One of the world’s largest toothpaste making companies reported a loss in sales and blames it on the country of Venezuela.

While accounting the second quarter results, Colgate-Palmolive showed a net income of $603 million but the worldwide sales of $3.8 billion were disappointing. Even though this figure is a 2% increase from last year’s figure, the estimates prepared by the company’s analysts were around $3.9 billion.

Venezuela Blamed

They have principally blamed this on Venezuela’s continued hyper-inflation and devaluation of the Bolivar. Sales in that country are expected to reduce yearly worldwide sales by 10 to 15%. But it has also been speculated that blaming a country for their loss is just a redundant excuse cooked up by American companies. However, the concerns over the consumer products market in the country are rising. This is due to the reason that companies like Proctor and Gamble, Avon and Colgate saw an opportunity to match the prices due to hyper-inflation and have been building up a noteworthy presence there, also taking advantage of the currency’s formerly fixed dollar exchange rate.

Bolivar Devalued

All this turned upside down when Venezuelan President Hugo Chavez devalued the Bolivar by 50% and announced a two-level system for imported items. This method values items considered essential- like food and medicines- at 2.6 bolivars per USD and other supplementary products were evaluated at 4.6 bolivars per USD. Thus consumer products companies started to feel the pinch after this system and also due to the high inflation rate of 31.3%.

Interesting turn of events…isn’t it?

Research firm, Markit Economics compiled the latest International business Outlook Survey, on behalf of KPMG; and the results are attention-grabbing.

Irish confidence flying high

Business leaders in Ireland emerged more confident of the bright future of services sector in the country than in other places in European Union. Reactions about Irish business activity in the services sector is running at +47.9, which is quite ahead of the EU averages standing at 33.6 and global averages of 43.9. There are prospects of growth of new businesses and sales in both the services and manufacturing sectors in the next year, but the services sector is expected to grow better. There could be some increase in the employments also. This is a good indication because it is indicative of expansion of economy, which is a good sign of recovery; and this has shown plausibility on a yearly basis only after 2006.

Government to support innovation

Local recovery has been an issue bogging many minds. The present projection is partly based on the completed transfer of the largest property loans from banks to NAMA, which has created a scenario of some increased liquidity to support targeted bank lending to the SME sector. A good number of economists are of the view that even if the projection becomes a reality it shall lead to a jobless recovery as job markets are pretty bleak. However, service sector business leaders predict an increase in new businesses by 48.3% instead of 33.1%, higher profits of 26.5% from 11.5% and higher employment numbers of 16.8% from 6.3%. On top of this came the government’s announcement of €500m fund to support innovation, which was another glimmer of hope.

Based on the statistics, the future indeed looks good. Let’s bank on it for the present moment.

June to July, watch the World Cup at Vista Del Mar

Place your bets!! Ascot Ladies day at Vista Del Mar

Stand up and be heard at the Toastmasters Gala Evening

Seminar on business opportunities for the Costa del Sol

If you have trouble reading this click the link at the bottom

Agenda 01.06.10 Business Opportunities in Andalucia

Hola amigos!

The release of preliminary GDP figures in the UK on Friday saw sterling drop against the dollar, euro and Canadian from a five week high of 1.1615.  0.2% for last quarter’s growth puts pressure on Gordon to come up with solutions rather than excuses in the third and final Prime Ministerial debate.  Sterling had strengthened in the lead up to Friday’s market open on the back of optimistic economic (GDP) forecasts from the financial sector in March.

If the market still believes that Greece and other European economies have a long term solvency problem, then this may translate into a short term liquidity problem.  Despite the IMF involvement and the support of some of the EU member states there is yet to be a consensus on how the €30billion Greek bailout might be spent.

The British press has made quite a story of the apocalyptic consequences of a hung parliament. Anecdotally a hung or ‘balanced’ parliament has led to the slight devaluation of a domestic currency, but with previous coalition governments other factors have determined this loss in value so it does not really stand to reason that this is the default consequence.

A loss in the value of the pound may detrimentally affect the balance sheet and could cause a rise in inflation resulting in the need to increase interest rates before the economy is ready; and yet it must be conceded that shaky market confidence, which is natural with a slow recovery, has fuelled the press and government to exaggerate and peddle this view that a hung parliament can only mean a coalition of confusion and in-fighting regardless of the fact that all parties agree their priority is the economy.

Labour has stressed that their priority is economic stability, jobs and trade and liquidity.  According to the polls Labour can’t do this on their own, and with the narrowing of the polls in March the market sold sterling accordingly; yet this most recent rally suggests that the market may have reconciled itself with the fact that a hung parliament where a united coalition focuses on maintaining growth, jobs and the recovery, might not be detrimental to economic growth.

Further to this Mr Cameron and George Osborne, the City’s ‘Golden Boy’, have already made assurances that they will take money out of labour proposals to start repairing the deficit.  It seems that the markets are responding positivity to both of the major parties stating their priorities regardless of who wins on 6th May.

The real risk to the economy is with a hung parliament that does not deliver on its economic pledges.  At the moment you could argue that Labour’s initiatives have not delivered the recovery and growth that was promised, but whether or not that is sufficient reason to vote for another party is not the point. The most important issue is that all the money borrowed and pumped into the economy has not yet been paid for, and has not translated into the moderate growth we might have expected.

Many people simply want to know whether the rate will go up and where it will go to.  There is no way of answering this at this time.  The election is a blip.  We rely on our economy performing consistently, and improving in those damaged areas in order to give a firmer outlook.  Private sector investment is key, but can only come from confidence and leadership in business in government.  I am still bullish on sterling for 2010, but my expectations have changed largely to take into account the relatively poor economic data.

Please feel free to contact me at keith.s@currenciesdirect.com and I will reply to all your questions promptly.

Visit us in our Spanish offices in Costa del Sol, Costa Almeria, S. Costa Blanca and N. Costa Blanca

Contact Us:

• Telephone: UK 0845 130 8148
• SPAIN 902 310 444
• Email: 4business@currenciesdirect.com
• www.currenciesdirect.com

Appearances can be deceptive; especially to the outsider observing events that are still unfolding following the Greek bailout. They would be shaking their heads in disbelief that the Eurocrats think that all their problems have been solved.

The problem still remains that the global markets in the past 12 months have become supercharged with government stimulus and both equity and commodity markets soared on the back of this.

The European Central Bank began withdrawing their stimulus in December 2009 and it took only one month for the ship that is Greece to hit the rocks. Now, imagine if that ship had been a super-tanker like Italy, Spain or Portugal – it would have been a massacre. But make no mistake; we are still in very stormy waters that could yet yield a very nasty surprise.

What the Europeans are asking the market to do is this:

1) Believe in the fact that they can reduce their budget deficits back down below 3 % (something they have never done since the Euro’s inception)
2) Believe that the southern European states can increase productivity and structurally reform (something they have also failed to do since the Euro’s inception)
3) Reduce their public sector debt (something that has in some cases doubled since the Euro’s inception).

Now the one thing that won’t go away is the debt that these countries carry and unless they can:

1) Radically reform their labour laws
2) Increase productivity
3) Increase the rate of growth
4) Cut public services

…then the Euro as a currency will continue to suffer. What you will probably start to see is a two-step Euro, North and South.

When the Euro was launched the main concern the North had with the South was the four points I have just mentioned, all of which have been ignored for the past 10 years. So to expect a change in behaviour from these countries is farcical to say the least.

April & May are big months for Greece – they have to go to the market to raise about 16 billion Euros. The fact that the markets are worried about this is in itself laughable when you consider the US government was only last year chucking trillions of dollars at any industry that happened to raise its hand for help. It shows how deep the political diversions are now in Europe.

The seas are still very stormy

and I am already munching the sea sickness tablets in anticipation of the Greek bond issuance, I suggest you do the same.

Please feel free to contact me at keith.s@currenciesdirect.com and I will reply to all your questions promptly.

Visit us in our Spanish offices in Costa del Sol, Costa Almeria, S. Costa Blanca and N. Costa Blanca

Contact Us:

• Telephone: UK 0845 130 8148
• SPAIN 902 310 444
• Email: 4business@currenciesdirect.com
• www.currenciesdirect.com

Our next Meeting is being held at a great venue and location on Wednesday – 7th April 2010.
If you have not already reserved your place, be sure to book NOW to avoid disappointment.
RSVP by Return Please!! to sue@4businessglobal.com

WHERE:

Marbella Golf & Country Club
KM 188, Marbella, Malaga
Tel: 952 830 500

START TIME:

1.45pm Registration — 2.00pm Prompt Start

Map:

COST:

Members 17.00€, Guests 23.00€ (includes lunch)

I’m happy to announce the date and venue for our next business lunch meeting:

WHEN:

Wednesday – 19th May 2010

WHERE:

Marbella Golf & Country Club,
KM 188, Marbella, Malaga
Tel: 952 830 500

START TIME:

1.30pm Registration — 2.00pm Prompt Start

Map:

COST:

Members 17.00€, Guests 23.00€ (includes lunch)

RSVP:

To reserve your place please confirm your attendance NOW, or no later than Monday 17th May 2010.
Email Sue McClellan or call us on 652 15 36 08

Can you imagine how hard you would have to work otherwise, to put yourself in front of so many prominent decision makers at the same time?

NEW to 4Business? No problem!

Why not join us at our next meeting and further grow your business?







Our Meetings attract the attendance of many local businesses. It’s the best opportunity on the Costa del Sol to meet lots of other business owners who can help you find your next referred customer.

I’m happy to announce the date and venue for our next business lunch meeting:

WHEN: Wednesday – 24th March 2010

WHERE:

CIOMIJAS Hotel
Ctra A7, Km 201 29649 La Cala, Mijas Costa, Malaga
Tel: 952 599 347

START TIME:

1.45pm Registration — 2.00pm Prompt Start

Map:

COST:

Members 15.00€, Guests 20.00€ (includes lunch)

RSVP:

To reserve your place please confirm your attendance NOW, or no later than Monday 22nd March 2010.
Email Sue McClellan or call us on 652 15 36 08

NEW to 4Business? No problem!

Why not join us at our next meeting and further grow your business?

Our Meetings attract the attendance of many local businesses. It’s the best opportunity on the Costa del Sol to meet lots of other business owners who can help you find your next referred customer.

Can you imagine how hard you would have to work otherwise, to put yourself in front of so many prominent decision makers at the same time?

4Bs Trevor Brookes entertains us yet again in what will be a fun filled night of music, Pie & Peas.

As we all know Trevor has a fantastic voice so this night should be another entertaining evening, take your self back in time with us for a good old knees up.

Rose & Clavel Chartered Accountants is running an informative seminar on Tuesday 2nd March entitled “Cultivating Your Business”. This two-hour presentation will contain practical, useful information on running and managing a business for predictable results and profit. Cultivating Your Business will be an interesting, interactive seminar, avoiding technical jargon and illustrated with case studies. It will cover several important subjects which every business should understand,

Including:

• The importance of management accounts for controlling your business
• Why good housekeeping is key for business-efficiency
• The ins and outs of employment law
• The dangers of missing tax deadlines
• How to speed up debt-collection and improve cash-flow

The seminar will be presented by Susana Serrano-Davey A.C.A, Founder and Director of Rose & Clavel Chartered Accountants. She is a Spanish national who is also a U.K. registered Chartered Accountant and has worked with prestigious firms including PriceWaterhouseCoopers UK. This has given her the understanding of both the Spanish and English systems. Susana is excellent at explaining complex issues in plain English and using practical examples to help businesspeople get to grips with their compliance responsibilities and learn how to manage their financial affairs more productively.

Cultivating Your Business is part of the Nurturing your Business Seminar program running throughout 2010. To take a look at the full seminar programme, or register your interest for future seminars visit www.roseandclavel.com

Key Information:

Date: Tuesday 2nd March
Location: Rose & Clavel, Centro Plaza, Nueva Andalucia
Time: Two sessions available – 11.00-13.00 and 18.00-20.00
Cost: 25€ per person, first five people to register attend free of charge
Contact: info@roseandclavel.com www.roseandclavel.com