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TABLE OF CONTENT

02 - Campus News

07 - Tech News

-HM Treasury introduces two new FinTech measures

03 - Companies By Sector

08 - Internships & Placements

-The price of oil and what it means for M&A - Bank breach sees money stolent from 20,000 accounts

09 - Markets

05 - Global Economies

-Renminbi touches eight-year low in EM currency rout -Why hard Brexit is Britain’s best option -UK firms show no Brexit vote hit in third quarter as -Insurers must display rival pension annuities investment grows

10 - Business Lifestyle

06 - Global Politics

-Work-life balance is still a dogma?

-Irish Prime Minister says that Brexit’s two years transition period is “impractible” -Hammond Treads Carefully in First Budget -Trump Made History

MEET THE TEAM AHMAD ABOU MERHI

EDITOR-IN-CHIEF 2nd Year, BSc (Hons) Accounting & Finance Welcome to our first edition of The Cass Exposure, the exclusive newspaper of Cass Business School City, University of London. The Cass Exposure (TCE) is a fortnightly campus based business focused newspaper. The lower part of this page introduces you to my peers who took part of the December 2016 issue, this would have been nowhere close to being possible without the efforts of every member of this team. A quick introduction of myself, I am a second year BSc (Hons) Accounting & Finance student at Cass Business School and an incoming finance analyst summer intern at JPMorgan Chase & Co. With Cass Business School set to be the home of my ongoing undergraduate degree, and hopefully a sequent postgraduate degree in Shipping Trade & Finance, I want to make as much of an impact on campus as possible. Something sexy, something noisy. It was time for a project with a long term scope that delivers academic and professional benefits to the Cass students, alongside bringing together a team of keen and passionate contributors of different interests and expertise to collaborate in the hope of delivering an outcome which is much more valuable than the sum of our workings. Our main aim is to deliver a newspaper that offers you analysis of different headlines from across the business world, delivering it in a straight-forward yet juicy approach to ensure you stay up to date with the real world through a complete understanding of the content.

We are very grateful that we received massive support from academics on campus, of whom some contributed directly and others supported in the dark. Likewise, I want to send a huge thank you to all The Cass Exposure team for making this a reality. Thank you for taking part of this journey. Good luck in your January Examinations and we will be on campus again right after that.

OMAR BARAKA DEPUTY EDITOR 3rd Year, BSc (Hons) Business Studies

ALESSANDRA ORLANDO BUSINESS LIFESTYLE EDITOR Part-Time EMBA Student

JULIA MILET DEPUTY EDITOR 3rd Year, BA (Hons) Journalism

EDOUARD D’ESPALUNGUE D’ARROS GLOBAL POLITICS EDITOR MSc Corporate Finance

DR. VALERIYA VITKOVA GUEST CONTRIBUTOR Research Fellow at the M&A Research Centre MR. CARLOS RIBEIRO GUEST CONTRIBUTOR Visiting Lecturer - Quantitative Methods & Accounting

MUSTAFA DAUD INTERNSHIPS & PLACEMENTS EDITOR 2nd Year, BSc (Hons) Accounting & Finance SHRISTI GURUNG CAMPUS NEWS EDITOR 2nd Year, BSc (Hons) Accounting & Finance

JAD BENNANI SENIOR ADVISOR 3rd Year, BSc (Hons) Business Studies

ARINA TERPUGOVA WRITER 2nd Year, BSc (Hons) Investment & Financial Risk Management

SAMITA BATHIJA GLOBAL ECONOMIES EDITOR 3rd Year, BSc Economics

ERIDONA DURIÇI WRITER 2nd Year, BSc (Hons) Accounting & Finance

THOMAS HARBOTTLE TECH NEWS EDITOR 2nd Year, BSc (Hons) Accounting & Finance

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SARAH HAMPTON WRITER 2nd Year, BSc (Hons) Investment & Financial Risk Management SHAKHLO MURADOVA WRITER 2nd Year, BSc (Hons) Investment & Financial Risk Management TEMIRLAN TILESHEV WRITER 2nd Year, BSc (Hons) Investment & Financial Risk Management HENRY WATSON

WRITER 1st Year, BSc Economics


CAMPUS NEWS Work Placement and Summer Internship Fair BY ERIDONA DURICI To facilitate this challenging period of internships and placements applications for their students, the Cass Undergraduate Placement Office held a professional fair on the 26th of October 2016. This was a fantastic opportunity for all students to meet their prospective employers and gain firsthand knowledge on particular industries of their interest. Cass students also got a chance to meet and network with current placement students who provided valuable insights and feedback regarding their respective positions at each of the participating firms, allowing students to evaluate factors way beyond those advertised.

The fair witnessed the participation of 30 well- This is not the first time that Cass Business School known corporations which are listed below: hosts such events, which means students who were not able to take part of it do get the chance every Accenture, AXA Investment Managers, Bloomberg, October. Capita Asset Management, Cash and Cheque Company, Cooper Paul, Deloitte, Enterprise Rent-a-Car, EY, Goldman Sachs, GP Labs, HSBC, IBM,Intuit, Lloyds Banking Group, Markel International, Mazars, Medallia Ltd, Moore Stephens, PwC, QBE, RateMyPlacement, Renault Group, RWC Partners, Sanctuary Graduates, State Street, UBP, UBS, Warner Bros.

During the fair, career consultants hosted a quick The fair consisted of firms ranging from big corpo- 5-minute drop-in session for students and conrations to small medium enterprise (SME) operat- ducted CV checks and 1-to-1 talks offering advice ing in a wide range of sectors including accounting, regarding the application process as a whole. actuarial, banking, HR, finance, marketing and business consultancy.

Cass Consultancy Society: “Banking Vs Consulting Vs Entrepreneurship: The outspoken truth.” BY ERIDONA DURICI On Wednesday afternoon, 23rd of November, the Cass Consultancy Society ing at all. He elaborated: “Do not go into a job to get money, go into a job held the biggest event of the year under the title of “Banking Vs Consulting for non-financial reasons, go into a job to learn something, go into a job to Vs Entrepreneurship: The outspoken truth.” achieve something, go into a job to meet people.” Successful Bankers, Consultants and Entrepreneurs were part of a challenging and provocative panel discussion representing the industry they were most passionate about. The audience was formed of Cass and non-Cass students, Cass alumni, and professionals who summed up to a full room of 180 people.

Another important point discussed, was Financial rewards versus Risk. All the panellists agreed that entrepreneurship is not for everyone. Alongside, Mr. Cohen added that entrepreneurship requires willing to take risk, even as extreme as being broke at the age of 45 while your corporate friends are making good money with their job. Mrs. Li, founder and CEO of Blooming In the beginning of the evening, the President of the Cass Consultancy So- Founder, suggested that failing should not stop people from reaching their ciety and one of The Cass Exposure’s very own senior members, Jad Bennani, goal and people should consider failure as a learning curve. announced that the society has expanded to 43 members, compared to 8, one and a half year ago. He also stated that “their mission is to become the best The debate was followed up by a very interactive Q&A session where spectastudent led society in London by focusing on students and continuing to de- tors got an opportunity to raise questions to the panel in loud before taking it liver unique events”. to a 1-to-1 basis over drinks. and later on by networking session and drinks. The debate covered several points. Initially, the moderator raised the fact that many bankers and consultants consider work as boring and repetitive. Likewise, they considered working in Canary Wharf as depressing. This paved way for the panel to discuss the importance of loving what you do for living and how your career must be well beyond sole monetary factors. Mr. Chouguley, a banker, argued that his job is his passion due to its direct impact on people and its importance in protecting customers. In addition to that, Mrs. Tattum, an ex consultant and now a business owner, suggested that “there are lots of positions people could try; not every experience is great but you need to know why you are doing it and love the process.” On the other hand, Mr. Cohen, CEO and founder of Virtually Reality, suggested that if you chose the right thing you will feel like you are not work2


COMPANIES BY SECTOR There will be blood: The price of oil and what it means for M&A. BY DR. VALERIYA VITKOVA What does the fall in the oil price mean for M&A in the sector? A key question for analysts, investors, governments and oil company executives. The M&A Research Centre (MARC) at Cass Business School, provides insights. Our study takes a statistical approach to the question, which cuts through the newspaper headlines and editorial suppositions to see what really drives M&A in the space. The power of this type of approach has already been seen in academic work that challenges the prevailing theory that OPEC’s production comments of November 2014 were a major oil price driver and showed that half the H2 2014 fall in the oil price was predictable based on the public information available at the time. This is the spirit in which this research was undertaken. The data is based on M&A activity over the last twelve years. And unlike most studies in the financial community we have put no threshold on deal size and look at multiple factors simultaneously rather than the usual linear analysis using simple economic factors. The model obtained has a very satisfactory predictive quality. This model was able to explain 58.4% of M&A activity in the sector. One minute summary of our analysis: It’s never just about one simple factor and no model is perfect. The oil price has more than halved since 2013 and M&A activity has most definitely not. Indeed, we have seen an $84bn deal in the majors and the proposed merger of the #2 and #3 global Oil Services firms. The oil sector is unusual in that M&A activity does not show the correlation with economic activity that the broader market does. The best model we found involves the valuation of the sector and the US 5-year treasury yield as well as the oil price itself. Given the uncertainties around the oil price we do not enumerate a

The need to do deals

point forecast for M&A but have three flex scenarios for different oil price, economic and market outcomes. Some scenarios do imply more M&A than others. The scenario with the greatest number of deals, according to our model, would be a rapid recovery of the oil price to US$70-75/ bbl. But the window would be short, with a pullback in activity soon after. M&A is a necessity...unless you want to be running a much smaller business. Recoverable oil reserves are growing but in ever more inaccessible places, both geographically and politically. M&A is needed to simply maintain production levels or to bring down break even oil price levels through cost synergies. But for some stakeholders, notably your shareholders, is being a smaller business necessarily a bad thing? The market’s reaction to recent acquisitions says it isn’t.

The first of these drivers is that while new oil reserves are being discovered, they are either in locations where recovery is difficult and expensive (we would highlight Shell pulling out of the Arctic) or where state-owned oil companies are no longer giving full access to western oil firms (Venezuela, Saudi Arabia, etc). We would again flag the high break evens of ultra deep-water, shale and oil sands projects, above the current oil price. Reserve expansion is stated as the main rational behind the $84bn Shell/BG deal announced in April 2015. In an interview given to the FT partly to justify the 54% premium paid Ben van Beurden, CEO of Shell, highlighted two main points: (i) the transaction will accelerate the growth of its gas portfolio, but (ii) also increase its deep-waters portfoBe prepared, but don’t rush. The mes- lio. The deal allows Shell to increase sage that M&A isn’t going to dry up its reserves by 25%, production by given the oil price drop means that 20% and cash flow by just +15%. corporates always need to be prepared to deal with approaches by potential The acquisition of Talisman by Repbidders. Perhaps more constructively sol in December 2014 for $13bn the place to be is to have a strong bal- seems to have been made with simance sheet, and able to acquire either ilar goals in mind. It is described by distressed assets (sector indebtedness Repsol as ‘a strategic combination to has substantially increased in the last accelerate growth, diversify the asten years) or those from forced sellers set base and drive shareholder value’, after their own mergers. Indeed, given with nothing about costs on the main concerns around commodity linked slide. The deal was done at a 67% debt (Glencore etc) we looked at high premium and unlike Shell/BG after yield spreads as a potential model in- the fall in the oil price, was 100% in put anticipating one of the potential cash. With both acquirers in these criticisms of our forecasting model deals subsequently underperforming (that there is no input considering there are clear concerns that compaUS High Yield spreads, traditionally nies will make acquisitions to avoid a relevant indicator for Private Equity the natural business shrinkage highand M&A). However, the regressions lighted at the start of this section. conducted could not find evidence The second driver is the price of oil. that US high yield spreads explain If the oil price isn’t going to come Oil & Gas M&A better than the Govt. down, then those break evens are Bond yield for the period considered. going to have to come down. Some of the needed cost reductions will Oil companies are being pushed come through greater efficiencies as towards M&A for two main rea- the supply chain works out the fat sons. The first is a long term is- built up in the $100/bbl days. Howsue, the second is a short term is- ever, an obvious way to save costs sue that may become long-term. is by acquisition, with the resulting removal of head office costs, dupli3

cate costs, greater negotiating power with suppliers, etc. We have seen deals driven by this logic on the Oil Services side with November 2014’s announcement of the proposed takeover of Baker Hughes by Halliburton with a targeted $2bn of cost savings. Can they do deals? So the companies need to do deals, whether for economic or ‘strategic reasons. But can they do such deals? Companies looking to make acquisitions are in a tricky spot. Do they issue equity, which has its advantages and disadvantages? If they issue stock, then they are removing some of the risk of a further fall in the oil price post deal announcement. However, the target shareholders might want cash given oil price uncertainty while the acquiring shareholders may feel they are ‘selling at the bottom’ given the sector and oil price weakness. And if we consider the alternative, cash, then not only do we face the short term fear of the markets around levered commodity driven companies (see Glencore) but also more structurally, the sector’s indebtedness becoming stretched. The comparison of the indebtedness from the indices representing the Oil sector (Bloomberg World Equity Oil Index) and the equity market (Bloomberg World Equity Index) show that oil sector debt levels have substantially increased in the last 10 years, accelerating in 2014 and 2015 due to the fall of the oil price and reaching a twelve year high in 2015. The indebtedness levels of the global equity market index are clearly inferior to those of the Oil Index, but given that sectors can have very different risk and business profiles the direction of travel is key, and that definitely does not favour the Oil sector.


COMPANIES BY SECTOR A shrinking production base, with a falling commodity price, does not suggest a sensible time to increase leverage. Hence the best placed buyers will be those with strong balance sheets, or relatively resilient share prices, ready to buy the assets of indebted sellers or forced sellers (In both cases initial oil price wave M&A like Shell/BG will put many assets on the market). Given the uncertainties around the global economy and the oil price it may be considered foolhardy to forecast M&A activity. However, by setting out various scenarios for the oil price we can allow the reader to choose the one they most favour. We also believe that the modelling of the outcomes as a process will itself lead to insights about industry drivers. A model to predict number of deals was constructed. Looking back into the analysis of the key factors, it was identified that the strongest relationships were with the Oil price and Mkt Cap (P/E for Global M&A) but we assessed again the interaction with other variables as Gov. Bond Yield. We also added net debt/EBITDA to the variables, given the fact that some of the deals seen included companies that were in a difficult financial situation, largely related to the

fall in the oil price and the increase price has hung like a shadow over the of the investment effort required in industry. However not all of the inan attempt to maintain production. dustry is suffering. The low oil price has been positive for downstream This model was able to explain 58.4% refining assets where demand is imof the evolution of the number of proving and crack spreads (the key deals for the period under consid- driver of refining margins) are high. eration, 2Q’03 to 2Q’15. This level is We have observed a high number enough for our purpose: understand of deals in Downstream in the first how the number of deals for Oil & two quarters of 2015. This outcome Gas M&A should react to our dif- contrasts with the low number of ferent scenarios for the independent deals in Oil & Gas M&A for 1Q’15. variables, taking into account how these independent variables influ- There will be opportunities enced the M&A number of deals in the past for the period includ- Monitor those oil companies that did ed in our model (2Q’03 to 2Q’15). big transactions before or during the fall of the oil price. For example, RepConclusions: sol has increased its net debt levels to 2.7x net debt/EBITDA and is eager It’s complicated... to sell non-core assets. Shell has also announced $30bn of disposals in the The analysis in this report shows that next two to three years. This type of M&A activity in the Oil & Gas space sale should involve much lower preis not simple in terms of drivers. It miums than the deals that themselves doesn’t follow the usual economic triggered the disposals. The sellers are activity indicators and doesn’t even eager to sell and reduce debt after the have the relationship with market acquisitions, and there will be no conmultiples that the broader market has. trol premium. The risks of over paying We have seen that multiple inputs are are mainly linked to the ease of earnneeded to come up with an adequate ings (rather than value) accretion in predictive model but the results in an extreme low interest rate environterms of regression are encouraging. ment. However, the recent commodiThroughout this report the falling oil ty price linked debt fears should limit

the number and appetite of bidders. But there will be blood Finally, the fact that there are differences between the relationships observed between the variables depending on whether you look at the number of deals, or the volume (value) of deals, is not something to be glossed over. While our model predicts that a sharply falling oil price will lead to a fall in the number of deals look at the deals that are happening right now, whether its RDS/BG or the #2 and #3 Oil services companies merging. These are not bolt-on deals. Some CEO’s will always see dislocation as a time to act. Qualitative factors are often viewed as being as important as quantitative ones. If big deals happened in the sector, defensive moves can follow like dominos falling even if the conditions are not ideal. This is the reason why it is always critical to have defensive tactics prepared.

“Bank Breach Sees Money Stolen From 20,000 Accounts” - Forbes Website 7/11/16 BY ARINA TERPUGOVA What’s Going on Here? In the beginning of November around £2.5m were stolen from current account holders of Tesco Bank by 40,000 transactions made by fraudsters. What Does This Mean? The bank confirmed that less than half of transactions actually had fund withdrawing nature and the amounts stolen were relatively small in size. Tesco said that the customers will get the money back into the accounts, but this will take some time. Furthermore, the bank froze most of the current accounts in order to prevent any further The investigation was immediately initiated however not much information was obtained. “Hacking” – that’s what the bank calls it so far. Later, the bank said that more likely the fraudsters stole the

credit card information rather than gained it from inside the system. Many experts later suggested that the main cause was the card readers given to customers by Tesco when issuing the cards or the vulnerability if its app and the IT system. The bank said that security measures have been put in place, which require the customers to enter their unique security code and confirm those using text messages sent by the bank when making online banking transactions. Why Should I Care? The Tesco case is only an example of how vulnerable the online banking system of any major bank could be if the customers are not extremely cautious. Nowadays, our lives are dominated by smartphones and internet, meaning that literally all of everyday transactions can be made via 4

smartphone apps within seconds. The web is not only convenient for people, but also extremely attractive for fraudsters. By spending extra seconds and paying little more attention while making online transactions could save your money.


GLOBAL ECONOMIES

Why a hard Brexit is Britain’s best option BY HENRY WATSON After voting to leave the EU in June this year, the UK is now faced with a long and treacherous task of securing a deal with the EU once triggering article 50, which is planned for April 2017. In the 6 months since voting to leave, two options have emerged: a hard Brexit and a soft Brexit. A hard Brexit would involve the UK’s complete departure from the European Economic Area (EEA) and the EU customs union. This would mean that the UK would no longer be able to benefit from the single market tariff requiring the country to nego-

tiate new trade agreements with the EU, similar to the current situation of the Unites States or Australia. The difficulty that arises in the face of the United Kingdom is the fact that it has weaker negotiating powers than the EU as a whole. Anyhow, this may not be the case due to the EU’s strongest economic power, Germany, being the UK’s second biggest trading partner with an estimate of $31bn of UK imports to Germany, on the reverse lane of the UK importing 20% of all cars produced in the German country. Many countries benefit from trading with the UK and therefore there is no rea-

son a hard Brexit would make them reconsider. A soft Brexit would involve the UK remaining part of the EEA and customs union as well as retaining the four freedoms. This would be like the Norway model with the UK remaining an active member of the EEA and abiding by much of EU with the exceptions of some fishing and agriculture policy. However, the UK would still abide by the EU law despite having no say in any of its matters, in addition to paying membership fees to maintain their participation in the EEA.

“UK firms show no Brexit vote hit in third quarter as investment grows” - Reuters 25/11/16 BY ARINA TERPUGOVA Whats Going on Here? ish financial minister, announced his plans of bor- ing inflation pressure and political instability. rowing $29 bn to invest into housing, transport and The fear of shrinking British economy after Brex- digital infrastructure over the next couple of years. Why Should I Care? it has been «brushed off» as most British companies increase their investment. In fact, household The weakened pound accelerated the growth of UK The economic growth is known to bring benexpenditure increased by 0.9%, which alongside exports in the third quarter, resulting in a net trade efits such as lower unemployment, greatpositive net trade, contributed towards econom- increase of 0.7% points, the highest positive figure er income, and an overall welfare. Betic growth. Despite many countries believing that since 2014. As stated previously, the UK witnessed ter trade means more overseas products to British economy will be largely affected by Brex- similar increase of household spending by 0.7% come to the UK and greater exports means more it, GDP increased by 0.5% in the third quarter. as well, which also contributed towards econom- jobs created and higher money inflow. The inic growth. However, this might be a warning of creased investment in infrastructure and housWhat Does This Mean? «dreadful» wage growth, meaning that consumers ing means better living standards and mobility. have not adjusted their income to rising inflation. Despite the advantages of sustainable growth in Tech giants Facebook and Google and carmaker the UK, higher GDP almost always means inNissan committed to invest largely after the ref- The above led to, higher investment, greater ex- flation, and with a weakened pound, the real erendum, playing a recognisable role in driving the ports, as well as increased consumption result- income of households are actually lower than economic growth. However, weakened pound and ed in unexpected post-Brexit increase in eco- seen by the citizens, as they are not yet adjusting rising inflation seem to drop the investment rate nomic growth. Yet, the experts are concerned their income to the changing economic factors. of smaller businesses. In order to offset the decline that the UK economy cannot sustain the pace of in private investment, Philip Hammond, the Brit- growth in the fourth quarter because of increas5


GLOBAL POLITICS Irish Prime Minister says that Brexit’s two years transition period is “impracticable” BY TEMIRLAN TILESHEV Earlier this year the UK decided to leave the EU and negotiation process was estimated to be two years long. However, Enda Kenny, the “Taoiseach” (Irish prime minister), said that it will be “impracticable” to manage Brexit within two years. So far this is the strongest statement made by a european leader about the UK’s negotiation timetable.

cians are considering that Britain should postpone triggering Article 50 until next year’s elections in Germany and France. At the same time, UK election is due to 2020 and the governor of the Bank of England, Mark Carney, claimed that he will leave his position in mid-2019, which means that Brexit should occur by 2019. Furthermore, Guy Verhofstadt, The European Parliament’s head negotiator, said that Brexit should occur before next parliamentary elections in May or June of 2019. “I can’t imagine we start the next legislative cycle without agreement over UK withdrawal,” he said.

Enda Kenny, who supports Brexit, said: “there’s a growing feeling in Europe that there should be a transition period, and that the transition period will be longer than those two years — I think it will be.”

Earlier, Joseph Muscat, Malta’s prime minister implied that UK’s leaving process might be delayed at the end. He said: “It will get complicated. Divorces Therefore, the UK will experience fundamental legislation changes in the are never easy, I think”. next few years, which might lead to uncertainty about Britain’s future in the short-term among the population. However, in the long-term it will faUK’s prime minister, Theresa May, has been criticised by Brexiters, who think cilitate further benefits at a much quicker pace than previously predicted. that Britain should abnegate Article 50. In addition, some pro-EU politi-

Hammond Treads Carefully in First Budget BY SARAH HAMPTON Chancellor of the Exchequer Phillip Hammond’s first major statement suggests a pragmatic and self-possessed approach to the UK’s fiscal policy whilst uncertainty looms over the future of Britain.

For the seventh year in a row the government has cancelled the rise in fuel duty, saving the average driver an estimated £130 a year. Letting agents’ fees are to be banned for millions of tenants, with the insistence that they should be paid by the landWhat does this mean for us? lord alone. However, it remains to be seen whether the costs will be passed back to tenants via highReflecting the reality of the economic situation the er rents. Further in property, London is set to reUK now faces, former Chancellor George Osborne’s ceive £3.15 billion over the next five years with goal of achieving a budget surplus by 2020 has been the aim of building 90,000 affordable homes. This abandoned in favor of more reasonable aims. Wel- should aid in dampening soaring housing costs. fare spending has been capped and an extra year of austerity policy has been added to the Conserva- The big picture tive Government’s timeline, with the current freeze on public spending being extended until 2021-22. Already in their sixth year of spending cuts, public services face a gloomy future after it was announced To counteract the predicted slowdown of private that they would receive no budget increase until sector investment, Mr. Hammond has planned 2020. With social care cuts putting pressure on to borrow an extra £23 billion over the next five services, one wonders how the already squeezed years to be invested in infrastructure and in- public sector will continue to cope. Hammond novation. This takes total government borrow- aims to grow British productivity by investing £1.2 ing for the period to the sum of £122 billion. billion in road and rail in order to prevent productivity being hampered by poor infrastructure. Whilst interest rates have dwindled, savers have lost out. Counteracting this is the new Nation- Responding to calls for more rental housing and al Savings and Investments Bond that will pay affordable homes to buy, the Chancellor’s state2.2%, with contributions capped at £3,000. ment has received a positive reception from the Royal Institute of Chartered Surveyors. This 6

includes a £2.3 billion housing infrastructure fund, £1.4 billion going towards the construction of 400,000 homes and a pilot of a new ‘right to buy’ scheme for housing association tenants.


GLOBAL POLITICS Donald Trump made History: an analysis of his first speech as President of the United States BY EDOUARD D’ESPALUNGUE Hillary Clinton has fallen at 2.22am on 9th November, 2016. In the run for the White House, she failed to win crucial swing states such as Pennsylvania, Michigan, Iowa, Wisconsin and Florida that eventually voted for the GOP candidate. Most polls in the medias (e.g. Huffington Post, New York Times) had predicted a big success for the wife of Bill Clinton and ex-67th United States Secretary of State.

The “Bill, Hillary & Chelsea Clinton Foundation”, its speeches to Wall Street firms and its links to rogue states such as Saudi Arabia as well as the email controversy that wound up with an accusation of being “ extremely careless in their handling of very sensitive, highly classified information “ : all these scandals paved the way to her defeat. Donald Trump, now 45th president-elect of the United States, celebrated his triumph (306 electoral votes vs 232 for Clinton) alongside his Vice-President Mike Pence, family, and staff and began his victory speech with a warm attention to Mrs. Clinton and then addressed different topics that we can wrap up in a few words: one-nationism, supporters, economic plan, and international relations. It is quite interesting to watch Trump claiming: “To all Republicans and Democrats and Independants across this nation I say it’s time for us to come together as one united people. I pledge to every citizens that I will be the president for all Americans and this is so important to me [..]”. When Donald Trump said “one united people”, he raised a point also highlighted by Theresa May in

her post-Brexit speech (13/07/2016) and that related to social fabric: “Because not everybody knows this, but the full title of my party is the Conservative and Unionist Party. And that word ‘Unionist’ is very important to me. It means we believe in the Union [..] not just between the nations of the United Kingdom, but between all of our citizens. Every one of us, whoever we are, and wherever we’re from.” This constant reminder, after the Brexit or after the election of Donald Trump, of the need to stand together, whatever your background, echoes this new trend within Conservatives: social fabric is key to “make a country great again” and Mr. Trump understood that America needs to do more to become a united nation. Overall, Trump made a great and powerful speech and the massive success that he got in the 2016 US General Elections sets apart his striking performance in comparison with Mitt Romney in 2012 or John McCain in 2008.

TECH NEWS HM Treasury Introduces Two New FinTech Measures BY THOMAS HARBOTTLE Following on from the Autumn Statement, Silicon Roundabout announced it would deliver two of HM Treasury’s measures to ensure that the UK stays at the forefront of the FinTech industry as a world leading hub. The two measures announced include a FinTech delivery panel and a FinTech professional services hub. What the FinTech delivery panel aims to achieve is to drive FinTech specific policy recommendations. The panel will be led by and stand for the entire FinTech community. A broad FinTech community will contribute more diverse suggestions and ideas to the main panel, as well as producing the initiatives, where members wish to do so. Eileen Burbidge MBE will be the chair of the panel as she is both the HM Treasury Special Envoy for FinTech and Chair of Tech City UK (Silicon Roundabout). Also, joining the panel will be other existing initiatives including the Financial Services Trade and Investment Board, the FinTech Network Action Group led by Innovate Finance and others. The first convening session should take place in February 2017. FinTech Professional Services Hub will help business source appropriate accountancy or legal services for example, with the goal to lower the barrier of entry for the FinTech industry, overall increasing competition. Exact timings and structure of the hub will be announced when the initial discovery phase is complete. In 2015 the UK FinTech industry generated £6.6bn in revenue and employed more than 60,000 people which is more than Singapore, Hong Kong and Australia put together.

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INTERNSHIPS & PLACEMENTS BY MUSTAFA DAUD

It is that time of year again where students are considering what steps to take in regards to their future careers. As part of The Cass Exposure, this section will be providing information on the importance of gaining work experience as well as the different opportunities in terms of work placements and internships that are available for Cass students. In addition, I will be offering personal tips regarding these topics and any upcoming deadlines for certain placements and internships. Currently, with a highly competitive jobs market, gaining work experience nowadays is crucial. A recent survey conducted by Highfliers Research – an innovative firm at the ‘forefront of graduate recruitment research’- analysed the Graduates Market in the last year demonstrating the increased emphasis being placed upon work experience. According to their study, out of the UK’s 100 most successful employers, approximately 50% of those employers suggested graduates who obtained no form of work experience ‘had little or no chance’ of gaining a place on their graduate-based programmes. Furthermore, greater levels of importance have been placed by investment banking firms and Accountancy firms. Gaining work experience is seen by employers as concrete evidence demonstrating a candidate’s willingness to develop their commercial awareness as well as taking the initiative to show employers of their interest in the particular field. Thus, allowing them to stand out as a more attractive candidate in comparison to those who have gained no work experience. Having a strong academic background is no longer sufficient. Being a student who has gained a portfolio of work experiences is just as valuable to employers. At Cass, this is why our degrees are tailor made providing students with the best platform to kick-start their careers with numerous work placement and internship opportunities available Below on the right is a table of companies offering work placements, internships or both. Also included are deadlines. Check company website for varying deadlines for different types of placements and/or internships. Make sure to contact the Cass Undergraduate Placements office at cass-ug-placements@city.ac.uk to benefit from news and updates regarding new opportunities and upcoming deadlines for various work placements and internships.

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Personal Tips 1. Revise any specialist knowledge Interviewers have an infamous ‘7 second rule’ where they build an opinion of a candidate in the first 7 seconds. Demonstrating your knowledge relating your to your field with the correct terminology allows you to control the way your potential employer develop their opinion of you. 2. Practice aptitude tests early Early exposure to these various tests allows students to become comfortable as different companies use various types of tests (e.g. Verbal reasoning, situational judgment and numerical reasoning).

Company

Areas

Deadlines

EY

Assurance, Taxation, Consultancy

Ongoing

PwC

Deloitte

Grant Thornton Moore Stephens

Assurance, Taxation, Consultancy, Technology Audit & Finance, Taxation, Technology

Ongoing

Audit, Advisory, Technology

Ongoing

Corporate Audit

4-Dec-2016

Morgan Stanley IBM

Ongoing

14-Dec-2016

Finance

31-Dec-2016


MARKETS

“Insurers must display rival pension annuities” - BBC Website 25/11/16 BY MR. CARLOS RIBEIRO Upon retirement, employees who have been saving through a company or personal pension fund, have six options regarding what to do with their money, one of which is buying an annuity, which will give the pensioner a guaranteed income for life (perpetuity) or for a fixed number of years.

annuity from the 6h of April, 2015 was a significant shock to an industry that although competitive between the different players in the sector, effectively enjoyed a monopoly. In the 12 months following the implementation of this change, annuity sales were down to £4.2bn, again according the ABI.

Annuities can be bought with an insurance company through an open/competitive market where the buyer can compare rates and choose which annuity to buy. According to the Association of British Insurersvvv v (ABI), in 2013, 353,000 annuities worth £11.9bn were sold, which gives a good indication of the significant size of this market.

As with other financial products, a number of issues regarding mis-selling and comparability of products from different providers have been raised and the Financial Conduct Authority (FCA) has conducted a review of all annuity sales in the UK since 2008. This study has now concluded that “four out of five annuity buyers could get a better deal” and as a consequence annuity sellers will be required, from September 2017, to show quote comparisons. This should ensure annuity buyers will have the full information to make the best decision when investing their pension pot.

Buyers have different types of annuities to choose from, including standard level, impaired life or enhanced, investment linked, index linked or escalating and variable annuities and until as recently as April 2015, buying an annuity on retirement was compulsory. The decision by the Chancellor in the 2014 budget to allow retirees the freedom to manage their own retirement fund instead of forcing the purchase of an

“Renminbi touches eight-year low in EM currency rout.” - FT Website 24/11/16 BY SHAKHLO MURADOVA

After the election results, emerging markets started suffering from president Trump’s political agenda. Looking forward to the Federal Reserve’s December meeting, investors are already expecting the fiscal stimulus effects, withdrawing all the capital from the emerging markets, thus sending their currencies down to the weakest level. Among the suffering EM currencies, Chinese renminbi went to a record low level of the past eight years, depreciating to Rmb 6.9023 to the dollar. The Indian rupee has been suffering the consequences of the new PM’s strategy against the corruption by removing all the high-value bank notes reaching Rs 68.8600 against the dollar. Philippine and Mexico’s pesos are down as well, reaching 50 and 20.7303 pesos per dollar respectively. Malaysia’s ringgit and Turkish lira are at their weakest point, with the lat-

ter struggling in the face of high interest rates. In addition to that, despite an overall Japanese economic growth of 2.2% in the third quarter, the Yen failed to keep up with the American Dollar as well. All stakeholders are looking forward to the upcoming meeting of the Federal Reserve from a side, and the EM governments’ response to this stimulation from another. This is not a rare sight of currency depreciation. A similar encounter occurred in the late days of 2014 when the Russian Ruble reached 73.2 per American Dollar.Overall the Russian currency lost value, dropping by almost 40% due to Western sanction. This lead the Russian economy to witness a drop in income triggered by dropping oil prices, which resembles the economy’s major source of income.

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One of the main implications of the current currency depreciation against the USD is that imports become more expensive, which has a direct effect on our daily expenditure on necessities and luxuries. If the country is import-based, this will also heavily influence the government budget. This indicates that emerging markets will witness different encounters and it will be in the respective authorities’ hands to develop the suitable and effective policies to offset any negative aftermaths. Apart from global economies, this has a direct effect on parties that have a recognisable proportion of their expenditure across borders. Whether it is a global corporation recognising revenues from overseas or international students settling their tuition fees, the depreciation of the EM currencies decreases the value of one’s real income.


BUSINESS LIFESTYLE

Work-life balance is still a dogma? BY ALESSANDRA ORLANDO In certain environments, the work-only culture is especially pronounced and employees face conflicting forces: they understand that their work-life balance will improve their well-being, but they also know that it could impact their career progression negatively. Most executives routinely work 12 to 15-hour days, six or seven days a week. Few of them are conscious that productivity is not linear and after about 40 hours a week fatigue related mistakes must be taken into account. Researches have also demonstrated that working more than 11 hours a day can cause depressive disease and cognitive loss in terms of problem-solving, reasoning and creativity. It seems that companies are not aware of the consequences of an unbalanced work-life ratio because the damages are invisible. A first step to reconcile work with life balance is to accept that thinking is a physical activity, performed by the brain and like every organ, has a limited capacity. We can see machinery breakdown, we notice broken arms and legs. But we do not see “broken” minds, until it is too late. When it happens we tend to search for antidotes, like mindfulness, resilience training or other extravagant techniques which more often than not are a temporary cure to the symptoms, but not the root cause Time spent on non-work activities is still a dogma in most organizations and can become a real discrimination when female employees take time for caring for children. In the UK, for example, more than three-quarters of new mothers experience negative treatment, according to the Equality and Human Rights Commission. Many women who move to part-time or flexible working arrangements face the uncertainty in terms of career development.

provision of childcare benefits or services, proIn Italy, the trend is more alarming because women vision of leave to meet family needs and ormore often quit their jobs to take care of family re- ganisational understanding and support. sponsibilities and look after their children. In 2014, out of a total of 24,319 resignations, 85% (22,480) When applied the effects of flexible work arof them were working mothers (Annual Report, rangements enhance job satisfaction and emItalian Ministry of Welfare). The current picture ployee morale and organisational citizenshows that we are still far from equality between ship behaviour, reducing absenteeism and the sexs. Women’s and mothers’ rights will not be turnover and increasing firm-level performance. enough to change organizations’ culture and the “male approach” to women employees trying to Health and wellbeing programmes as child care hardly match work aspirations with family dream. services have been extensively provided by contemporary organisations with aims of increasing The facts above clearly highlighted that “Work Life employee health and chances of organisational Balance” is still a controversial issue in organiza- success. For example in Technogym, the Italian tions worldwide and affects employees regardless company leader in the wellness sector, the work enof gender, family status and professional hierarchy. vironment is based on three fundamental factors: positive approach, physical training and healthy Interrelationship between employee, health, well- food. The company culture is embedded in the being and Work Life Balance have been extensively Technogym Village that hosts their headquarters, investigated in existing literature and the common the offices, the production plants, a library, a wellresult is that employees’ ability to achieve ‘Work ness center and a restaurant serving no fat dishes Life Balance’ plays a central role in attaining work- made with fresh raw materials. This is an example place health and wellbeing. The question of how to of an organization with a special focus on people manage Work Life Balance remains a challenging and their wellness. Rethinking workplaces and a issue for both individuals and organizations. In new path of employer-employee interaction would fact, we cannot analyze health, wellbeing and Work bring disease prevention and cost-reduction from Life Balance only at an individual level. Nor is it lower absenteeism and higher retention rates. adequate to use organizational Work Life Balance policies and programs alone, but it is important to At the end challenging a dogma is not so impossible! consider the interaction between individual strategies and organizational Work Life Balance policies, and their effects on employee health and wellbeing. Organisations can implement five distinctive groups of Work Life Balance programmes and policies: flexible working arrangements, provision of health and wellbeing programmes, 10


The Cass Exposure December 2016  

The first edition of The Cass Exposure, the exclusive newspaper of Cass Business School London.

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