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The renminbi on track for a fourth day of firming against the dollar on Wednesday after China’s central bank once again pushed the currency’s trading band (marginally) stronger. The onshore exchange rate (CNY) for the reniminbi was 0.28 per cent stronger at Rmb6.8855 in afternoon trade, bringing it 0.53 per cent firmer since it last […]

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Sales in Rocket Internet’s portfolio companies rise 30%

Revenues at Rocket Internet rose strongly at its portfolio companies in the first nine months of the year as the German tech group said it was making strides on the “path towards profitability”. Sales at its main companies increased 30.6 per cent to €1.58bn while losses narrowed. Rocket said the adjusted margin for earnings before […]

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Spanish construction rebuilds after market collapse

Property developer Olivier Crambade founded Therus Invest in Madrid in 2004 to build offices and retail space. For five years business went quite well, and Therus developed and sold more than €300m of properties. Then Spain’s economy imploded, taking property with it, and Mr Crambade spent six years tending to Dhamma Energy, a solar energy […]

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Nomura rounds up markets’ biggest misses in 2016

Forecasting markets a year in advance is never easy, but with “year-ahead investment themes” season well underway, Nomura has provided a handy reminder of quite how difficult it is, with an overview of markets’ biggest hits and misses (OK, mostly misses) from the start of 2016. The biggest miss among analysts, according to Nomura’s Sam […]

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RBS falls 2% after failing BoE stress test

Royal Bank of Scotland shares have slipped 2 per cent in early trading this morning, after the state-controlled lender emerged as the biggest loser in the Bank of England’s latest round of annual stress tests. The lender has now given regulators a plan to bulk up its capital levels by cutting costs and selling assets, […]

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Categorized | Financial

Martin Gilbert’s Viennese whirl

Posted on November 30, 2015

Martin Gilbert of Aberdeen Asset Management.©Charlie Bibby/FT

Aberdeen’s Martin Gilbert

Vienna gave birth to the waltz, a gentler dance than the elbow-jabbing jig that Martin Gilbert has been dragged into by Opec meetings in the city. A depressed oil price has put sovereign wealth funds in a spin, and led them to withdraw capital from fund managers — leaving the boss of Aberdeen Asset Management to preside over a dispiriting drop in assets.

Oil has spiralled down in price by 42 per cent in a year, as Saudi Arabia has sought to squeeze out marginal US shale operations. This has left the country, which we should describe as “oil-long” rather than “oil-rich”, with a burgeoning deficit. Saudi sovereign funds, like others worldwide, have thus been draining their money from emerging market investment funds of the kind run by Aberdeen.

    Aberdeen suffered net outflows of £34bn in the year to September — which represented the lion’s share of an overall £41bn fall in assets under management to £283bn. This Friday’s Viennese meeting of Opec is thought unlikely to foreshadow production cuts. That explains Mr Gilbert’s downbeat demeanour on Monday. He expects emerging market funds to go on shrinking, as long as oil remains depressed by maintained output and weakening Asian growth.

    The gravel-voiced investment veteran has managed to keep underlying profits before tax pegging along at £490m by cutting costs, notably at the Scottish Widows Investment Products division that he bought for £650m in 2013. But sales there have been constrained by jitters over regulation.

    Investors feel nervousness of their own about the dividend, which Aberdeen has increased 8.3 per cent this year. The group is left with net cash of £567m, but some £250m is required as regulatory capital, limiting scope for big new acquisitions. It could be “Goodnight Vienna” — as oldies term a wipeout — for progressive payouts unless oil prices recover.