Foreign investment in Scotland remained positive last year but is showing signs of stalling with the current health crisis, according to a report.
EY’s annual survey of “attractiveness” of different parts of the UK in securing inward investment has placed Scotland in lead place behind London for the seventh year in a row.
The number of projects in Scotland was up to 101, after a dip in 2018 to 94.
That raised the Scottish share of UK-bound projects to above 9%.
However, the accountancy group’s survey of investors found 65% of announced projects had been put on hold since the Covid-19 crisis began. Only 3% had been cancelled completely.
EU caution
European Union countries were found to have a markedly higher level of caution among foreign investors.
Glasgow secured one more investment project than Edinburgh last year, with 23.
Finance house JP Morgan had the biggest single project last year, with an intention to build up to 2,700 employees in Glasgow.
That helped boost the total number of jobs created (those that are disclosed by investors) to more than one sixth of the UK total.
The average of the 101 projects in Scotland created 83 jobs, while the average in the UK as a whole created 53.
The report found Scotland’s two main cities were in the top six UK cities for attracting projects, behind London, Manchester and Birmingham. Aberdeen was in eighth equal place.
A clear trend in recent years has been towards major cities being the most powerful magnets for inward investments, with smaller towns that used to do well as manufacturing hubs, having less of a pull.
Quality of life, the pool of available skilled labour and universities are among the factors drawing people to cities.
London remains very dominant in the analysis, with 538 projects attracted. That was nearly half the total.
A weaker sign for Scotland was in attracting companies that had not previously invested in the country. Most of its success comes from existing foreign investors wishing to deepen their presence in the country.
The share of new investors was down to only 6% of the total.
The attractiveness survey suggests that fears of Brexit having the effect of slowing interest in investment in the UK is not to be found.
However, interest from the European Union has weakened, and the USA has strengthened its position as the most active inward investing country for Scotland, with more than a third of projects.
France was next, with nine of the 101 projects, and Russia – with four projects – moved into the top 10 countries investing in Scotland.
The survey found 53% of investors believed Brexit would make the UK less attractive for investment, with 30% saying it would be more attractive. The number seeing it as a risk factor for investment was down to 24%.
Other findings were that manufacturing and sales officers were leaders for attracting new foreign investment, followed by food and drink and business services.
‘Real strength’
Commenting on the report, EY’s managing partner in Scotland, Ally Scott, said: “Scotland has a real strength in the diversity of projects it attracts with a healthy blend between manufacturing and services.
“The boost in manufacturing places Scotland as the UK leader for this sector”.
Scottish Enterprise senior manager Charlie Smith added: “We know that Covid-19 will have an impact on FDI (foreign direct investment) flows, not just for Scotland but for countries across the world.
“However, FDI levels remain stable in Scotland’s priority areas where we excel, such as advanced manufacturing and low-carbon technologies.”
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
