If we vote for Brexit what happens

kabayiri

Arklight wrote: »

Thinking that India, a mostly closed economy, invests more in the UK than Western Europe, doesn't pass the common sense test, let alone looking at the numbers.
...

This is another case of a myopic outlook.

There is no point in looking at the numbers today; next year; or the year after.

You have to look at the changes happening in the world over the last few decades, and decide if you think these trends will continue.

Western companies have helped India to build up a large base of IT skills, amongst other things.

They are not going to settle for the second rate work out there. They are going to expand their presence wherever they can.

If you look closely, some of the IT and support functions in our biggest insurers are now owned by Indian companies.

There is room for a profitable relationship.

davomcdave

Arklight wrote: »

What are you putting in for the reporting country? The link you give defaults to Australia. If you put the UK in then as far as I can see India provides a smaller net FDI than Belgium, at 917 something or others (I presume millions).

China is even less at 600 or so somethings. France and Germany contribute about 12,000 somethings combined.

This is also born out by this UKTI report:

https://www.gov.uk/government/publications/ukti-inward-investment-report-2014-to-2015/ukti-inward-investment-report-2014-to-2015-online-viewing

I conclude India is a minnow in terms of inward investment to the UK and there is nothing UKIP can do about it.

It's millions of US Dollars.

You just need to think about it for a second. If there is all these Indian investment into the UK, where are all the Indian factories?

Herzlos

To be fair, they can be investing by buying stuff out, llike JLR. They're never going to outsource factory production to us.

Conrad

So what are people's thoughts on the report in the FT and elsewhere that Central Banks accross the world are reducing thier Euro holdings and consider the EU the greatest risk?

davomcdave

Conrad wrote: »

So what are people's thoughts on the report in the FT and elsewhere that Central Banks accross the world are reducing thier Euro holdings and consider the EU the greatest risk?

https://www.ft.com/content/692768f4-17a3-11e7-a53d-df09f373be87

It sounds like a pretty sensible reaction to me:

Just over a third of the respondents, around half of which were from emerging market central banks, said their concerns over the European single-currency area were based on growing political instability in Europe, which has seen anti-EU parties across the continent secure a larger share of the popular vote in recent years.

The ECB’s negative interest rate policy — intended to spur growth across the eurozone — was identified as another key driver of divestment. The policy, in place since the summer of 2014, has triggered complaints from private banks across Europe, who say it has eaten into their profits. The deposit rate in the eurozone is now minus 0.4 per cent — meaning that lenders in effect pay a levy of that amount on their reserves parked at central banks.

Once Le Pen is beaten a chunk of the political risk goes away. However negative interest rates remain a problem and are probably the bigger problem TBH. If you're an emerging market central bank which half of respondents were then weeing away a chunk of your small reserves each year is probably a bad idea.

Note that the reason for Central Banks moving out of the Euro doesn't really have anything to do with the EU, it's voters voting for dodgy parties and negative interest rates. My opinion is that the tide is going to turn quite quickly on interest rates so that problem is, in my opinion, going to go away pretty soon. Eurozone inflation is rising, albeit from low levels, and unemployment is at an 8 year low, albeit quite a high one.

If I was a treasurer with a central bank I'd be looking at buying US Dollars right now. The US is a known quantity really and generally speaking you're better off in US assets than any others if you want a safe haven.

A_Pict_In_A_Past_Life

davomcdave wrote: »

It's millions of US Dollars.

You just need to think about it for a second. If there is all these Indian investment into the UK, where are all the Indian factories?

Oh look: "While the total number of Indian companies in the UK has increased only slightly in the last year, the total turnover of the fastest-growing Indian companies in the UK has risen 18% in the same period – from £22 billion to more than £26 billion."
http://www.grantthornton.co.uk/insights/top-indian-companies-in-the-uk-in-2016-revealed/

davomcdave

A_Pict_In_A_Past_Life wrote: »

Oh look: "While the total number of Indian companies in the UK has increased only slightly in the last year, the total turnover of the fastest-growing Indian companies in the UK has risen 18% in the same period – from £22 billion to more than £26 billion."
http://www.grantthornton.co.uk/insights/top-indian-companies-in-the-uk-in-2016-revealed/

So you mean that the revenues of all of the Indian companies in the UK were almost as much as the Italian Post Office or Australia's third biggest bank. I can see why Indian companies are reluctant to invest in Britain.

http://beta.fortune.com/global500/list

Arklight

davomcdave wrote: »

It's millions of US Dollars.

You just need to think about it for a second. If there is all these Indian investment into the UK, where are all the Indian factories?

I would welcome someone more knowledgeable than me explaining what counts as FDI. If TATA steel buy a steel plant for £1bn then presumably that year there is £1bn in FDI from India. If they then hire Doris the tea lady on £12,000 a year - is than then a further £12,000 of FDI or does it not count as foreign?

If the following year then government than spend £2bn bailing out the Tata steel plant, does that make Indian FDI -£1bn? (Presumably by now Doris is in the Jobcentre+)

A_Pict_In_A_Past_Life

TrickyTree83 wrote: »

I must admit I can't reconcile the differences, perhaps I'm looking at the wrong/different metrics.

Correlation IS difficult due to the variables.
For example the FDI in/out flow chart for the UK when looking at India has no figures, saying only "confidentiality" .......... which really does not inspire confidence in the figures shown in the FDI by Partner Country chart.

Given the obvious incomplete nature of data in there I myself would be extremely wary of interpreting other than as a pure guideline, and a none-too-accurate one at that.

I must conclude that the data contained therein is so questionable as to be inadequate as a tool in response to the Government's statement and data (such as that is).


Describing the data from the Government's Department for International Trade as "vague" as Arklight has done is sheer trolling IMHO.
Strange isn't it, how some refuse point blank to even acknowledge the possibility of any other than their own narrow and often negative point of view?
Even when accompanied by official data.

Arklight

Conrad wrote: »

So what are people's thoughts on the report in the FT and elsewhere that Central Banks accross the world are reducing thier Euro holdings and consider the EU the greatest risk?

My first thought is I hope to goodness that this makes sterling go up a bit. I work and travel extensively overseas and the hammering the pound has taken post Brexit referendum has wiped 1/4 off my personal and corporate budget.

My second thought is that, as usual, you are misrepresenting what's happening. I have read that banks are reducing their exposure to the euro as "a" risk. This is quite a far cry from "greatest" risk that you are translating, and would like to believe.