2006: London and UK stay number 1 for FDI in Europe

[JGG]

According to all preliminary statisctics (Ernst & Young, Cushman Wakefield), 2006 was a very good year for FDI (foreign direct investment) in the UK. London outpaces any European city.

Another interesting article on this subject from presswire:

http://www.prnewswire.com/cgi-bin/st...4488944&EDATE=

2006 - A Robust Year for Business in the United Kingdom
UK Ends Calendar Year With an Exceptional Business Record and Strong Economic Position

NEW YORK, Dec. 11 /PRNewswire/ -- Monitoring of UK foreign direct
investment (FDI) flows began in 1970. Since that time, the UK has been the
number one recipient of US generated foreign direct investment in Europe.
Currently, the UK is on-track to mark its 36th consecutive recorded year as
the investment market of choice for US business.
Europe, the world's largest single market, offers US businesses access
to over 450 million consumers and the business opportunities typical of
highly developed economies. The UK remains the home of choice for US
companies entering the European market.
Analysts and consultants agree, the UK has a sound economic position.
* UNCTAD's World Investment Report shows that the UK was the largest
single recipient of FDI inflows in 2005, increased by 193% from
$56 billion in 2004 to $165 billion;
* Consulting firm IBM - Plant Location International confirms that the
UK remains the top recipient of global FDI projects entering Europe;
* IBM - Plant Location International also reports that the UK was the
top recipient of European R&D, attracting 26%, with France coming in a
distant second with 19%;
* In April 2006, an Arthur D Little report cited that the UK's increased
public investment and policy direction set out in the Government's
Science and Innovation Investment Framework of 2004-2014, positioned
the UK favourably to capitalise on opportunities for future
innovation;
* The Organisation for Economic Co-operation and Development noted that
the UK economy out-performed its major rivals in the third quarter of
2006, with a 0.7% growth rate;
* The Economist reported on the view that London is overtaking New York
as the financial capital of the world, citing the UK's legal
structures, political stability, even financial regulation and
favourable time zone, amongst other factors as the forces driving the
shift;
* Ernst & Young's 2006 European Investment Monitor revealed that the UK
retained its first place status, remaining Europe's favoured
investment location. The UK's top position was attributed to new
software and business services projects announced in London and the
South East of England.
"The British Government is determined to win the best talent and to
bring successful, knowledge based industries from around the world to the
UK," said Gordon Innes, US Director of UK Trade & Investment. "The UK has
the highest concentration of venture capital funds outside of the US.
Bolstered by leading-edge research facilities, the talent to deliver highly
productive research initiatives, and the capital to fuel the research, the
UK is strongly positioned to innovate and take the innovation to market."
"IP is a critical component of our present and future success in the
global economy," added Innes. "We have launched an independent review of
the UK IP regime to encourage firms and individuals to innovate and invest
in new ideas."

[JGG]

And the old commonwealth links are making their contribution...

From an Indian news internet site:
http://www.zeenews.com/znnew/article...sid=50&sid=BUS

India is second largest investor in Britain after US

London, Dec 06: As Indian companies continue to stalk British business with takeover bids, latest figures reveal that India has become the second biggest investor in London after the United States.

Indians are among the many overseas investors who are driving London's property prices, while the growing number of flights between India and Britain have been bringing an increasing number of professionals and entrepreneurs.

Indian investors are expected to contribute 33 million pounds to London's economy in 2006-2007, according to the foreign direct investment agency, Think London. Indian capital accounted for 18 percent of foreign capital during the current year.

Since 2005, 36 Indian companies have set up office in London, voted the top European city to locate a business this year. On Tuesday, London mayor Ken Livingstone launched a 'Year of India' campaign to attract more Indian companies to London.

According to the latest edition of the European Cities Monitor, London is now the top-rated city in Europe for easy access to markets, qualified staff, external transport links, telecommunications, availability of office space, languages spoken and internal transport.

Recent demographic figures show that people of Indian origin constitute the largest single minority group in multicultural London.

Michael Charlton, chief executive of Think London, said: "These results confirm London's status as Europe's leading city for business and mirror Think London's success in attracting foreign investment. London's position means it ranks amongst the elite group of global cities along with New York and Tokyo.

"London attracts over half of all Indian investment into Europe and provides Indian businesses with a gateway to the continent".

Think London recently assisted The Export Import Bank of India to relocate its European headquarters from Milan to London. Bank representative Samuel Joseph said: "We chose London because it is a more attractive place for Indian businesses.

"It really is the most important business centre in Europe and the financial services industry is very advanced here. Another reason for choosing London was to take advantage of the excellent access to global capital markets."

Last year, Indian companies spent 228 million pounds buying British businesses, with the value of the average takeover rising to 28.5 million pounds compared with just 6 million pounds the year before.

Some of the biggest recent bids and acquisitions by Indian companies are:

1. The Tata Group trying to pull off the biggest-ever Indian takeover of a foreign company, offering 4.3 billion pounds for Corus, formerly known as British Steel. If it goes ahead, the deal will create the world's fifth-biggest steel company.

2. Tetley Tea, the company that invented the teabag and remains the world's second-largest producer of teabags, was bought by the Tata Group for 270 million pounds in 2000.

3. Apeejay International followed Tata into the market for British tea businesses last October when it bought Typhoo for 80 million pounds from Premier Foods.

4. Tyco Global Network, one of the world's most advanced submarine cable systems, was bought by Tata for 69 million pounds in November 2004.

5. Tata also bought Incat International, a British software company, for 53 million pounds last year.

6. Indian liquor tycoon Vijay Mallya's United Breweries is seeking to buy whisky major Whyte & Mackay, which it values at around 400 million pounds.

Bureau Report

[JGG]

And Ken Livingstone is doing his bit:

From another Indian news internet site:
http://www.dnaindia.com/report.asp?NewsID=1067975

London mayor’s office in Mumbai, Delhi

Tuesday, December 05, 2006 23:39 IST

LONDON: Ken Livingstone, the Mayor of London will be opening two Mayoral offices in India – in Mumbai and Delhi — to help extend London's business and cultural links with India.

Hosting the annual Indian Business Reception with Think London, the foreign direct investment agency for the capital on Tuesday, the Mayor said that the business theme for the 2007 programme will be 'India, London – partners in globalisation'.

“India is not only one of the world's most important and rapidly growing economies — it is a rising superpower. It also has one of the world’s most important cultures,” said Livingstone, who has been repeatedly elected as Mayor of London. “London is the most multicultural city in the world and within it those of Indian origin are the single largest minority. With the arrival of more and more Indian companies India’s cultural impact on London is only going to increase further,” Livingstone told a large group of Indian businessmen at Somerset House in Central London.

The Mayor said: “India's rapidly expanding companies are seeking to globalise themselves. London is the world’s most global city. Both therefore have a vital interest in strengthening their links.” To this end Livingstone will personally be going to India next year to open two Mayoral offices.

Next summer London will see a three-month celebration of Indian culture including business events. This will culminate in an India-themed festival on Regent Street in September which is expected to attract up to half-a-million people. India will also be the theme of the annual cultural arts festival that takes place in Trafalgar Square each August.

[JGG]

And the Chinese are not far behind:

From Business Wire:

London Ranks Most Popular City in Europe for Chinese Companies
Sunday September 10, 7:00 pm ET


LONDON--(BUSINESS WIRE)--Sept. 10, 2006--London ranks as the most popular destination for Chinese companies expanding into Europe according to the Ernst & Young European Investment Monitor. The news comes from Think London, the foreign direct investment agency for London. Figures show that since 1997, London has attracted 34 Chinese foreign direct investment (FDI) projects, with 27 of these projects having been completed since 2002. London attracted 15% of all Chinese FDI into Europe since 2002, the highest share for any European city.
"London is seen by Chinese companies as a natural base for expanding into the wider European, African and Middle East markets", said Michael Charlton Think London's Chief Executive. "Over the past four years, London has attracted four times as many Chinese FDI projects as Hamburg or Paris."

In an effort to help more Chinese companies expand into London, Think London recently opened an office in Beijing. The move reflects the growing importance of China to London's economy. In 2004 alone, investment into London from greater China totaled GBP 120 million.

"London is recognised as China's gateway for entry to the European Union and is Europe's global financial and technology hub", said Charlton. The UK is already by far the largest recipient of Chinese FDI in Europe, and a third of that comes to London. London's Chinese business community now includes over 250 mainland companies, most of which have chosen London for their European sales and marketing headquarters. In addition, there are 2,000 businesses operating in London which are Chinese-owned as well as a resident Chinese community of approximately 80,000.

Think London is currently in the process of assisting Hebei Jingniu Group set-up their European headquarters in London. Hebei Jingniu Group is a high-tech enterprise which specialises in the development and production of rolling crystallized glass, on-line coated float glass, crystal nucleus material and jade crystallized stone. Think London also recently helped the China National Offshore Oil Corporation (CNOOC), a state-owned oil company and Mindray, a leading Chinese medical device designer and manufacturer, to expand into London. CNOOC has established a London office to co-ordinate its oil and gas exploration and foreign partnership activities in the Middle East and Africa. Mindray opened its European base in London, focusing on marketing and after-sales service, as well as the UK's National Health Service.

Since 2000, Think London has assisted a wide range of Chinese companies to set up a presence in London, including ZTE, China Telecom Corporation, Shanghai General Electronics Group, China Eastern Airlines, Huawei Technologies, PetroChina, Guangdong Midea Household Electronics, China Eastern Airlines and China Export and Credit Insurance

[eusebius]

Ken Livingstone also gave name to a snackbar in Mumbai or Delhi, or in both, who knows!

[elfabyanos]

This all makes for very interesting reading.
This may be pure speculation on my part but:-
in the coming century of globalisation, and by that I mean a truer globalisation where all markets can comminicate better and invest in each other, as opposed to the US centric set-up of the late 20th century, old Europe is in the perfect place to capatalize on it's geopolitical advantage of being the time-zone link between Wall Street and Asia, and it's great performance as a stable economy. As long as London continues to outperform it's European neighbours in courting these opportunities, I can't help but see a strong 21st century, that sees London retain, and even make serious gains, in it's international clout, and that's starting from an already strong position.
However, I do believe it is good also that plenty of investment is going to places like Manchester, with it's fledgling Science Park, and I feel that there is space for a lot more growth in the other major cities in Europe, in Europe as a whole. I feel that London is at the front of a gang of well positioned cities at the moment.
What does this all really mean to me? More skyscrapers at the next cycle after this one!!!

[pricemazda]

FDI also includes all those British companies bought up by foreigners.

Lets not forget India places heavy restrictions on foreign companies operating and buying Indian firms. Spain also uses large tax breaks to help fund its companies buying up overseas firms, the US places restrictions on companies like its Stock Exchanges and we all know how France feels about its national champions.

Until others operate the same system, we are at a comparative disadvantage.

[JGG]

Originally Posted by pricemazda

FDI also includes all those British companies bought up by foreigners..

Not all of the articles. London and the UK are also leading in terms of new implantations.

Originally Posted by pricemazda

Lets not forget India places heavy restrictions on foreign companies operating and buying Indian firms. Spain also uses large tax breaks to help fund its companies buying up overseas firms, the US places restrictions on companies like its Stock Exchanges and we all know how France feels about its national champions.

Until others operate the same system, we are at a comparative disadvantage.

Do you really believe so? In certain instances it has worked out very well. Would London's position as a financial centre have been as strong as it is today in case the British banks and brokers had been protected? I don't think so. Take the example of the London Stock Exchange. It may be taken over, but then at the same time you have all the London-based investment banks that have announced they will set up their own exchange. All of this brings dynamism, survival of the fittest...

Also, if companies in other countries, out of national pride rather than economic logic, buy UK companies, such as Ferrovial did with BAA at a completely overvalued level, basically the UK is selling overvalued assets and deploying this money (hopefully) to buy undervalued assets. Let's not forget the UK is one of the largest outward investors as well.

And finally, a strategy such as for example in France of creating national champions can come at a heavy cost to the shareholders and citizens. The Suez - Gaz de France merger is decreasing competition. The protection of some French or Spanish companies because they are "strategic" also means that as they cannot be taken over, hence those stocks trade at discounts because the normal "survival of the fittest" rule does not apply.

I think they only reason the UK may be at a competitive disadvantage is if it does not have enough strong and ambitious corporate managers who can convince shareholders to believe in their industrial plans. If other countries want to reduce their own wealth in order to have some status symbols, this does not put the UK at a competitive disadvantage.

[pricemazda]

Take BAA, what do you think will happen to the investment plans with Ferrovial having bought them at a high price?

London will lose out in terms of being europe's air centre as investment will be starved.

Same with the LSE, Nasdaq is heavily in debt and will be much more by buying the LSE. It is rumoured to want to close down the AIM market and transfer the companies to its market in NY, close down the LSEs HQ and scrap its trading system.

The problem is the market in the UK is too short term and lacks any strategic vision.

Our free trade policy was responsible for the UK losing its dominant position in the 19th and early 20th century while others hid behind protectionist barriers while being able to undercut domestic suppliers.

I am all for competition but it only works if its on a level playing field.

[JGG]

Originally Posted by pricemazda

Take BAA, what do you think will happen to the investment plans with Ferrovial having bought them at a high price?

London will lose out in terms of being europe's air centre as investment will be starved.

Same with the LSE, Nasdaq is heavily in debt and will be much more by buying the LSE. It is rumoured to want to close down the AIM market and transfer the companies to its market in NY, close down the LSEs HQ and scrap its trading system.

The problem is the market in the UK is too short term and lacks any strategic vision.

Our free trade policy was responsible for the UK losing its dominant position in the 19th and early 20th century while others hid behind protectionist barriers while being able to undercut domestic suppliers.

I am all for competition but it only works if its on a level playing field.

You give two examples of companies with certain monopolies and in that case you are right. It is the role of the regulators to avoid such monopolies or at least manage them. With BAA that is easy to address and the process has started. And even with the LSE, the FSA can take a pro-active role in making sure the setting up of an aternative exchange is not made too difficult. When there is competition, it forces the companies to invest, irrespective of the owner. And by the way, looking at the state of some of the terminals in Heathrow, I don@t think the problem relates to the nationality of the owner, but mainly to the fact BAA has always had a monopoly.

[Monkey]

Britain had the highest inward FDI of any country in the world this year - higher than the US or China - not just our European rivals.

Britain was also the 3rd largest outward investor after the US and France. Britain's overall involvement in international investment (ie inward + outward FDI) was the highest of any country in the world.

[JGG]

From Think London

http://www.thinklondon.com/press_cen...ReleaseId=3627

LONDON ATTRACTS 40% OF KOREAN FOREIGN DIRECT INVESTMENT PROJECTS INTO EUROPE
January 16, 2007

Over the past seven years, London has attracted 40 percent of all Korean foreign direct investment (FDI) projects into Europe, making the UK the most popular investment destination for Korean businesses in Europe in terms of FDI projects. The news comes from Think London, the foreign direct investment agency for London, which has helped a record number of Korean companies expand into London over the past quarter. The announcement was made at a Korean Business Reception, hosted by Think London.

London offers a natural fit for Korean companies, and there are now over 120 Korean firms located in London. Michael Charlton, Chief Executive, Think London said: ”London has seen an increase in foreign direct investment (FDI) from Korea in recent months. Think London has helped 7 Korean companies expand into London over the past quarter alone and we expect this trend to continue over the coming years as London’s vibrant Korean community continues to expand”. Think London has so far assisted over 300 companies from Asia-Pacific set-up and expand their businesses in London.

The Mayor of London, Ken Livingstone, who also spoke at the event said: “London is the world’s most global city and a leading financial hub for international investors. It is also the world’s most multicultural city with over 300 different languages spoken. London has a lively and growing Korean community and any future investors or visitors will always be welcome in our city. I am determined to make sure London is the natural choice for Korean firms looking for a European base to do business and invest.”

London is home to the largest Korean population of any European city, now thought to number over 20,000 people. Students comprise a significant proportion of this population with 1,600 Koreans studying in the capital – 43% of all Korean students in the UK. There has been an 80% increase in student numbers from South Korea over the past seven years. The Korean community has formed a well-developed social and business infrastructure in New Malden and surrounding suburbs of South London and the area is now home to over 8,000 Koreans.

Think London has helped a diverse range of Korean companies establish themselves in the capital recently including SewonCellontech, an engineering company; Hwaseung, a young people’s clothes and shoes company; SMI Technology, which specializes in the manufacture of Inkjet-Media.

Samsung Design Europe is one of many leading Korean firms with a presence in London. Samsung Director, Harry Choi said: “London packs world culture, as well as British history, into one small place. It’s a shopping mall to the world, so we have to be here.”

Ms Hyun-Jeon Oh, Regional manager at KOCCA Europe, the National Government Office for the Korean Ministry of Culture and Tourism added: “Being based in London, you not only have the advantage of the English language, but you also have access to a wide range of people from many nationalities who speak a multitude of languages.”

The importance of Korean FDI to the London economy was highlighted last night at the Korean Business Reception, hosted by Think London and sponsored by Standard Chartered. Guests at the reception, which celebrated the importance of London’s economic and cultural links with Korea, heard keynote addresses from the Korean Ambassador HE Dr Yoon-Je Cho and the Mayor of London, Ken Livingstone.

[Monkey]

London/Britain is doing so well in terms of investment. It's good news.

[Manchester Planner]

http://newsvote.bbc.co.uk/1/hi/business/6187877.stm

http://newsvote.bbc.co.uk/1/hi/business/6284987.stm

[JGG]

Whilst on the other thread about London's economy a battle is going on about the food choice in London shops, the most important news of today seems to be largely missed. McKinsey has published its report about how London is overtaking New York as the world's prime financial centre. There are over 200 articles on the net covering this, a key extract and some links:

"The pace of job creation in London far outstripped that of New York City, the report says. From 2002 to 2005, London's financial services work force grew 4.3 percent to 318,000, while New York City's shrank 0.7 percent, or 2,000, to 328,400 jobs. London has been gaining an edge in attracting the largest hedge funds. In 2002, London was home to only three of the largest 50 hedge funds, compared with 12 today. Now, 18 of the largest 50 hedge funds are based in New York, compared with 28 in 2002. "

http://www.bloomberg.com/apps/news?p...5tcu8&refer=us
http://www.iht.com/articles/2007/01/...all.php?page=1

Now this also shows how fickle international finance is and the study also points out London's high cost of living as a weakness. We all know the causes: an inadequate planning system and a lack of investment in transport.

A string of European legislation introduced by this Labour government as well as its extradition agreement with the US for "accused but not yet found guilty" (the Natwest case) will weaken London's position. Taxes also continue to creep up under Gordon Brown.

The City used to be rather to neutral towards this Labour government but has now become very pro-Conservative, the main reason being ongoing tax increases and no real returns such as investment in transport infrastructure.

[JGG]

The Ernst & Young European Investment Monitor 2007 is out!

The UK remained in pole position in terms of attracting foreign direct investment projects in 2007. In fact in 2007 the number of FDI projects into the UK grew faster than the FDI projects into Europe!

http://www.eyeim.com/pdf/EIM%20Report%202007.pdf

Courtesey of the region Ile de France, which orders a study regarding FDI into the main European Cities from E&Y every year, we can conclude that Greater London accounted for more than a third of all FDI projects into the UK in 2007. Although there are no specific data available on the London metropolitan area, one can only assume it must account for half of all FDI projects into the UK.

For those who had not seen the E&Y cities study, a copy of it in French:

http://www.biomarchand.com/europinve...IDF%202006.pdf

Good news!

[eusebius]

This is why the media keep silent over floodings and bursting waterlines