QROPS update 12th July 2011 Pension income drawdown & Foreign exchange QROPS and QNUPS

At Gerard Associates Ltd we continue our daily look at factors affecting markets and currencies allowing some insight into conditions affecting exchange rates.

Cash and income timing from a UK Pension income drawdown, flexible pensions or QROPS (Qualifying Recognised Overseas Pension Scheme) should be considered to maximise the Pension drawdown, QROPS and investment income taken.

Investment market volatility and currency exchange remains a challenge. The global economics are volatile and unprecedented in history. Currency exchange continues to concern expats with UK Pensions, income drawdown now including flexible pensions, a QROPS and QNUPS (Qualifying non UK Pension schemes).

Burberry and the miners dominated the risers early on, as the Footsie attempted to recover from the previous day of losses.

Iconic British luxury brand Burberry jumped higher early on after underlying sales soared by 34% in the first quarter, driven largely by strong retail growth in China. "We are pleased with Burberry's start to the year, with double-digit growth balanced across retail and wholesale and all regions and product categories," said chief executive officer Angela Ahrendts.

Mining titan Xstrata was in demand after taking full control of the Pallas Green zinc project in Ireland, buying out the 23.6% interest held by its joint venture partner, Minco, for $19.4m.

Sector peers Fresnillo, Antofagasta Randgold, Lonmin, ENRC, Kazakhmys, BHP Billiton and Anglo American were also firmer, tracking metals prices higher.

Marks & Spencer was the worst performer despite seeing sales (excluding VAT) rise by 3.2% in the 13 weeks to 2 July, compared with the year before. Like-for-like (lfl) sales in the UK were flat on the general merchandise sales side, in line with the prediction made by broker Matrix Group, while food sales grew 3.3% on a lfl basis yoy, ahead of Matrix's forecast of 3.0% growth.

Interdealer broker ICAP, the largest in the world, saw revenue fall by 4% in the first quarter, hampered by a slow start and tough comparators last year, but expects things to pick up for the rest of the year. Shares fell lower.

Chocolate maker and retailer Thorntons fell into the red after sales for the 8 weeks ended 25 June down £1.9m to £20.6m.

The European Union's emergency summit to be held on 11 July may shed some light on the details of the Eurogroup's initial proposals, possibly including elements critical to address the contagion risks, Barclays Capital Research said in a note released on Wednesday.

The brokerage's analysts said the European Financial Stability Facility (EFSF), a special purpose vehicle designed as a bailout fund, could be endowed with further lending resources and the ability to purchase government bonds in the secondary market.

The analysts arrived at this conclusion following the Eurogroup's statement which confirmed that more flexibility should be provided to the capacity and scope of the EFSF.

These (missing) elements are critical to address contagion risks in the EGB markets, Barclays Capital analysts said.

Stocks rose in early dealings as investors looked beyond the continuing woes in Europe to focus on strong economic growth in China.

China's gross domestic product expanded at a faster than expected rate of 9.5% in the quarter to June from the same time a year earlier. The figure is down from 9.7% in the previous quarter but ahead of analyst forecasts of 9.3%.

A separate report showed industrial production rose at a stronger than expected rate of 15.1% last month and retail sales expanded 17.7%.

In the latest twist in the Eurozone saga, Moody's lowered its rating Irish debt to junk status.

In company news, newspaper giant, News Corporation, slightly higher today, has dropped its bid for British broadcaster BSkyB, following the phone-hacking scandal that resulted in the closure of NewsCorp's News of the World.

Search engine giant Google, online bookseller Amazon and film streaming specialist Netflix are benefiting from favourable coverage from JP Morgan Chase, which starts coverage on the stocks with "overweight" ratings.

Lastly, and also benefitting stocks, in his semi-annual report to Congress, at 3PM, Federal Reserve President Ben S.Bernanke has again outlined what additional measures the monetary authority might undertake should its central scenario for a recovery in economic growth not be borne out by events. Perhaps only naturally enough market participants are increasingly attaching greater importance to these kinds of remarks of late.

In his semi-annual appearance before the US Congress, Federal Reserve president Ben Bernanke outlined measures that could be adopted in case his estimates for a pick-up in economic activity are not met.

Among these possible measures is a third round of quantitative easing.

The market's reaction was immediate. The main benchmark indices doubled their gains to an average of 1% compared to the +0.5% gain at the open.

Gerard Associates Ltd advises UK residents, expats and people considering living abroad on the technical and currency options available for Pensions, pension income drawdown, flexible pensions, QROPS, QNUPS and investments in a clear format allowing all customers to make an informed choice. Our service encompasses Pension including QROPS and QNUPS and investments in a clear format allowing all customers to make an informed choice.

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