23 AugCarnama: Buy Or Lease?

What if someone were to tell you that you could ride a high-end sedan or the SUV that you always wanted to drive for three to five years rather than own a run of the mill sedan or a hatchback? The catch: you do not own the high-end car but just lease it for a particular period.

Many companies and individuals seem to be taking to the leasing way which is growing along with the automobile industry which is slowly recovering from a dampening demand. At a time when the passenger vehicles sales grew for a straight third month in July signaling a recovery in the automobile market, car leasing too is expected to continue the pace. Industry trackers say that the leasing industry has been continuously growing for the past three years.

Automobile sales including cars, utility vehicles and vans grew to 1,99,000 units a jump of about 6.5 per cent in July this year compared to July 2013 according to Society of Indian Automobile Manufacturers (SIAM). In the first four months of the fiscal, the passengers vehicles grew by 2.5 per cent, while overall auto sales grew by 11 per cent to 6.4 million units.

In India, leasing primarily means enticing top executives with high-end cars, which are leased, and which are part of the perks of the executives. Industry experts say that the leasing industry in India is growing at the rate of around 20 per cent year on year. This however, is on a small base of 36,000 cars being leased every year by a handful of players. The lease car business is expected to grow at a faster rate by 2015 despite the slowing down of the economy.

More than 95 per cent of the cars are being leased by companies in India as part of the compensation package to their employees or as part of the companies fleet. Many companies have also started leasing out cars instead of buying them out, and this number is growing as apart from the big corporates, even small and medium companies are being attracted by the leasing firms. While the cars being leased by individuals are a small percentage of the total lease segment, some players are also betting that it is expected to grow at a faster pace.

Industry trackers say that the cars leased in India fall under two types operating lease and finance lease. Under operational lease, the leasing company would lease out a car to the lessee (customer or borrower) for a fixed period, say five years, and at the end of the tenure, the car would be returned back to the leasing company. For these five years, the leasing company would be responsible for the maintenance, insurance and other expenses of the car. At the end of the leasing term, the leasing firm would take back the car. The lessee would have an option to buy back the car at the residual value. Meanwhile, in the finance lease, at the end of the tenure, the car would be bought back by the lessee at a predetermined price notwithstanding the market price of the car at that time..

In India, the finance lease is an unorganised sector and there are no figures available for this segment. The total number of car under operational lease including the top players is 36,000 and growing more than 20 per cent year on year.

Industry Growth
In the operational lease segment, there are six major players who are present in India and who amongst themselves command more than 90 per cent of the total market share. Lately many automobile firms especially the top end ones like BMW, Mercedes and Audi too have entered the leasing segment with their own models.

The leasing segment is growing because more and more firms are now opting for leasing a car than owning one; the segment has grown fastest in last two years. May be because companies are realising that owning a car is costlier than leasing it, says Suvajit Karmakar, chief executive officer, ALD Automotive. ALD, a Europe based firm, currently has a fleet size of 8,500 cars in India and expects to touch a fleet size of 10,000 by the end of 2014. ALD is targeting Small and Medium Enterprises for the growth. The company has also devised some new structures in the leasing vertical to attract the SMEs.

While the automobile industry is directly linked to the peoples optimism or emotions while buying a new car, but not so for the leasing industry. Luckily for the leasing industry, the consumer sentiments are not as important as the decisions taken by corporate. In fact as buying a car becomes more expensive companies would increasingly opt for leasing, said Sunil Gupta, CEO, Avis India. Avis India, a joint venture between Avis Europe and the Oberoi Group (EIH), which currently have about a fleet of less than 1,000 cars plans to have about 4,000 cars by 2016.

Of about 20 lakh cars sold in 2013, around 4 lakh are bought by the companies. Many in the leasing industry say this is a potential for leasing firms as they can convert a large chunk of the corporate purchases to lease. Leasing accounts for about 40 per cent of the total car sales in the Europe and the US and the Indian leasing industry is still in the nascent sage compared to that. Industry trackers say that for a company as against an individual buyer, leasing a car also makes sense as; many banks do not give loans to certain companies to buy a car beyond a price range. The same car could be leased as it is shown as an expense in the balance sheet of the company.

Currently most of the cars – from a Tata Nano to a high end Jaguar – are being offered by the leasing companies. The number of high end cars in the total pie is more than 75 per cent.

The Way Ahead
While 20 per cent year-on-year growth may look really impressive, many analysts point out that the base of leasing is very small, especially in a country where around 2 million cars are sold annually. The penetration of the leasing industry, including both operational as well as finance lease is around 4 per cent in India.

The real growth would come from leasing to the individuals and not companies but in India the first challenge is to convince the buyer that not owning a car is cheaper. Secondly the leasing companies do not have an infrastructure equivalent to banks or NBFCs who can access individuals credit history, says Anindya Chakraborty, managing director and chief executive officer, Tranzlease, an Indian company which has a fleet of about 1,500 vehicles. Tranzlease plans to double the size of its fleet by the end of 2014. The company also has plans to start an NBFC by which it could then tap the individual lease segment. Industry trackers say that while it would be a credit risk for leasing companies the growth could be faster in individual leasing segment than business to business leasing currently.

While the leasing companies could take anywhere around five years before they enter the individual lease segment some of the bigger car manufacturers are already present there. Car firms like BMW, Audi and Mercedes already have presence in the individual leasing segment through their finance subsidiary.

For any individual opting to lease the top end cars the cost of the car at the end of the leasing tenure roughly comes to about 50% of the total price of the car. This and the individual or the company does not have to pay for the down payment. None of the companies provide the breakup of the sales figures and what percentage of the sales is through lease.

For the leasing industry the interest rates in the automobile loans does not come in the way of growth, but the interest rates per say could just slower down the growth. While it cannot be said that there would be no impact of the interest rates on leasing industry it is minimal. Also the biggest challenge for the leasing industry is that of awareness and I think the fleet size could double in next few years if we could overcome this, says Rahul Maroli, general manager, commercial, at LeasePlan India.

Industry trackers say that a sudden boom is also seen in leasing of multi utility vehicles and light commercial vehicles. Currently LCV and MUV consist less than 10 per cent of the total lease universe but it would double in two to three years. There is a huge growth in this segment in the coming years, adds Maroli.

Write to Sachin@businessworld.in

23 AugBehind Ferguson’s unrest: Failed federal policy and the Black-White housing gap

NEWS ANALYSIS

On the surface, the unrest in Ferguson, Mo., was about local police using deadly force on an unarmed young man. But on a deeper level, it reflected the increasing poverty and economic decline that affects ethnic communities all over America.

Despite rosy reports in the media about the end of the national foreclosure crisis and the recession that followed, all is not well in our inner cities and suburbs with largely minority populations, like Ferguson.

The foreclosure crisis was hard on many Americans, but it was a disaster for communities of color, including the citizens of Ferguson.

Half of Ferguson Homes Underwater

In the zip code that encompasses Ferguson, half (49 percent) of homes were underwater in 2013, meaning the homes market value was below the mortgages outstanding balance. This condition (also called negative equity) is often a first step toward loan default or foreclosure, according to the recent report, Underwater America, from the Haas Institute for a Fair and Inclusive Society at the University of California, Berkeley.

Mortgage lenders targeted predominantly black and Hispanic areas for the highest-risk, highest-cost types of mortgage loans, such as adjustable-rate mortgages and loans with high prepayment penalties. This led to higher-than-average default rates, according to the Housing Commission established by the Bipartisan Policy Center in Washington, DC

Many of the families that were sold risky mortgages had good credit, decent incomes and everything else necessary to qualify for traditional long-term, fixed-rate loans. Yet, they were not offered those kinds of loans, but instead steered into exotic and costly mortgages they did not fully understand and could not afford, the commission said.

This deliberate targeting of minority areas for the sale of risky and expensive loans, as the commission described it, wreaked havoc on the financial wellbeing of affected families and undermined the stability of entire neighborhoods.
African-American and Latino borrowers were almost twice as likely to have lost their homes to foreclosure as non-Hispanic whites, according to the Center for Responsible Lending (CRL).

Communities of color got the worst of everything. They were given the highest-risk, most expensive mortgages, they received the worst servicing from their mortgage lenders, and they have suffered the most damage from the nations long economic slump, said Liz Ryan Murray, policy director for National Peoples Action, a Chicago-based group that has been fighting against discriminatory home lending practices since the 1970s.

Black-White Housing Divide Historic

The homeownership rate for African-American households peaked at 49 percent in 2004, according to Harvards Joint Center for Housing Studies report, The State of the Nations Housing 2013. The rate of black home ownership-with all the potential for upward mobility it offers-fell to 43.9 percent in 2012. The homeownership rate among white households declined during that time, too, but remained at 73.5 percent.

The black-white gap [in homeownership rates] has reached historic proportions, Harvards report said.

There has also been a powerfully negative ripple effect on other property owners who never had a problem making their mortgage payments but owned property near people who did. The losses in household wealth that resulted from foreclosures and abandonment of nearby properties have disproportionately hurt communities of color, according to many sources that have studied the issue.

In ethnic neighborhoods, the average decline in home prices from 2006 to 2013 was 26 percent, according to Harvards 2014 report. Thats roughly three times the decline experienced in white areas.

Nationwide, about 27 percent of homeowners in minority areas had negative equity compared to about 15 percent of owners in white areas.

Little Prospect for Recovery

Lower-income areas have little prospect for home prices to recover soon, or for businesses or banks to start reinvesting in hard-hit neighborhoods.

In some communities with many foreclosed properties, the crisis threatens to doom the entire neighborhood to a cycle of disinvestment and decay, according to Chicagos Business and Professional People for the Public Interest.

Their report goes on, A cluster of vacant properties can destabilize a block. A cluster of troubled blocks can destabilize a neighborhood. The costs are substantial.

Cities affected the most by foreclosures cant afford to do very much to stimulate new investment or buy and fix abandoned properties. In many cases, they cant even afford to board up abandoned properties or clean up trash left by vagrants and vandals.

Adding to the impact of foreclosures is the ongoing economic slump and the high rate of black unemployment. As a consequence, poverty and the despair and anger that go with it, are increasing in suburbs like Ferguson.

Between 2000 and 2011, the impoverished population in suburbs grew by two-thirds–more than twice the rate of growth in cities, according to Confronting Suburban Poverty in America, a 2013 book from the Brookings Institution Press.
50 Years Since Watts

The year 2015 will mark the 50th anniversary of the beginning of an explosive series of urban events in American history. An August 1965 traffic arrest in South Central Los Angeles lit the fuse on one of the most devastating civil upheavals in American history.

African-American residents of the Watts section of Los Angeles rebelled against a mayor and a police force many considered to be racist. The fires and the violence raged for six days, resulting in 34 deaths and the destruction, damage or looting of 1,000 buildings.

After more rioting in 1966 and 1967, a presidential commission on urban problems was convened and Congress enacted programs to provide affordable housing and revitalize cities. In 1968, equal access to housing regardless of race became the law of the land.

To a very large extent, most of those programs worked as intended, improving conditions for millions of Americans, many of them ethnic families.

Unfortunately, the United States governments commitment to housing and cities has waned in recent years. The decline in funding and elimination of certain key programs could not have come at a worse time. Meanwhile, there has been a powerful backlash among mostly white communities against federal legal initiatives to enforce the fair housing and fair lending laws.

The US Congress has been fixated on budget cuts, and with a contentious election coming up, much of the progress made since the 1960s is in jeopardy. President Barack Obamas 2015 proposed housing budget would restore some of the cuts in funding for housing programs made in recent years. However, even if Congress accepted his plan, it would not restore all the cuts or provide resources sufficient to address the nations housing and urban problems.

Arrested Progress Against Poverty

After the riots in 1965, 1966 and 1967, the National Advisory Commission on Civil Disorders (known as the Kerner Commission) issued a report saying, Our nation is moving toward two societies, one black, one white–separate and unequal. Segregation and poverty have created in the racial ghetto a destructive environment totally unknown to most white Americans.

Today, ethnic communities are suffering setbacks again. Even as our population is becoming more diverse, our communities are becoming more segregated and income inequality is increasing.

Arrested progress in the fight against poverty and residential segregation has helped concentrate many African Americans in some of the least desirable housing in some of the lowest-resourced communities in America, according to a 2013 report from the Economic Policy Institute (EPI).

In addition to much higher poverty rates, African Americans suffer much more from the concentration of poverty. Nearly half (45 percent) of poor black children live in neighborhoods with concentrated poverty, but only one in eight low-income white children live in similar neighborhoods, EPI said.

If the recent trends continue, the unrest in Missouri may not be an isolated reaction to a tragic shooting, but a harbinger of things to come.

Andre Shashaty is president of the nonprofit Partnership for Sustainable Communities and author of the forthcoming book, Rebuilding a Dream: Americas New Urban Crisis, the Housing Cost Explosion, and How We Can Reinvent the American Dream for All.

22 AugTelstra launches global cloud collaboration service

Telstra announced today the launch of its global cloud-based unified communications service, the latest offering in its long-term partnership with networking giant Cisco.

The service will be delivered through Telstras cloud infrastructure, which extends to seven locations around the world, including the United States, Europe, and the Asia Pacific region.

Telstras global solution, launched in partnership with Cisco last year, is now available across four continents in 25 countries, and is delivered over Telstras worldwide network extending to more than 2,000 point of presence according to Telstra global enterprise and services director of marketing Nathan Bell.

Our new global service is a significant development in global collaboration capabilities and has been designed specifically for todays dynamic workplace where employees use the web, video, voice to drive innovation and improve productivity, said Bell in a statement.

With Telstra Cloud Collaboration, businesses can roll out extensive collaboration and communications tools to staff throughout the world, scale user profiles and functionality up and down depending on business requirements and ensure employees working remotely have identical resources to those working in the office, he said.

Cisco Collaboration Infrastructure Technology Group vice president and general manager Thomas Wyatt said that Telstra was one of the companys key global partners and the partnership between the two companies now offers one of the most comprehensive cloud-based services in the world to be delivered on a Cisco unified computing platform.

The new service will be available from the end of August to customers on a monthly per-worker basis.

Telstra first announced in March last year it would partner with the network vendor giant to introduce its new set of voice, video, telepresence, and mobile applications known as Unified Communications-as-a-Service.

The product, dubbed Cloud Collaboration, is hosted locally in Telstras Australian datacentres, and has been offered to business, enterprise, and government customers.

In March this year, Telstra said it would launch its own cloud services offering by the end of the year, becoming the first global partner for the Cisco Evolved Services platform in the process.

Cisco has been a key partner in Telstras five-year AU$800 million global investment in cloud services since 2011.

Last week, Telstra revealed that itsunified communications business revenue grew by 21.1 percent in the financial year ending June 30, with 32.2 percent growth in its cloud services business.

22 AugUS farm credit looks safer than houses

By Daniel Indiviglio and Kevin Allison

The authors are Reuters Breakingviews columnists. The opinions expressed are their own. 

The $200 billion-plus US farm credit system looks safer than houses. Washington’s implicitly backstopped agricultural lending complex resembles its ill-fated housing finance counterpart in some ways, complete with a rural equivalent of Fannie Mae and Freddie Mac. That’s cause enough to scrutinize Washington’s little-known farm lending apparatus. But despite a hot land market, the system looks ruggedly capitalized enough to avoid a similar fate.

Prices of prime Midwest land have more than doubled since 2005, according to agricultural lender Rabobank, with the price of corn shooting from less than $2 per bushel to a record-beating $8 per bushel in 2012. Until recently, the real estate boom was largely the result of scarce crops, as supply failed to keep up with growing demand from protein-hungry Asian consumers and government-mandated ethanol production. A bumper 2013 harvest finally tipped the market into surplus, leading to sharp falls in prices.

But land prices have kept on climbing this year, fueling worries about a farmland bubble. Near-zero interest rates have kept mortgage costs down and made financial returns from farmland competitive with yields on government securities.

That has spurred some interest from Wall Street. The latest instance is the US Department of Agriculture’s new public-private partnership to fund at least $10 billion in rural infrastructure projects. The plan, announced on July 24, is designed to help stretched government funds go farther. In another sign of investor interest, Farmland Partners, an agriculture-focused real estate investment trust, priced a $44 million public offering of shares last month.

There are echoes of another wave of financial-sector fascination with property: residential housing in the run-up to the 2008 crisis. Then, too, asset values were rising fast and investors wanted a cut. And in farming, as in housing, Washington provides implicit guarantees through government-supported entities including the Federal Agricultural Mortgage Corp, known as Farmer Mac, the farming cousin of Fannie and Freddie.

The two systems are, however, structured differently. The home loan market thrived largely through the originate-and-distribute model, where private-sector lenders would create loans, package them into mortgage-backed securities, and sell them to investors. Most mortgages were guaranteed by the government through Fannie, Freddie or the Federal Housing Administration (FHA). When the original lenders stopped paying attention to credit quality – and weren’t reined in by the guarantors – millions of bad loans were written, which helped spur the 2008 crunch.

The overseers of the farm credit system, however, tamed its government-sponsored enterprises (GSEs) after a bailout in the 1980s. Egged on by weak lending standards, growers overextended themselves during the inflation-driven 1970s commodity boom. That led to a wave of farm bankruptcies, mortgage defaults and bank busts when the cycle turned. By 1985, farm credit banks were losing $2.7 billion a year, quickly chewing through their capital cushions.

In 1987, Congress reluctantly provided $4 billion of taxpayer funds to shore up the $70 billion system’s weaker lenders. It also forced governance changes and created Farmer Mac to foster a secondary market in agricultural mortgages. The scars of that experience explain the system’s conservatism today.

Fannie alone guaranteed nearly $3 trillion of home loans in 2007, while at the end of last year the farm credit system’s loans, excluding Farmer Mac, stood at $201 billion. And Farmer Mac backs just $14 billion of outstanding credit, which includes a few billion of overlap with other system lending.

In 2013, most of the agricultural sector’s loans were provided to farmers by 76 Agricultural Credit Associations, two Federal Land Credit Associations and cooperatives. They obtain their funding from three Farm Credit Banks and one Agricultural Credit Bank.

These banks are funded with debt issued by the Federal Farm Credit Banks Funding Corporation, and its bonds are guaranteed by the government-run Farm Credit System Insurance Corporation, which collects annual insurance premiums from system banks. Farmer Mac also adds secondary market support for certain system loans, providing additional liquidity and lending capacity. These institutions are all regulated by the Farm Credit Administration.

The farm lenders must retain their loans, rather than selling them on. That makes credit quality a higher priority for farm lenders than it was for mortgage lenders during the bubble. That may be why the system generally demands that borrowers put down 40 percent to 50 percent equity.

By way of contrast, under certain conditions, the FHA will still accept as little as 3.5 percent down-payments. In the pre-crisis housing market, lenders and guarantors even accepted ideas like negative amortization mortgages in which the amount owed increased over time.

The respective capital cushions in the farm and home lending arenas also provide a stark contrast. Fannie, which eventually required a government bailout exceeding $100 billion, had a measly 1.7 percent layer of protection. On top of all the equity the farm system demands from borrowers, its associations and banks combine to provide a capital cushion that tops 20 percent.

The Farm Credit System Insurance Corporation provides another 1.7 percent cushion for debt holders. About half of agriculture sector loans are originated by commercial banks, but these also largely follow the prudential standards set within the system.

That leaves agriculture positioned to weather an expected correction in farmland values, as crops remain abundant and prices correspondingly weak – not to mention the likelihood that mortgage rates could rise once the Federal Reserve pushes interest costs higher. Rabobank thinks it could take at least a 10 percent correction to bring farmland values back in line with historical norms.

Borrower equity and capital in the farm lending system could each, separately, absorb a sharper correction. Loan equity alone, and certainly the combination of the two buffers, could even handle a 35 percent crash, as seen in US home prices from 2006 through 2012. That’s surely beyond the worst case, with farmland valuations and finance less stretched than in the pre-crisis housing market. The farm system may be another mesh of government subsidies, but it’s a lot less fragile than the home finance equivalent.

22 AugLending has tended to focus on housing. Photo: Brendan Esposito

Consistent analysis demonstrates that we have a systematic issue transitioning national savings to real productive capital, such as nation building infrastructure, whichISAfirmly believes should be front and centre ofFSIdeliberations.

Mr Murrays interim report, published in July, acknowledged the sharp increase in residential property lending in recent decades, saying this posed a systemic risk to the financial system.

But ISA- whose members are big infrastructure investors who also compete with the major banks – will call for a greater focus on what it calls short termism in finance.

Within housing lending, for instance, it says banks areincreasinglylending to finance the resale of existing housing rather than build new homes.

In the past three years, it says only 12.2 per cent of new residential lending went towards newly built homes, compared with 22 per cent in the early 1990s and more than 30 per cent in the 1970s.

The figures highlight a long-running debateoverthesurge in lending for housing, which critics view as an unproductive use of capital.

However, market economists say the decline in lending to business has reflected choices by companies, rather than decisions by banks.

Barclays chief economist Kieran Davies said companies had opted to fund recent investment through earnings or by borrowing via the bond market.

I dont think theres actually a constraint on corporate credit from the banks. I think its more the case that corporates in recent years have either had sufficient cash or access to offshore funding to enable them to do their investment, Mr Davies said.

Reflecting this conservatism, big firms arehoardingcash. Juneresearch from Mr Davies found large Australian companies had 75 per cent of profits in bank term deposits, enough to fund almost a year of business investment.

The relative importance of bank lending to housing has also been exaggerated by building societies becoming banks and lenders holding more home loans on their balance sheets rather than via the securitisation markets, Mr Davies said.

In response to the boom in home lending,ISAhas previously urged the inquiry to consider incentives to encourage longer term investment, such as limiting availability of capital gains taxconcessions.

22 AugVOLTA FINANCE LIMITED – ADMISSION TO THE LONDON STOCK EXCHANGE

NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES

*****
#xA0;Guernsey, 19#xA0;August 2014

Volta Finance Limited (the Company) today announces that, in addition to its listing on Euronext Amsterdam, the Company will seek admission of its shares to trading on the London Stock Exchange plc (the LSE and Admission).

The Board believes that admission to the LSE will assist the Company with its stated aim of improving the liquidity of its shares and will also enable the shareholder base to be broadened over time.

Subject to the necessary regulatory and shareholder approvals, it is anticipated that Admission will take place around the turn of the year.

Further announcements in connection with the listing process will be made in due course.

*****

ABOUT VOLTA FINANCE LIMITED

Volta Finance Limited is incorporated in Guernsey under the Companies (Guernsey) Laws, 2008 (as amended) and listed on NYSE Euronext Amsterdam. Its investment objectives are to preserve capital and to provide a stable stream of income to its shareholders through dividends. For this purpose, it pursues a multi-asset investment strategy targeting various underlying assets. The assets that the Company may invest in either directly or indirectly include, but are not limited to: corporate credits; sovereign and quasi-sovereign debt; residential mortgage loans; automobile loans. Volta Finance Limiteds basic approach to its underlying assets is through vehicles and arrangements that provide leveraged exposure to some of those underlying assets.

Volta Finance Limited has appointed AXA Investment Managers Paris, an investment management company with a division specialised in structured credit, for the investment management of all its assets.

ABOUT AXA INVESTMENT MANAGERS

AXA Investment Managers (AXA IM) is a multi-expert asset management company within the AXA Group, a global leader in financial protection and wealth management. AXA IM is one of the largest European-based asset managers with #x20AC;547 billion in assets under management as of the end of#xA0;December 2013. AXA IM employs approximately 2,143 people around the world and operates out of#xA0;21 countries.

CONTACTS

Company Secretary and Administrator
Sanne Group (Guernsey) Limited
voltafinance@sannegroup.com
+44 (0) 1481 739811

Depositary
State Street Custody Services (Guernsey) Limited

For the Investment Manager
AXA Investment Managers Paris
Serge Demay
serge.demay@axa-im.com
+33 (0) 1 44 45 84 47

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This press release is for information only and does not constitute an invitation or inducement to acquire shares in Volta Finance. Its circulation may be prohibited in certain jurisdictions and no recipient may circulate#xA0;copies of this document in breach of such limitations or restrictions.

This document is not an offer for sale of the securities referred to herein in the United States or to persons who are US persons for purposes of Regulation S under the US Securities Act of 1933, as amended (the Securities Act), or otherwise in circumstances where such offer would be restricted by applicable law.#xA0; Such securities may not be sold in the United States absent registration or an exemption from registration from the Securities Act.#xA0; The company does not intend to register any portion of the offer of such securities in the United States or to conduct a public offering of such securities in the United States.

*****
This communication is only being distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the Order) or (iii) high net worth companies, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as relevant persons).#xA0; The securities referred to herein are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such securities will be engaged in only with, relevant persons.#xA0; Any person who is not a relevant person should not act or rely on this document or any of its contents.

Past performance cannot be relied on as a guide to future performance.

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This press release contains statements that are, or may deemed to be, forward-looking statements. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms believes, anticipated, expects, intends, is/are expected, may, will or should. They include the statements regarding the level of the dividend, the current market context and its impact on the long-term return of Voltas investments. By their nature, forward-looking statements involve risks and uncertainties and readers are cautioned that any such forward-looking statements are not guarantees of future performance. Volta Finances actual results, portfolio composition and performance may differ materially from the impression created by the forward-looking statements. Volta Finance does not undertake any obligation to publicly update or revise forward-looking statements.

Any target information is based on certain assumptions as to future events which may not prove to be realised. Due to the uncertainty surrounding these future events, the targets are not intended to be and should not be regarded as profits or earnings or any other type of forecasts. There can be no assurance that any of these targets will be achieved. In addition, no assurance can be given that the investment objective will be achieved.

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22 AugFocus on Increasing Your Credit Score by Filing for Bankruptcy in St. Louis, MO

Many people are affected by the struggles of debt. In today’s world, it is unrealistic for creditors to assume that people have the ability to pay off all of their debt and still keep their family afloat. Fortunately, everyone gets the chance to manage their finances without being hassled by bill collectors and struggling with overdue debt.

Since filing for bankruptcy is a serious financial decision, it’s important to understand exactly what this process entails. Bublitz Baro LLC, a  bankruptcy law firm in St. Louis, helps people understand the process of filing for bankruptcy. This bankruptcy lawyer can help you understand all of the steps that you need to take to make the best decision for your financial future while eliminating credit debt.

To start eliminating debt, you can file for Chapter 7 or Chapter 13 bankruptcy. The most commonly filed type of bankruptcy is Chapter 7. During an appointment with this bankruptcy attorney to discuss your options, you can learn if bankruptcy is right for you.

While you may think that there is no way for you to pay the bills you owe, this isn’t always the case. These personalized attorneys customize their services to accommodate the specific needs of clients with payment plans for credit debt elimination designed to complement your budget. No matter what has happened to make your debt become unmanageable, these services for debt elimination can help you regain control of your finances.

With this experienced bankruptcy law firm in your corner, you won’t have to face bankruptcy alone. This attorney has the legal expertise to provide you with the debt relief you need. With flexible payment plans available, you can find affordable legal advice and representation without sacrificing quality. 

Bankruptcy helps many people take control of their finances and enjoy the benefits of a fresh financial start.  For more information from this premier bankruptcy law firm, call (314) 685-8539 or visit the website at http://www.bankruptcylawyer-stlouis.com/.

Media Contact
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Contact Person: Steven Bublitz
Email: Send Email
Phone: (314) 831-2277
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Website: http://www.bankruptcylawyer-stlouis.com

Source: www.abnewswire.com

21 AugSuncorp Bank lending up five per cent

Suncorp Bank has released its full year results, revealing a five per cent increase in home lending.

Residential mortgages now account for 78 per cent of the regional bank’s lending portfolio, with commercial and SME lending contributing 12 per cent (up 4.4 per cent) and agricultural lending contributing 9 per cent (up 7.3 per cent).

In the 12 months to June 30, Suncorp managed to reduce its non-performing loans by 18 per cent, helping the bank deliver an after tax profit of $228 million.

The lender’s net interest margin increased from 1.64 per cent to 1.72 per cent in the year to June 30.

Chief executive Patrick Snowball said the clear and consistent strategy and focus on simplification were reflected in the group’s strong financial results in 2014.

“We’ve achieved significant milestones in simplifying our business and delivering ongoing cost savings,” Mr Snowball said.

“We’ve made appropriate investments in technology, data and business intelligence and we’ve taken the necessary measures to account for fundamental changes in the life insurance industry,” he said.

Simplification initiatives continue to deliver benefits and are expected to provide $225 million in savings in the 2015 financial year and $265 million in the 2016 financial year, Mr Snowball said.

“Positive momentum remains across all of Suncorp’s business lines and we are targeting growth of between 4 per cent and 6 per cent in the coming year,” he said.

 

21 AugFinancial reform report card — Commentary

When the credit bubble burst in 2008 and the world almost fell into another Great Depression, the publics anger could be distilled into two demands: that the people responsible for the calamity should be brought to justice, and that the government should act to ensure that nothing like it happened again.

The first demand was never met. Although prosecutors have obtained large civil judgments against major banks — most recently a tentative $17 billion settlement with Bank of America — no top official at a major financial institution has been convinced of a crime.

It can be hard to prove an intent to commit fraud with people who deceived themselves as thoroughly as they deceived others.

The second is more of a mixed bag. Four years ago, Congress enacted a major Wall Street overhaul, known as Dodd-Frank, after its key sponsors. The law has made some significant improvements but has done little or nothing about other vulnerabilities.

With the sixth anniversary of the worst of the financial crisis approaching, heres a report card on how well — or poorly — key areas have been addressed.

Money markets: A

One of the scariest moments of the 2008 financial crisis came when a money market mutual fund broke the buck after Lehman Bros. failed. That small loss was enough to trigger a $300 billion stampede out of money funds and to prompt the Federal Reserve and Treasury to quell the panic by temporarily backing such funds the way it does bank accounts.

It took several years and many false starts, but the Securities and Exchange Commission finally voted last month to have money market funds rise and fall based on the value of bonds they hold, rather than trying to mimic bank accounts.

This might seem like a technical matter, but its a huge step toward preventing runs such as the one that occurred in 2008.

Consumer protection: A

The Dodd-Frank law created a new federal watchdog, the Consumer Financial Protection Bureau, to defend customers interests in their dealings with financial companies. The CFPBs first victory was survival, as Republican lawmakers and powerful industry interests tried to gut it.

By forcing five major credit card companies to return $1.5 billion to consumers, and exposing other scams by debt collectors and payday lenders, the agency has sent a long-absent message: Financial companies can no longer rip off consumers with impunity. And its public database gives people a place to complain and get action.

Too big to fail: C

Perhaps the best news about the financial sector is that banks have much stronger balance sheets than they did going into the crisis.

This has been partly the result of the 2010 law, which ordered regulators to develop rules requiring greater liquidity and capital reserves, which provide a cushion against losses.

Even so, though banks have bolstered their balance sheets under pressure, they have won delays in the implementation of most rules.

The 2010 law also made a stab at creating a process to allow major banks to fail in an orderly way.

Just how this would work with banks holding trillions in assets and liabilities is anyones guess. The law required the biggest banks to create credible living wills, or plans for how they would wind down operations in case of looming failure.

Last week, though, federal regulators rejected the plans of 11 big banks, calling them unrealistic or inadequately supported and giving them until July 1 to submit revised plans.

Credit ratingagencies: D

Agencies such as Moodys and Standard amp; Poors contributed to the financial crisis by giving AAA ratings to portfolios of toxic loans. The agencies were paid to do so by the people putting the portfolios together, a conflict of interest akin to authors hiring their own book reviewers.

A few ineffectual regulations were imposed, but the bolder solution — separating the financial link between raters and sellers of securities — has gone nowhere.

Fannie Mae and Freddie Mac: F

These two government-sponsored enterprises grease home lending while making a tidy profit in most years by capitalizing on their government connections. They came late to the subprime mortgage party and didnt cause the credit bubble, but they did make it worse.

Even before 2008, it was obvious that changes to Fannie and Freddie were needed to limit risks to taxpayers. Many years, several proposals and one enormous financial crisis later, nothing has been done.

21 AugTelstra Becoming Bigger Player On Asian, World Digital And Cloud Stage (TLSYY)

The change in business for Telstra Corporation Ltd (OTCPK:TLSYY) from what originally was Australias public telephone company to an increasingly international telecom and enterprise service company can be seen very easily within its latest 2014 full year results.

As the market leader in Australian home phone, broadband and mobile phone service, the $64.3 billion company is known for its solid dividend payment, which currently has a yield of 5.1%. However, average earnings growth over the past 5 – 10 years has not been great. The company can see that to really drive earnings it must become an Asian regional, if not a world-scale, business.

Just within the past year or so, it has made great strides in putting the next steps of its overseas expansion in place, as well as ways to fund the growth. In the full year 2014 financial results analyst briefing presentation, it showed the breakdown of sales revenue growth, and what a telling story it told.

(click to enlarge)

Source: telstra.com.au (Note: dollar values are in AUD)

It is seeing its traditional fixed-line phone service revenue decrease, along with media and data and IP. The businesses seeing the greatest increase are mobile phone (which would include broadband service), network application and service NAS and international – 5.1%, 27.8% and 15.1%, respectively.

Telstra now has a customer base of 16 million mobile users, and its 4G network covers the locations of 87% of the Australian population. It still can grow more in both coverage and users, but for a multi-billion dollar company, it needs scale it can expand into.

That means Asia. However, that doesnt just mean mobile phone service, which many companies in Asian countries are servicing already. As more and more companies are themselves operating on the internet and increasing international business, Telstra wants to establish itself as a business enterprise services provider as well as a digital communications and media company.

International expansion

Recently, it acquired the US video technology company Ooyala, which it had already held a 23% stake in previously. It services video and digital TV content producers to deliver across any device to mass audiences. Especially important is its data analytics to clients to focus personalised content and advertising. Companies like NBC Universal, Dell, News Corp and the Washington Post use its services. This is a bigger step into the US media market.

At the same time, Telstra is planning to work with networking giant Cisco Systems (NASDAQ:CSCO) and other companies to build a global intercloud – a network of cloud computing platforms that could support objects connected by the internet of everything. Wearable devices, appliances as well as cars could be connected online through this proposed $1 billion proposed cloud framework. European, Canadian and Indian companies also will become project partners.

Separately, even Japans NTT (NYSE:NTT), the telecom giant, wants to team up with Telstra for more business ventures in Asia. Telstra could connect its networks with NTTs data centers around the world, and establish itself as a business enterprise service provider to a wider range of customers.

This is in line with its current working relationship with Indonesias main telco, Telekom Indonesia.

What benefits Telstra from the Cisco and NTT ventures is that the company doesnt have to build and develop totally new network infrastructures itself, saving funds that could be spent on such things as cloud enterprise networks and further regional tie-ups.

Telstra is also the majority shareholder of Autohome Inc. (NYSE:ATHM), Chinas largest auto sales website, which listed in December 2013. This has been a great investment for the company since it bought its initial majority shareholding in Autohome in 2008 for around AUD 76 million ($70.8 million).

Telstra achieved a 14.3% increase in NPAT in 2014, partly from the business enterprise service and international expansion. Its stepping out onto the world stage in a big way, and I believe it has much more to do before it starts to slow down.

Income stream from existing copper phone network infrastructure

The expansion can be part-funded by income it plans to receive through its leasing agreements for the phone copper network with the National Broadband Network Company. The income is projected to incrementally increase annually for the next 55 years, starting out at AUD 400 million ($372.9 million). It could rise to AUD 1 billion ($932.2 million) by 2019, and steadily continue from there.

Another possibility that is becoming more likely is that Telstra may turn ownership of the phone network over to NBN Co. with no direct compensation for it. However, NBN Co. would be responsible for maintenance of the infrastructure, which could cost around AUD $1 billion ($932.2 million) annually.

Telstra would be the most experienced and technically capable to perform the maintenance, so a good part of that projected annual cost may come to the company as fee income year after year. Either way, the asset will produce a steady income stream for the company to support future business growth.

My view from here

Telstra Corporation Ltd has great growth potential and offers shareholders a stable, strong 5.1% dividend yield. I think it would be a very good addition to an income or international equities portfolio.