Aurelia Butler

The 2021 growth rate was below the 11% compound average annual increase seen in the last 10 years, according to an IA survey. “Whilst 2021 was a positive year, we now face a very different operating environment,” IA CEO Chris Cummings said in the report, pointing to the war in Ukraine.”Rising interest rates bring the spectre of recession and weaken the outlook for asset growth.”Sterling fell to record lows against the dollar this week as fears mounted over the government’s recently-announced fiscal plan, unleashing calls for an emergency Bank of England rate hike to restore confidence.Assets managed within funds open to a range of investors reached 4.1 trillion pounds last year, with almost two-thirds sitting in funds registered overseas, mainly in Ireland and Luxembourg. So far, the European Union has not materially restricted delegation, the mechanism which allows overseas asset managers to run funds based in the bloc, but the volume of business, which brings in export earnings to Britain, highlights what’s at stake if EU-UK relations broke down completely over issues like post-Brexit Northern Ireland.Nearly half of assets in the survey are now subject to environmental, social and governance criteria, and assets applying exclusions reached 28%, from 25% a year earlier.Graphic: https://fingfx.thomsonreuters.com/gfx/mkt/dwpkrogywvm/IA%20Graphic%203.PNGCummings described the growth of sustainable and responsible investing as a “standout trend”.($1 = 0.9260 pounds) More

South Korea’s science minister has admitted that a “sense of crisis” has gripped the country’s semiconductor industry, as the East Asian nation braces for greater challenges from the US and China in an intensifying global chip war.There is growing fear among Korean officials and industry executives that the country will shed production facilities as Korean chipmakers, lured by subsidies and tax incentives, rush to build semiconductor plants in the US. China is also catching up fast in the memory chip sector on the back of generous state funding.Lee Jong-ho, minister of science and information communications technology, and a renowned semiconductor expert, told the Financial Times that legislation passed last month had “laid the legal groundwork to support the semiconductor industry against severe competition from countries like the US, China, Japan [and in] Europe and Taiwan”.“It reflects a sense of crisis about our competitiveness on the global stage and the act is designed to strengthen our competitiveness in supply chain and security,” said Lee.“Korean companies have received relatively smaller tax benefits from the government and suffered from a lack of talent compared with China, the US and Taiwan, so we addressed the problems with the legislation.” Science minister Lee Jong-ho said that legislation passed last month ‘had laid the legal groundwork to support the semiconductor industry’ © BJ Warnick/Newscom/Alamy Washington is using $52bn in grants outlined in the Chips and Science Act to lure the world’s chipmakers to expand their manufacturing in the US. But the legislation also includes “guardrails” that prohibit recipients of US federal funding from expanding or upgrading their advanced chip capacity in China for 10 years.Last week, South Korea’s trade minister Ahn Duk-geun told the FT that “our semiconductor industry has a lot of concerns about what the US government is doing these days”. He acknowledged disagreements between Seoul and Washington over US restrictions on the transfer of cutting-edge manufacturing capabilities to semiconductor facilities in China.South Korea remains the world’s biggest memory chip producer, with Samsung and SK Hynix together controlling about 70 per cent of the global Dram market and more than half of the Nand flash market. Dram chips enable short-term storage for graphic, mobile and server chips, while Nand chips allow for files and data to be stored without power.But the Korean chipmakers’ technological edge over US rival Micron in the Dram business appears to be narrowing, while Chinese chipmakers such as YMTC are expanding their market share in the Nand flash market. Apple said this month that it was “evaluating sourcing from YMTC for Nand chips to be used in some iPhones sold in China”.“The sense of crisis and anxiety over our industry’s competitiveness is greater than ever,” said Kim Yang-paeng, senior researcher at the Korea Institute for Industrial Economics and Trade. “There is a concern that the country’s role in the global supply chain could be threatened as Korean chipmakers flock to the US.”James Lim, an analyst at US hedge fund Dalton Investments, said: “The volume that YMTC supplies to Apple will be small but it shows that China is catching up fast in terms of technology and could be a threat to South Korean chipmakers.” Industry officials want the South Korean government to provide more support for domestic chipmakers as the US, China and Europe boost investment in the sector.

President Yoon Suk-yeol, who said semiconductors “determine the fate of the South Korean economy”, has promised greater backing for the industry. But two important bills aimed at bolstering it, known as the K-chips acts, are still pending in parliament.The Yoon administration, which assumed office in May, has expanded tax breaks and reduced red tape. It also intends to provide funding for essential infrastructure such as electricity and water supply for chip production facilities. It wants to develop large “chip clusters”, too, which will gather together production and research and development, as well as attract foreign chipmakers to Korea. “The domestic chip market is not big, so companies need to set their sights on the global market to generate profits,” said Lee.Addressing the “lack of talent” referred to by Lee, the government plans to train 150,000 people over 10 years to boost the semiconductor workforce.But the chip clusters have been held up by environmental issues and problems securing permits. They are also unlikely to satisfy US officials, who worry that too many of the world’s chips are already produced in geopolitical hotspots across East Asia.Analysts also noted that much of the R&D being conducted by Korean companies on next-generation semiconductor technologies was taking place in the US.“The South Korean semiconductor industry is worried that they could be overtaken by promising new competitors, just as they overtook others in the past,” said Burm Jin-wook, professor of electronic engineering at Sogang University in Seoul. More

DUBLIN (Reuters) – Ireland will deliver what ministers have called two budgets in one on Tuesday, making the usual spending increases and tax cuts while also helping firms and consumers pay soaring energy bills in what they hope will be a one-off intervention.As one of the few European Union countries set to deliver a budget surplus this year – in Ireland’s case due to surging corporate tax receipts – ministers will be able to spend more next year while keeping the public finances in the black.The government already announced in July it would boost the 2023 budget package to 6.7 billion euros ($6.5 billion) to increase recurring spending and the amount of money people can earn tax-free to help offset some of the effects of inflation hitting a near 40-year-high of 10%.It also promised a one-off package including grants for companies and cash for households to pay energy bills. That will come in at around 3 billion euros, according to two sources briefed on the negotiations which are nearing a conclusion.With most of the one-off payments to be made within weeks, the 2021 budget surplus will be lower than the 0.9% of GDP predicted by the finance ministry, while the provisional 2.2% forecast for 2023 does not include budgetary measures.In May, the European Commission forecast that Denmark would be the only country in the EU to deliver a surplus this year with Sweden, Ireland and Luxembourg joining them in 2023.Ireland would still be taking in less money that it spends without the corporate tax haul mostly generated from its large multinational sector. Finance Minister Paschal Donohoe is expected to announce he will stash some of the excess receipts into the state’s currently empty ‘rainy day’ reserve fund.The rest will help fund permanent hikes to social welfare rates, cuts in childcare costs and a public sector pay deal, with additional child benefit payments and allowances aimed at protecting people against fuel poverty among the one-off measures.($1 = 1.0350 euros) More