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Britain is Still Struggling to Convince Companies to Invest

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(Bloomberg) — Boris Johnson promised to deliver “a transformative agenda of investment” ahead of the 2019 general election, insisting that his Conservative government could unleash Britain’s private sector and pave the way for a decade of prosperity.

The positive post-Brexit vision worked at the ballot box and won Johnson a thumping majority. Yet three years later, the economy has gone into reverse, a long recession is expected and businesses investment is 8.4% lower than when the former prime minister delivered his manifesto, according to data published Friday.

Meanwhile, the Tories are on to their third leader of the current parliamentary term, and fifth chancellor of the exchequer, as Britain’s finance minister is known.

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Poor productivity and sluggish growth are nothing new, having plagued the UK economy since the 2008 financial crisis. Current Prime Minister Rishi Sunak blames low levels of investment, particularly from the private sector.

“We must put all our energies into three priorities: capital, people, ideas,” the then-Chancellor told a financial-industry audience at his Mais Lecture in February. “And if we can do that, then we can rejuvenate our national productivity.”

Progress since then has been scant. The government asked business groups for ideas on how to encourage capital spending, which flat-lined following the 2016 vote to leave the European Union.

But any sense of a plan was lost amid the summer’s political chaos in which Johnson was ousted from Downing Street and replaced by Liz Truss who only lasted seven weeks.

Truss’s government took charge in September and quickly announced plans for investment zones, parts of the country that would offer sweeping tax cuts and exemption from many regulations. Local authorities raced to submit their applications by an Oct. 14 deadline but six days later Truss resigned. The new government is set to abandon the project altogether.

‘Hugely Destabilizing’

“It’s hugely destabilizing,” says Kitty Ussher, chief economist at the Institute of Directors. “When businesses feel things are changing rapidly, it makes it even less likely they’ll want to commit their hard-earned profit to investments.”

Other business groups are unsure whether the zones were a good idea in the first place.

“Investment zones on top of free ports felt a bit odd,” Shevaun Haviland, director general of the British Chambers of Commerce, told Bloomberg News. Her main concern was “that rather than stimulating new growth, it just moves” investment away from other areas. The UK already has eight free ports which benefit from lower taxes and looser planning restrictions.

Business confidence has plummeted in recent months, according to BCC surveys of its members, with more bosses expecting profits to fall rather than rise. A snap poll last month following the government’s latest fiscal statement found that only 6% of companies said they would increase investment, while nearly four in 10 said they would cut it back.

Official figures Friday showed business investment fell 0.5% between July and September, the second quarterly decline this year.

Weak confidence puts even more pressure on the government to offer tax incentives and break a vicious cycle in which businesses don’t want to invest and the subsequent lack of growth makes everyone even more miserable.

Sunak brought in a “super-deduction” as chancellor, allowing firms to reduce their tax bill by 25 pence for every 1 pound they spend on qualifying plant and machinery. But with the policy due to expire next April, businesses are still waiting to discover if it will be extended or, if not, what will replace it.

While more details may come in Chancellor Jeremy Hunt‘s Autumn Statement next week, the scope for giveaways and tax allowances is limited by the huge hole in the public finances. Hunt is expected to announce tax rises and spending cuts amounting to £50 billion ($59 billion).

The Conservatives could, however, improve the situation simply by delivering stability. “I know there has been a cloud of uncertainty hanging over the British economy in recent years,” Sunak said in his February Mais Lecture. “But that cloud is lifting.”

Rather than lifting, the clouds darkened amid Tory infighting, a lengthy leadership contest, and Truss’s calamitous mini-budget in September that triggered market turmoil and a Bank of England intervention.

“There’s a cost-free solution for the government,” says IoD economist Ussher, who was a Treasury minister during her time as a Member of Parliament for the opposition Labour Party.

“Make sure there’s a basic hygiene of confidence — that’s been lost recently. Be slow, be steady. And realize these are real business people making real decisions.”

–With assistance from Sabah Meddings.

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CPP Investments Anchors New IndoSpace Fund with US$205 Million Investment – Yahoo Canada Finance

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MUMBAI, India, Jan. 30, 2023 /CNW/ – Canada Pension Plan Investment Board (CPP Investments) today announced an investment of US$205 million as an anchor investor in IndoSpace‘s new real estate fund. IndoSpace is a leading real estate company in India. The investment marks the first close for IndoSpace Logistics Parks IV (ILP IV), the company’s fourth development vehicle, targeting US$600 million of total equity commitments.

Image of sites (CNW Group/Canada Pension Plan Investment Board)

Image of sites (CNW Group/Canada Pension Plan Investment Board)

This is the latest venture between CPP Investments and IndoSpace. The first joint venture, IndoSpace Core, was established in 2017 and now owns the largest portfolio of stabilized modern logistics assets in India. CPP Investments has also invested in ILP III. Following the investment in ILP IV, the partnership will exceed US$1 billion in assets.

ILP IV will add an additional 25-30 million square feet to the IndoSpace portfolio, furthering IndoSpace’s leading position in the Indian market. ILP IV will focus on India’s largest logistics real estate markets: Ahmedabad, Bangalore, Chennai, Delhi, Hyderabad, Kolkata, Mumbai, and Pune. The establishment of ILP IV follows on from the first three development funds, which have a combined total of 56 million square feet of modern logistics real estate in India.

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Hari Krishna V, Managing Director, Head of Real Estate India, CPP Investments, said, “Over the past few years, we have made numerous investments in India’s industrial space, where we see strong demand as the manufacturing sector continues to grow and the e-commerce sector matures. We are pleased to be working with our longstanding partner IndoSpace to further capitalize on opportunities in this space and believe this investment will deliver strong risk adjusted returns for CPP contributors and beneficiaries.”

Brian Oravec, Managing Partner and CEO, IndoSpace Capital Asia, said, “We are excited to extend our successful partnership with CPP Investments. CPP Investments’ commitment to ILP IV is a testament to IndoSpace’s leadership in the industrial and logistics real estate space in India. ILP IV will allow us to continue to expand our unique national network to better serve our customers. Industrial and logistics infrastructure is a key enabler of economic growth. To meet India’s aim of becoming a US$5 trillion economy by 2025, IndoSpace is excited to continue to be one of India’s key infrastructure creators.”

About CPP Investments

Canada Pension Plan Investment Board (CPP InvestmentsTM) is a professional investment management organization that manages the Fund in the best interest of the 21 million contributors and beneficiaries of the Canada Pension Plan. To build diversified portfolios of assets, investments are made around the world in public equities, private equities, real estate, infrastructure and fixed income. Headquartered in Toronto, with offices in Hong Kong, London, Luxembourg, Mumbai, New York City, San Francisco, São Paulo and Sydney, CPP Investments is governed and managed independently of the Canada Pension Plan and at arm’s length from governments. As per September 30, 2022, the Fund totalled C$529 billion. For more information, please visit www.cppinvestments.com or follow us on LinkedInFacebook or Twitter.

About IndoSpace

IndoSpace (www.indospace.in) is the largest investor, developer, and operator of grade A industrial and logistics real estate in India. IndoSpace has the largest national network of 50 logistics parks with 56 million square feet delivered/under development across 10 cities. With India’s largest and most experienced industrial real estate team, IndoSpace continues to lead the development of key logistics infrastructure for India’s economic growth. For more information, visit www.indospace.in and follow us on LinkedIn, Twitter, and Facebook.

CPP Investments logo (CNW Group/Canada Pension Plan Investment Board)CPP Investments logo (CNW Group/Canada Pension Plan Investment Board)

CPP Investments logo (CNW Group/Canada Pension Plan Investment Board)

IndoSpace logo (CNW Group/Canada Pension Plan Investment Board)IndoSpace logo (CNW Group/Canada Pension Plan Investment Board)

IndoSpace logo (CNW Group/Canada Pension Plan Investment Board)

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View original content to download multimedia: http://www.newswire.ca/en/releases/archive/January2023/30/c6051.html

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Zacks Investment Ideas feature highlights: Meta Platforms, Alphabet, Snap, Oracle and Global Social Media ETF

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For Immediate Release

Chicago, IL – January 30, 2023 – Today, Zacks Investment Ideas feature highlights Meta Platforms META, Alphabet GOOGL, Snap Inc SNAP, Oracle ORCL and Global Social Media ETF SOCL.

TikTok Ban Coming: 3 Stocks That Would Benefit

The Social Media Landscape Is Evolving

The social media landscape has changed dramatically over the past few years with the rapid ascent of the personalized video platform app TikTok. Despite TikTok’s rapid rise, Meta Platforms and Alphabet are still the dominant players. In terms of monthly active users, three Meta platforms make up the top four rankings globally: Facebook (#1), Whatsapp (#3), and Instagram (#4).

Alphabet holds the second spot with its video platform Youtube and TikTok is ranked #6. Even with the continued dominance of existing players like META and GOOGL, stock performance has been lackluster in recent years. The Global Social Media ETF is the most followed social media ETF (note that it does not include TikTok).

What has Led to the Underperformance of Existing Players?

For one, Meta CEO Mark Zuckerberg is paying less attention to his lucrative social media business and instead investing valuable resources in what he sees as the future – the metaverse. Approximately 20% of Meta’s current investments are aimed at this project. While the bold bet has not panned out for Zuckerberg and Meta yet, he plans to stay the course.

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The other major factor leading to the underperformance in domestic social media platforms such as Instagram, Youtube, and Snap Inc’s Snap Chat platform is TikTok’s success.

Chinese-based ByteDance launched TikTok in the United States in 2016, and since then, the platform has dominated. The app, which allows users to create and modify short-form videos, has caught on, especially with the younger generation. TikTok’s competitors have noticed. To win eyes back, Instagram has launched “Reels” and Youtube has created “Shorts” –aimed at users who prefer short, customizable videos like Tik Tok.

SnapChat, already in the short video space, has suffered the most from TikTok’s rise.

National Security Concerns

Though TikTok is one of the dominant global social media players and shows little signs of slowing growth – other factors may play a significant role in the social media space moving forward. Concerns are growing that ByteDance is collecting unnecessary personal data on its users and possibly supplying it to the Chinese government (the biggest rival of the U.S.).

Former President Donald Trump attempted to ban TikTok in 2020, but ultimately the app was able to remain active. The Biden administration struck down the potential Trump ban on TikTok but ordered a national security investigation.

A Potential Catalyst for Domestic Social Media Platforms

Even with the failed TikTok bans of the past, momentum is growing for a new possible attempted ban. In the past year, FBI director Christopher Wray, FCC Commissioner Brendan Carr, and Senator Josh Hawley have called for a domestic TikTok ban. Meanwhile, several U.S. colleges have implemented their own bans (via WiFi) amid security concerns.

Tuesday, Josh Hawley announced he would introduce a bill to ban the app. Investors who follow the social media space should keep a close eye on how the efforts to ban the app play out. If the app is ultimately banned, SNAP will benefit the most, along with META and GOOGL. Software giant Oracle, which supports TikTok via its cloud platform, would stand to lose.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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ChatGPT explains Warren Buffett's investing strategy, names stock picks – Markets Insider

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  • Insider’s Phil Rosen asked ChatGPT to explain Warren Buffett’s investing strategy.
  • The viral language tool shared how value investing has given Buffett an edge, and broke down his best investment decision.
  • The bot also named two potential stocks that would align with Buffett’s strategy. 

ChatGPT, whose parent is getting a $10 billion investment from Microsoft, has shown its competence in writing stock stories, dating-app messages, and even an email announcing layoffs

As it turns out, OpenAI’s viral language tool fared well in its breakdown of Warren Buffett’s investing approach, too. 

I asked ChatGPT to explain the Oracle of Omaha’s most important strategy that helped him reach his legendary billionaire status, and within seconds the bot spat out an analysis of value investing.

“Warren Buffett’s most important investing strategy is value investing, which involves identifying undervalued companies with strong potential for growth and a durable competitive advantage, and then holding onto those investments for the long-term,” ChatGPT said. “He also follows a principle of investing in businesses he understands, with a focus on companies with predictable earnings and a strong track record of increasing profits.”

That said, when I inquired what Buffett’s most important decision has been in his career, ChatGPT pointed to his investment in Berkshire Hathaway decades ago. Buffett “transformed it into a holding company and used it as a vehicle to make a series of successful investments and acquisitions,” the bot said.

ChatGPT’s stock picks for Buffett

To fully carry out the interrogation, I tasked ChatGPT with naming stocks that Buffett could add to his portfolio. 

While the bot doesn’t have access to real-time markets data and its knowledge only goes up to 2021, it had plenty of historical intel to work with, given Buffett’s long career. 

It named PepsiCo and Unilever as stocks that would make sense for Buffett to invest in, given they’re consumer goods companies with strong brand recognition and consistent revenue growth. Buffett famously consumes five cans of Coke a day, but he had been a Pepsi drinker for nearly 50 years before that.

As for Unilever, Buffett had come close to sealing a deal on the company along with Kraft Heinz in 2017, but it eventually fell through.

ChatGPT also named Amazon, which Buffett already owns, and Microsoft, which Buffett owns an indirect stake in via ownership of New England Asset Management, as two examples of blue-chip companies with a track record of innovation.

Then it listed Johnson & Johnson and Pfizer — Buffett owns the former, and has previously owned the latter — as two stable healthcare options that would fit Buffett’s strategy.

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