Thursday 31 August 2017

JAPAN TIMES Brexit Headlines: 1 Aug - 31 Aug 2017

The Japan Times
Brexit Headlines


Britain outlines plans to break free of European Court after BrexitWORLD / POLITICSAUG 24, 2017

Britain on Wednesday outlined several escape routes from the "direct jurisdiction" of the European Court of Justice after Brexit, one of Prime Minister Theresa May's key aims in talks to unstitch 40 years of EU membership. In a government paper on the highly sensitive topic, ...














Royal London Says Stock Bull Market Has Room to Run

Trevor Greetham, head of multi-asset at Royal London Asset Management, discusses the impact of geopolitics on markets and where he sees opportunity. He speaks on "Bloomberg Daybreak: Europe." (Source: Bloomberg)

August 31st, 2017, 4:28 PM GMT+0800




https://www.bloomberg.com/news/videos/2017-08-31/royal-london-says-stock-bull-market-has-room-to-run-video

Saturday 26 August 2017

The EU is a house deeply divided

The issue of refugees is bringing out into the open the deep divisions inside the EU which make a nonsense of ever closer union. Former communist countries who endured occupation do not take kindly to being dictated to by Brussels, and Brexit may yet be an example they will wish to follow

Brexit
Brexit in red, but the green light is coming
66614605-3614-4646-af40-971ba1161ba3
Jayne Adye
On 26 August 2017 10:24
There is one thing the EU is very good at: botching things in the short term for some apparent gain, only to have it bite them in the derrière down the line.
When the EU brought many ex-Communist states into the Union during the ‘big bang’, with the wholly laudable aim of instituting democracy, the rule of law and free markets, the EU also brought into the Union countries with considerably different cultures and histories than those of Western Europe.
These divergent cultures are now making themselves evident, and threaten to destroy the Union’s beloved principle of freedom of movement. These differences may see some states follow Britain out of the door! This creates a rather awkward situation for EU leaders while the Brexit negotiations hum in the background.
The countries at the centre of this issue are Poland, the Czech Republic and Hungary. The spectre causing these tensions has become familiar in recent years -- immigration. What’s different this time is we are now seeing the culmination of these disagreements between the aforementioned countries and their Western European counterparts.
In September 2015, the EU’s Interior ministers voted to approve a commission proposal in which it was decided Member States would take in refugees based on a quota system. This was intended to relieve pressure on Greece and Italy, who were bearing the brunt of the crisis at the time.
Poland, Hungary and the Czech Republic are refusing to comply. The EU launched formal legal proceedings against them on July 11th. If successful, the punishment in this case is only financial, but given they are not the richest of countries, it is hard to see how they will be able to comply.
At the same time, the EU is investigating Poland under its new Rule of Law framework, introduced in 2016. New laws are being introduced to allow the Polish executive to appoint members of the judiciary, and have caused much concern among EU leaders. The ultimate sanction could be the suspension of Polish voting rights.
What we are seeing among these former Eastern Bloc countries is the confidence in themselves to reject the noose of the European Union. All of these countries have rich histories and distinct cultures, but what marks their societal divergence from Western Europe is they have been mired in recent history by invasion and, most importantly sustained, occupation.
To illustrate the point, in 1222 Hungary’s Golden Bull was one of the first documents to place constitutional limits on a European monarch’s power -- just 7 years after Magna Carta. In the 15th century Pope Pius II referred to Hungary as “the shield of Christianity and the protector of Western Civilisation”. Hungary is also a cultural treasure trove, known for its tradition of folk and classical music and for having beautiful Renaissance-style architecture.
Poland was one of the key early havens for the Enlightenment in the 16th century. It was a relative hotbed of culture and science. It is no coincidence one of the first printing presses was established in Krakow in 1473. Poland was also almost unique in its policies of religious tolerance at the time. This culture of enlightenment made Poland one of the major European powers in the late medieval and Renaissance period.
The History of the Czech Republic is somewhat more complex, being known as the Kingdom of Bohemia for a long period, and being part of multiple European empires, including the Holy Roman Empire and the Austro-Hungarian Empire. What remains, however, is its deep sense of nationhood, going back over a millennium, and its participation in the European Enlightenment, both culturally and industrially.
What unites these countries is a strong independent sense of their national identity and a very recent memory of an overarching power oppressing their nationhood and inflicting serious physical and economic harm upon their citizens.
When the Soviet Union fell in 1989, joining the European Union was almost an inevitability. Leaving the yoke of totalitarianism, which had devastated their economies, in favour of an institution designed to promote economic prosperity and protect individual freedom, was irresistible -- especially given the development funds offered by the EU.
However, all three of these countries -- especially Poland -- have experienced significant economic growth since their liberation from Soviet influence and it has given them a renewed sense of self-confidence.
This new self-confidence, combined with a strong sense of national identity and the very recent memory of being pushed around by a supra-national power, provides a potent mix to resist the EU when it makes demands. They are now rebelling against the imposition of migrant quotas, especially when the migration crisis is largely the result of other EU’s leaders ineptitude.
Angela Merkel attracted many more migrants with her open door policy, leaving countries like Italy and Greece to fend for themselves, as migrants turned up on their shores, most trying to make their way to Germany, or across other EU countries to try and get to Britain.
With nowhere near the resources to properly vet the incoming migrants, it’s no wonder Poland, Hungary and the Czech Republic don’t feel it’s their responsibility to house them.
As it stands, Poland looks adamant in its resistance against the EU’s one-month ultimatum calling for it to change its proposed judicial reforms. Hungary and the Czech Republic don’t look likely to concede much ground on migrant quotas either.
Other EU countries are not making adequate provisions for migrants. It’s all well and good taking them in, but unless permanent homes are provided, along with proper work avoiding the cost of social benefits to the host nation, the countries and communities will collapse under the pressure.
Once we Get Britain Out of the European Union Poland, Hungary or the Czech Republic could well follow.
Jayne Adye is Director of cross-party grassroots campaign Get Britain Out

Thursday 24 August 2017

History will not be kind to the "broken people" of Remain

The infantilism and anti-intellectualism of the anti-Brexit camp has created much unnecessary bad feeling in Britain. But, like the Fellow Travellers of the Cold War, they are the ones that will ultimately suffer when history hands down its judgement


Vote-remain
A lost cause...
The_commentator_logo_updated9
the commentator
On 24 August 2017 09:14
Labour MP Laura Pidcock has achieved a certain notoriety in recent days for her wholly bigoted and blinkered assertion that she will never befriend any of her Conservative parliamentary counterparts on the grounds that they are the "enemy".
It is a classic expression of the totalitarian mind: the total demonisation of political opponents is the counterpart to the total glorification of the millenarian cause and, often, the leader at its helm.
It is no accident that the personality cult on the one hand and, to appropriate Orwell, the "two-minute hate" of the oppositionist on the other, is a central part of the Left-wing tradition.
But, if the sorry state of Britain's anti-Brexit Remain camp is anything to go by, hyper-personalisation of politics combined with an almost total rejection of inconvenient evidence which threatens ideological certainties, is a feature that is not exclusive to the old Marxist-Leninist edifice.
It remains the case, well over a year after the referendum, that Remain supporters will not even speak to ertswhile friends, and, in some cases, family members who backed Brexit.
Mothers keep the peace at the dinner table by hurriedly moving the topic of conversation away from Britain's impending departure from the EU lest angry Remainers cause a scene.
It is never the other way around. And this is not simply because Brexit won. There would have been a few loonies on the Leave side had the vote gone the other way. Some on the darker fringes of the internet would probably still be banging on about how the referendum had been "rigged".
But the great mass of Brexiteers, including those surrounding The Commentator, would have extended the hand of friendship to the victorious camp, and moved on, in much the same fashion that we all have to get over a defeat at a general election.
Not so the Remain camp, and this is very far from being a pathology that affects their fringe. Right through the centre ground of Remain there is a viciousness and a disdain that will not go away.
Despite overwhelming evidence that Brexit is being driven by free trade internationalists, Brexiteers are still cast as small minded anti-immigrant chauvinists who want to pull up the drawbridge and retreat into a mythical Golden Age when Britannia ruled the waves and Johnny Foreigner knew his place.
The fact that the post-Brexit immigration regime will most likely resemble Canada's -- widely praised as the most fair-minded and efficient immigration system on the planet -- is erased from a mindset that so desperately needs to demonise its opponents that no amount of evidence will ever shake it.
It is the same with the endlessly repeated distortion that Brexit only won due to a campaign of lies. In fact, the only significant claim that could be construed as dishonest was on the amount of money Britain would be able to spend on the NHS once it stopped paying its dues to Brussels.
But the £350 million a week claim was more an exaggeration than an outright lie. We do not countenance it. Nothing short of total honesty in political campaigning will ever do. But the fundamental truth that, post-Brexit, Britain will be able to spend money it is currently sending to the EU on institutions such as the NHS is sound.
Compare that with the entire edifice of lies that formed the core of the Remain Campaign. Project Fear, as it was rightly called, made any and every claim that it could about impending doom with reckless and total disregard for the truth.
This included bizarre claims about excrement piling up on our beaches once we were no longer subject to EU environmental regulations, and the now infamous, and wholly disproved, predictions of immediate economic collapse.
They didn't just get it wrong, they didn't care whether they got it wrong. When they made the predictions, truth or falsity were irrelevant considerations. Scaremongering trumped all.
The dishonesty continues as they refuse to take account of economic data showing that we didn't go into the predicted recession, unemployment tumbled (to a 42 year low) rather than soared, foreign direct investment skyrocketed rather than sank without trace.
They hang every remaining piece of credibility on the decline of the pound, something quite predictable (and predicted by many Brexiteers, including ourselves) and which is due to sentiment about uncertainty and not a decline in our economic fundamentals. When the pound reverses course, as it will once Brexit is finally accomplished, they will have nothing left, their reputations and their credibility in tatters, never to recover.
And that is the price these people will pay. You can't get something as big as this wrong and hope that people won't notice. Future historians will look at their record absent the emotionally charged atmosphere of the times, and their judgement will be harsh.
It is reminiscent of what happened at the end of the Cold War when Western Fellow Travellers of Communism had to face up to their final defeat in a world historic clash of ideas. It was too much for many who emerged as the "broken people", left with nothing much to say, and less to offer. They had invested too much in a cause that had been definitively defeated. They had nowhere to go.
All the signs are that the Remain camp is heading the same way. They need Brexit to fail just as the Fellow Travellers needed Capitalism to fail. But it won't. Even if there are a few bumps on the way, there is very little chance that Brexit will alter the trajectory of the British economy one way or the other.
We may benefit somewhat from free trade agreements that we otherwise wouldn't be able to forge as members of the EU. We may see a very slight fall in the first year or two in trade with the EU, if a free trade deal is not forthcoming. But the overall success of the British economy will depend on how we manage it. Just as the overall success of Germany and France will depend on how they manage their economies, not on their membership of the EU.
Time will tell, and, in any case we can debate these matters. But it is difficult to have a sensible debate so long as Remainers refuse to accept a democratic referendum, and continue in their shameful, hyperpersonalised, and often infantile, approach to their defeat. 
They need to get over themselves. If they can't, history will not be kind to them, and it is they who will suffer most. 
http://www.thecommentator.com/article/6644/history_will_not_be_kind_to_the_broken_people_of_remain

Tuesday 22 August 2017

Cheesegrater Owner, R&F Replace Wanda in London Land Deal

Two Hong Kong-listed developers, including the owner of London’s Cheesegrater tower, agreed to buy a 470 million-pound ($606 million) land plot in London that Dalian Wanda Group Co. relinquished after coming under Chinese government scrutiny.
August 22, 2017, 7:48 PM GMT+8
  • R&F confirms purchase details in interview in Hong Kong
  • Revamp of deal marks second time smaller developer stepped in
Image result for cheesegrater london

Guangzhou R&F Properties Co. and C C Land Holdings Ltd. will buy the 10-acre Nine Elms Square land, Michael Lee, R&F’s corporate finance director, said in an interview in Hong Kong Tuesday.
Wanda, along with aggressive Chinese dealmakers such as Anbang Insurance Group Co., Fosun International Ltd. and HNA Group Co., have come under government scrutiny over outbound investments in recent years. The revamped London property deal came on the heels of the government’s clearest-yet directive laying out rules to invest in overseas deals.
Under the new rules set by the state council, China’s cabinet, investments in the gambling and sex industries are banned, while those in property, hotel, film, entertainment and sports are restricted. By contrast, investments to support the nation’s ambitious “Belt and Road” initiative backed by President Xi Jinping are encouraged.
It’s the second time in five weeks that R&F, one of China’s top 20 developers and listed in Hong Kong, has stepped in at the last minute as a buyer in a Wanda-linked deal. Last month, R&F agreed to buy 77 hotels from Wanda for about 19.9 billion yuan ($3 billion) in a surprise twist to a previously announced deal where Sunac China Holdings Ltd. was to have been the sole acquirer of $9.3 billion of Wanda assets.

London Investments

The seller of the Nine Elms land, a joint venture between St Modwen Properties Plc and Vinci Plc, said Monday that the transaction had been completed, without identifying the buyers. A representative at C C Land declined to comment.
Hong Kong real estate investor C C Land earlier this year paid 1.15 billion pounds ($1.5 billion) to buy the Leadenhall Building, as the Cheesegrater is formally known.
Lee, who said the buyers have already paid the seller, added that R&F owns a site adjacent to the Nine Elms land, making it an appropriate investment for the developer. R&F too is no stranger to the U.K. capital, where demand for new homes has been buffeted by uncertainty caused by the Brexit vote and successive tax increases that penalize investors. The company earlier this year bought Nestle Tower and surrounding land in the Croydon district from Minerva, Property Week reported.
In June, Dalian Wanda Commercial Properties Co., the property arm of the Chinese conglomerate founded by billionaire Wang Jianlin, agreed to buy the Nine Elms land, and the deal was expected to be completed in the summer.


Wanda originally was going to develop the London site, near Battersea Power Station, into 1,900 homes as well as stores and leisure units. The developers are discussing whether Wanda will be involved in the operation of the project, R&F’s Lee said.
https://www.bloomberg.com/news/articles/2017-08-22/r-f-cheesegrater-owner-replace-wanda-in-london-land-purchase

Wanda Walks Away From London Land Purchase Amid China Scrutiny

  • Chinese group ends plans to buy 10-acre Nine Elms land plot
  • Move comes amid mounting Chinese scrutiny of overseas deals
Wanda’s International Real Estate Center is no longer in pursuit of the 10-acre Nine Elms Square land, the Chinese company said in a statement to Bloomberg. In June, Wanda agreed to buy the land from a venture between St Modwen Properties Plc and Vinci Plc.
The move is the latest sign that Wang, who was one of China’s most prolific buyers of overseas assets until last year, is downsizing. Last month, the conglomerate agreed to sell most of its hotels and theme-park assets to Sunac China Holdings Ltd. and Guangzhou R&F Properties Co. for about $9.5 billion.
Big Chinese dealmakers such as Wanda, Anbang Insurance Group Co.Fosun International Ltd. and HNA Group Co. have been under increasing scrutiny this year as the government steps up its clampdown of capital outflows to protect the yuan from weakening further. Last week, the government formally laid down new rules on overseas investments, making explicit its de facto campaign against "irrational” acquisitions of assets in industries ranging from real estate to hotels and entertainment.
Still, St Modwen said Monday that the land in Nine Elms Square site has been sold, though it didn’t identify the buyer.
https://www.bloomberg.com/news/articles/2017-08-22/wanda-walks-away-from-london-land-purchase-amid-china-scrutiny-j6mxxzja?

Monday 21 August 2017

Hong Kong property investors go trophy hunting in London despite Brexit

LONDON: Chinese investment in London commercial property has more than trebled since before Britain voted to leave the European Union, most of it channelled through Hong Kong at a time of heightened political uncertainty in the former British colony.

Monday, 21 August 2017 | MYT 3:34 PM


While others have pulled back from British property following last year’s Brexit referendum, investors largely from Hong Kong are snapping up the British capital’s best-known skyscrapers including the ”Cheesegrater” and ”Walkie Talkie”.

In the first six months of 2017 Chinese investors spent 3.96 billion pounds (US$5.10 billion) on London commercial property according to data from the CBRE real estate group, the highest amount on record and outpacing the 2.69 billion pounds spent in the whole of 2016.

Hong Kong accounted for 92% of the Chinese investment, according to the Knight Frank agency. Hong Kong food conglomerate Lee Kum Kee is set to pay 1.28 billion pounds later this month for 20 Fenchurch Street - the 34-storey skyscraper known as the Walkie Talkie - a record for an office building in Britain.

With Beijing cracking down on foreign deals by mainland companies, investors there are instead using Hong Kong as a conduit for overseas deals. China’s state planner announced on Friday that the country will strengthen rules to defuse risks for domestic companies investing abroad and curb ”irrational” overseas investment.

However, Hong Kong-based investors are more significant players.

“Deals from mainland China already make up a smaller proportion of the activity from the region, with Hong Kong investors most active,” said Anthony Duggan, head of capital markets research at Knight Frank. ”We expect that Chinese investors will still look to make strategic real estate purchases that fit within their business plans.” 

Hong Kong’s freedoms, including judicial independence, are constitutionally enshrined under a ”one country, two systems” deal struck before Britain returned the territory to China in 1997. However, concerns have been rising in recent years and an appeals court jailed three leaders of Hong Kong’s democracy movement last week.

Tens of thousands protested in Hong Kong on Sunday against the jailing of the young activists, with many demonstrators questioning the independence of the judiciary.

Hong Kong’s legal chief has denied any ”political motive” in seeking the prison terms.

TAKING CONTROL

“If you’re concerned that China is taking control of Hong Kong more and more and you need to take capital out of that jurisdiction, London is attractive,” said Chris Brett, head of international capital markets at CBRE.

Several factors are drawing the investment, including sterling’s 12% drop since the Brexit referendum against the US dollar - to which the Hong Kong dollar is pegged.

“Cheaper money, the rule of law, cultural familiarity and a need to diversify out of a home market is what’s driving Hong Kong demand in the UK,” said James Beckham, head of central London investment at property consultant Cushman & Wakefield, which advised the Walkie Talkie’s buyers and Cheesegrater’s sellers.

Record Hong Kong commercial and residential property prices, along with the political concerns are pushing investors to turn to overseas markets where rental yields are higher.

The illiquidity of a building compared with other investments is also an attraction, should Beijing demand that funds be repatriated to China, Jefferies analyst Mike Prew said.

The Brexit vote means some London-based financial jobs will shift to the continent or Ireland so that banks can continue selling to clients in the EU.

But this negative factor for the office market is offset by the pound’s fall, which makes property cheaper for foreign investors, and the fact that the buildings sold have come with tenants signed up to leases of around 10-15 years.

Real estate sources said other City of London landmarks, including 30 St Mary Axe - known as the Gherkin - and the Heron Tower are also attracting interest from Hong Kong investors.

These prime ”trophy” assets, like the Cheesegrater and Walkie Talkie, have well-known tenants and are in limited supply.

Chinese pricing of UK commercial real estate has already established an ”entry premium” of about 100 basis points on yields for platinum or top grade buildings, according to Prew.

Capital from China and Hong Kong has accounted for a third of all investment in London commercial real estate this year, up from less than 10% before the referendum, according to CBRE.

This stands in contrast to other investors. 

Money raised by UK property-focused private equity funds has fallen since the Brexit vote, with US$2.9 billion raised in the first half of 2017 compared with US$3.7 billion a year earlier, according to data from Prequin.

That’s as the outlook for the London office market as a whole clouds before Britain’s EU exit in 2019. The amount of empty space has jumped since the referendum, with developers having to offer longer rent-free periods and lease breaks early into leases to secure tenants.

Central London office developer Derwent London, which has a portfolio worth 4.8 billion pounds, forecast that 2017 rental values would be anything between down 3% to up 2%.

SKY HIGH 

London’s skyscraper boom of the last decade reshaped the skyline, adorning it with unusually shaped silhouettes inspiring nicknames such as the Shard and the 24-storey Can of Ham, which is due to open next year.

The largest chunk of cross-border Chinese real estate investment continues to be poured into the United States, but that proportion declined in the first half of the year while increasing in Britain.

Buildings in London are cheaper per square foot than in Hong Kong, Tokyo, New York and San Francisco, but they offer higher rents than most other global centres of their stature, according to Knight Frank data.

“(Chinese investors) want stable and good returns and trophy buildings generally look part of that,” said Dan Norris, real estate head at Hogan Lovells, the second-largest law firm in China.

Norris helped Chinese buyers in May to buy 20 Gresham Street, a seven-floor building near St Paul’s Cathedral, for around 300 million pounds. Asian investors were choosing to avoid development deals as they remained wary of riskier projects and were most keen on London offices, he added.

Sales of trophy assets have been a prominent feature of the central London deal market for the past six months, resulting in 29 transactions of over 100 million pounds completing, up from 19 a year ago, according to data from BNP Paribas Real Estate.

The most recently sold skyscrapers are also cheaper than the same calibre of building in Hong Kong: CBRE data show rental yields stand at about 3.4%-3.5% for a top-tier London building versus 1% for a similar Hong Kong one. - Reuters


http://www.thestar.com.my/business/business-news/2017/08/21/hong-kong-property-investors-go-trophy-hunting-in-london-despite-brexit/