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UCAS application numbers show 7.4% drop for UNITE Group

31 Jan

UNITE Group revealed UCAS student application numbers for 2012/13 yesterday, which confirmed a 7.4% drop in applications and met previously announced expectations of a 5-10% fall.

583,546 students applied for university places in 2011, compared with 540, 073 in 2012.

The student accommodation group said they do not expect the decline in applicants to translate in actual student numbers, and remained confident of achieving a rental growth of 3-4% for the year. The reduction in applications means that 2012/13 numbers are broadly in line with those of two years ago, for the 2010/11 academic year.

University places have continued to outride supply by approximately 32%, which means 156,000 students will fall short of a place. UNITE conducted research in December 2011 for 2012 applicants which showed 79% of students were willing to pay an increase on tuition fees for good academic reputation.

Whilst the number of UK applicants has decreased by 8.7%, non-EU students continue to see the appeal of UK universities, as figures show an increase of 13.7%. International students are a key customer segment for UNITE, and this continuing trend supports the Group’s business model and customer acquisition strategy.

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UPP wins bidding battle, securing £230million deal with University

22 Jan

The University of Reading will see its entire on-campus accommodation run by a private student accommodation provider in a £230.1 million deal.

UPP will manage 4,321 rooms under a 125-year agreement in the largest single private residential investment into a UK university. This will consist of the operation of 2,623 rooms of existing accommodation, for the 2011/2012 term, followed by a further 898 rooms currently under construction. 650 new rooms will be developed to complete the project.

The company work with eleven other universities, yet this deal is unique in its time scale – usually such agreements operate between forty and fifty years.

Acting vice-chancellor of Reading, Professor Tony Downes, said he was “delighted” with the deal, and believes it will add to the “high quality experience at Reading.”

The majority of the funding will be provided by Aviva, the UK’s second-largest insurer, marking its first large scale investment into the Higher Education sector.

Sean O’Shea, chief executive of UPP, said: “This deal shows that the higher education sector is bucking the trend, and is an attractive opportunity for investors.”

Mr O’Shea said the deal represents investor confidence in the Higher Education market during such turbulent economic times.

The European Summit Explained

12 Dec

EU leaders met at the European Union summit last week to discuss how they could make progress and avoid Europe falling into a similar debt crisis in the future. Here’s a run down of what happened and what was said.

Some of the measures were simply put in place to put a stronger emphasis on existing fiscal rules that are currently being loosely followed. At present, there is a measure set in place that states if a country reaches a certain amount of debt, they are issued a fine. Yet so far, no countries have been fined.

On Friday leaders discussed a stronger enforcement on this rule, meaning “there will be automatic consequences” for countries who exceed the deficit limit of 3% gross domestic product.

This rule will be made possible through communication between the EU countries – if the European Council agrees that an EU country is breaching fiscal rules, the country could be forced to put a deposit into escrow.

Another fiscal rule outlined at Friday’s summit is that countries must pledge balanced budgets, and will be issued with automatic corrections if they breech the terms.

This would mean if a countries structural deficit breaches 0.5% of GDP they would face automatic consequences. A “debt-brake” puts a cap on public debt according to structural deficit, which means it is adjusted for the business cycle, taking economic boom and bust into account.

The details surrounding this rule are currently rather hazy; whilst Germany currently has a “debt-brake” implemented, it has not been decided what each country’s amount would be, and this must be decided by the EU’s high court.

What’s more, although Germany has a similar measure already in place, they did not manage to prevent it from exceeding the 3% deficit ceiling last year. It is hoped with tighter rules, countries will have to work alone in order to reach their targets, with no oversight from Brussels.

Whilst the general feeling amongst government leaders is that Friday’s plan was a step in the right direction, there are still problems that need ironing out.

John Lonsky, chief economist for Moody’s Analytics’ Capital Markets Research Group said: “There’s been progress, but this is not enough to constitute a satisfactory resolution.”

One of the measures was for eurozone states to provide up to 200billion euros in loans to the International Monetary Fund to help tackle the crisis, with 75% of the money coming from the 17 countries that use the euro.

Lending to the fund has been unpopular amongst IMF shareholders who are wary of sending large amounts of money to Europe.

It was agreed that the 500billion euro European Stability Mechanism bailout would go into action next year. It has been speculated that this would be combined with the 400billion euro European Financial Stability Facility currently in place, but governments have decided that the two will not run alongside each other.

Germany fronted the approach of implementing a new pact that would give the changes a stronger legal force. This would make it easier for EU authorities such as the European Court of Justice and the European Commission, to enforce them.

But not all countries were too keen on this measure – the UK refused to back the change, which means up to 26 governments, including 17 euro countries, will form their own separate agreement.

This led one German daily paper, the Süddeutsche Zeitung, to believe the outcome posed as a victory for Chancellor Angela Merkel. The front page of their weekend paper read: “Merkel succeeds – Great Britain isolated.”

Charles Grant, director of the pro-EU Centre for European Reform said: “Britain is as isolated as it’s ever been in the 25 years I’ve been following the EU. If I had to put money on it now, I think Britain will leave the EU in the next 10 years.”

Now Friday’s summit is over, eurozone governments await the outcome of Standard and Poor’s review, which could pose potential downgrades for triple-A countries.

Japanese stocks fall as ECB fail to meet expectations

9 Dec

The European Union Summit is in full swing, and Mario Draghi has set some ground rules on how to move forward and avoid future debt build ups. Yet Japanese stocks have been left disappointed, as speculation of big bond-buying from Europe falls short…

Japanese stocks fell, and fingers of blame are pointing at the ECB for its apparent speculation of big bond-buying.

Nikkei 225’s Stock Average saw its biggest drop in two weeks, Sony Corp. lost 3.3percent and Mizuho Financial Group slid 1.9percent.

These are companies who are somewhat reliant on ECB bond buying, showing prime examples of how the problems in the eurozone are having a knock-on affect on the market.

Juichi Wako, a senior strategist at Nomura Holdings Inc. said: “The best scenario that the market had expected was for the ECB to decide to expand purchases of government bonds and then for the European Union to strengthen finance regulations.”

ECB expectations also disappointed ratings agency Standard and Poor’s, who saw their 500 index fall 2.1percent yesterday. They anticipated the ECB would expand its 207 billion-euro bond buying program.

Yet ECB president Mario Draghi said he was “surprised” markets thought the bank had been hinting at big bond buying.
In yesterdays speech, Mr Draghi put emphasis on a eurozone “fiscal compact” to restore bondholders confidence:

“What I believe our economic and monetary union needs is a new fiscal compact – a fundamental restatement of the fiscal rules together with the mutual fiscal commitments that euro area governments have made.”

The world is watching to see what happens at the final part of the European summit which is currently in motion. Leaders have already set some precautions to avoid such debt run ups in the future.

The plan includes the startup of a 500billion-euro rescue fund, on top of the 450billion already in place. Ultimately, Mr Draghi believes “the responsibility is with the leaders.”

Gold is the word in Japan as exports are at their biggest high in the last twenty years

8 Dec

People in Japan who bought gold twenty years ago have been cashing it in at record prices, resulting in a boom in Japan’s gold exports.

Shipments in the first ten months of the year reached 95.6 metric tonnes. Many countries have jumped on the gold band wagon; exports to Thailand have tripled, and those to Singapore doubled in the first ten months of last year. And the demand from Europe has almost doubled since the fourth quarter of 2008.

Kotaro Horita, a trader at Mitsubishi Materials said:“More and more people who bought gold and jewelry in the 1980’s and 1990’s are selling back what they purchased.”

The largest gold retailer in Japan, Tanaka Kikinzoku Kogyo K.K. reported a 40per cent increase in gold bought from individuals in the first nine months of the year. According to Horita, China and Southeast Asia have been showing particular interest in the metal, with a high increase in exports.

Precious metals such as gold are considered safe havens during times of global economic uncertainty, as they are a good hedge against inflation; which many experts predict will be coming in the years ahead.

Unlike other safe havens, such as the Swiss franc and the Japanese Yen, the price of gold can not be easily interfered with by any one entity. This could attribute to the jump in global gold investment from 33per cent to 468.

With the future of the euro in question, Central Banks have been turning to gold as a safe haven.
“Central banks are continuing to buy gold exchange-traded funds after concerns arose about the creditworthiness of euro- zone nations,” said Koichiro Kamei, managing director at Market Strategy Institute.

Marcus Grubb, managing director at World Gold Council, predicts the amount bought by Central Banks could reach 450tons this year; a big increase from last years purchases of 142 tons.