointments. Making the jump across from Oriel Securities is Charlotte Keyworth and Harry Philips who join the aerospace and defence desk and capital goods desk respectively. Arun George, previously of Edison Investment Research, also joins the technology team.

Our friends at Stephenson Harwood made a new partner appointment with the hiring of Suzanne Tarplee who joins the rail team. And Zeus Capital bolsters its healthcare team with a new analyst: Gary Waanders. Gary joins from Nomura and brings his wealth of expertise to the team; particularly in biotech and pharma.

"Vlog" - A video blog, or blog that contains video entries

Still suffering the financial effects of Christmas? Here are a couple of the best free events hitting London this weekend:

The London Ice Sculpting Festival takes over this weekend, so head East to Canary Wharf to witness the world’s leading ice sculpting teams chisel big boring blocks into spectacular creations as they carve everything from fashion pieces to miniature cities!

With the opening ceremony tonight, the annual London Short Film Festival takes over the City’s best indy cinemas and venues to showcase over 300 short films and documentaries. The LSFF will throw in the excellent added extras of live music gigs and parties too. With such an extensive series and tickets ranging from free to £10, check out the site to see what tickles your tastebuds.

Finally, for those not feeling the squeeze, soak up contemporary, cutting-edge and thought-provoking artistic culture and attend one of the mesmerising productions being performed at the London International Mime Festival.

Follow us on Twitter @AbchurchComms

Monday, 6 January 2014

What was really behind AIM’s revitalised 2013 performance?

There is a tendency in January to look back and become a little wistful about the previous year; the highs, the lows and all that seemed to run remarkably quickly in-between. Maybe it’s the influence of a little too much festive cheer (obviously, referring to the copious amounts of turkey).

There are now facts and figures (rather than just after-dinner chatter between Corporate Financiers discussing their Q1 / 2 pipeline) which detail the success of the AIM market in 2013. According to UHY Hacker Young’s latest AIM report:
  • £881m raised (70% increase on 2012)
  • 56 companies joined
  • 25% fewer companies left (delisting or insolvency) than 2012. It is widely considered that the Alternative Investment Market is now competing with the FTSE main markets in terms of generating returns for investors.

What has changed to drive this growth?

Have increased regulatory sanctions aligning AIM companies corporate governance with those of the main market shed its reputation as the wild-west of exchanges? Perhaps the government’s effort to facilitate SME innovation, such as “patent box” tax breaks for biotech companies, have captured the imagination of investors? Or has the inclusion of AIM stocks in ISAs provided a fresh incentive?

Journalist David Prosser looks to another veritable driver as he questions whether the audience that AIM appeals to may be responsible for the ever-improving performance. AIM is a market of opportunity for “ordinary investors” to pick out overlooked and undervalued stocks that institutional investors have missed.

Whilst realistically the answer lies in the healthy combination of all these factors, there is one integral (and often undermined) point that has changed:

The maturity of companies coming to market

Maturity does not just equate to the amount of years a company has existed, but it can also be quantified in terms of wisdom and forward thinking; in other words, how thoroughly did the company anticipate and plan an eventual exit.

Companies are beginning to consider their exit from inception… they are not only concerned with profit margins, but also considerations such as working cost of capital and the maintenance of growth. They want to create the optimum final valuation of a well-structured Company that has water-tight Corporate Governance. These factors give investors more confidence upon entry into the public domain and later in the secondary market.

The investment story

The increased maturity of companies is also reflected by their decision to consider financial PR at an earlier stage during the IPO process. Companies are realising that their investment story cannot be created last minute. An integrated communication strategy should be prepared to position the company correctly to key audiences and manage market expectations of their stocks at an early stage. Some of the most successful IPOs of 2013 have proven the virtuous circle of commitment that exists between investment in PR, IR and share price.

An Abchurch client, SyQic, the fast growing OTT provider of live TV and on-demand paid video content across mobile and internet enabled consumer devices, demonstrated a successful flotation when it’s shares soared 30% on it’s first day of dealings following an over subscribed road show thanks to a well communicated investment story. 

Return to the status-quo

Many in the City are now looking ahead to 2014 with eager anticipation. What exciting, profitable and increasingly international companies are going to debut on the London junior market in 2014? The answer, in all likelihood, is many. And yes, there will be some that falter, but we must remember that this was the case pre–2008 too. The existence of one or two non-starters does not indicate the existence of a so called bubble in London markets, but rather a return to the natural status-quo. But as David Prosser pointed out, the AIM market is now a more dominant force and will continue to go from strength to strength.

Stephanie Watson

Follow us on Twitter @AbchurchComms