Category: Financial Services

Mozes Victor Konig on Start-ups and VCs

Working in the Venture Capital industry can be a great opportunity for the right person.  It is not for everyone (and thankfully there are a multitude of entrepreneurial options available for those for whom it is less suitable) but it is a good option for some.

CEO of MVK Ventures SARL Mozes Victor Konig has been working in the VC community for some years now.  Specifically in the start-up venture space.  This is unfortunately an oft-untapped category of the industry. For example, back in 1997 figures showed that out of the $10bn Venture Capitalists invested, only $600m (6 percent) went to startups. MVK Ventures SARL has been trying to redress this balance.

The VC industry has been able to work with those with tremendous talent who require capital to get their idea off the ground.  These wannabe entrepreneurs just need a helping hand and then they can make a successful business.  Companies such as MVK Ventures SARL – which has to date created 32 portfolio investments, 9 exits, and 4 unicorns – wants be a part of this process.

US Brokerage Websites Perform Poorly to High Trading Activity

Can brokerage websites handle massive customer visits?

Tuesday was a bad day for the websites of several US brokerage firms. In the wake of Monday’s record stock market drop of 1,175 points, several websites either crashed or operated painfully slowly as customers took action the following day.

Fidelity said late Tuesday morning that they finally overcame what were intermittent technical glitches on its website. Earlier that morning customers were greeted with the following message when they tried to access Fidelity’s website: “Our homepage is temporarily unavailable but don’t worry, we’re working quickly to fix this problem.”

Visitors to the Ameritrade website saw this message on Tuesday: “Due to volatile market conditions we are currently experiencing slowness on our web platform.” The company recommended customers try a mobile app or other related company website for information or access.

The social media platform Twitter hosted complaints from those trying to get into the Merrill Edge website which is operated by Bank of America. A spokesman issued the following statement: “Our systems remain operational. Some clients reported slowness logging into My Merrill and Merrill Edge due to unprecedented trading volume.”

Monday’s crash was the largest point drop in stock market history. On Tuesday the market opened down an additional 500 points but rallied during the first half hour of trading to climb back into positive territory. By noon on Tuesday the market was up by 52 points.

Back in November Fidelity experienced some down time on their website that disallowed customers from reaching their online accounts. The company offered free trades by way of compensation.

On Monday several brokerages experienced temporary issues of sluggishness on their websites, such as T.Rowe Price and TD Ameritrade. The issues were quickly resolved.

Major US Payment Processor Buying UK-based Worldpay

A merger is under way between two rival payment processing firms: the US-based Vantiv and the UK-based Worldpay. Vantiv has submitted a formal offer to purchase Worldpay for close to £8bn ($10.4bn). The offer was made after many weeks of negotiating terms of the deal, including the relocation of UK employees when the merger is implemented.

The deal values Worldpay’s shares at $5.16. When the deal is finalized Worldpay’s headquarters will move to Vantiv’s home, Cincinnati, Ohio, in the USA. As a single entity, the company expects it will be able to process about $1.5 trillion worth of payments and about 40 billion individual transactions per year. This should bring the company’s revenue up to about $3.2 billion/year.

Vitav has grown by leaps and bounds of late, becoming the largest payment processing company in the United States after its acquisition of Mercury Payment Systems and Moneris Solutions. The company is now ready to broaden its base in the European market with the purchase of Worldpay.

Worldpay not only processes traditional payments from brick and mortar shops; they also work in the growing e-commerce space, a market Vantiv would like access to. Due to the huge growth of spending on-line companies that facilitate online payments, like Worldpay, are ripe picks for well-established payment companies as a way for them to reach into the internet marketplace.

Vantiv predicts that the takeover will boost their annual savings to about $200million by the end of the third year. This will be offset against the cost of integrating Worldpay into Vantiv, which is expected to come to about $330 million, almost all over the first two years.

Ford Launching New Financing Scheme to Attract Young Drivers

Ford Motor Company will begin to offer a new type of car purchasing plan which will be a kind of middle ground between a traditional car finance program and a car hire agreement, which could be a model for the way cars will be purchased in the future.

The car manufacturing giant will start offering finance deals for as short a term as one month to buyers in the US who are not interested, or cannot afford longer, yearly leases. The “variable-term leases with flexible payment options” will combine maintenance, insurance and towing services into one monthly premium which can either be renewed or opted out of each month.

The hi-tech company Canvas will run the program, but Ford’s US consumer financial credit provider Ford Motor Credit, will back up the scheme. David McClelland, executive vice president of marketing and sales at Ford Motor Credit said his company “recognized the need for financial services and technology to facilitate our future vision.”

Canvas, formerly Breeze, was purchased by Ford at the end of 2016. The tech company is expert in providing short-term vehicle finance to drivers working for Lyft, Uber and others. Ford is using Canvas’s web-based platform, as well as their familiarity with short-term leasing, to attract a broader range of customers. The program is hoping to attract young drivers, especially those who would otherwise not be eligible for auto financing.

CEO of Canvas, Ned Ryan said, “Our mission is to identify, test and launch financial products that meet the changing needs of consumers. We’re addressing the void in the consumer space between daily rentals and long-term (financial) commitments.”

New Program Launched to Help Students Learn About Educational Loans

It is quite common for students seeking higher educations after high school to take out student loans to help finance their journey through college or university. Unfortunately many students find themselves weighted down by debt when they graduate, or worse, when they quit school without a degree.

The problem has reached outlandish proportions with current student debt estimated to be the mind-blowing amount of $1.26 trillion. The sheer magnitude of the debt is motivating the US Department of Education to get into gear with a new program designed to teach college-bound students all about federal student loan programs. This experimental program, which will present the advantages and disadvantages of student loans, will hopefully help students make the right choices for them.

“It’s important for students to make good decisions about their student loan borrowing,” said U.S. Under Secretary of Education Ted Mitchell. “Students at these institutions will receive proactive and ongoing counseling and they will gain tools to better understand and manage their own finances.”

Some students leave school with staggering debt, in some cases as much as hundreds of thousands of dollar’s worth.

The program, which is considered an experiment, will be introduced in 51 post-secondary institutions. Thirty-five are public, two-year schools, 14 are public four-year institutions, and one is a private, non-profit four-year school. The last is a proprietary institution.

“This experiment will yield important information about whether additional counseling improves student outcomes, including program completion and loan repayment,” Mitchell added.

Finance Professionals Facing Pay Cuts After New Regulations Kick In

After long-delays it looks like regulators will finally have their way; legislation to restrict bonuses were proposed by financial services watchdogs are about to come into practice.

Payouts are being limited as one of the last parts of the Dodd-Frank reforms which were instituted to prevent financial disasters. The new rules will apply to a wider range of employees at large banks and not just the top tier execs, in addition to those working at other kinds of institutions.

The new rules will mostly affect those who are designated as “significant risk-takers.” They include those on the top 5 percent of earners at the largest banks or others who put at risk large amounts of an institutions capital.

BillGuard Launches New iPhone App Update

BillGuard, a personal finance startup aimed at helping users save money and protect their finances, recently announced that it will be updating its iPhone app. The update is intended to help users defend against fraudulent charges on their credit cards, as well as to become more proactive with their money. The updates will also help users by updating them about available discounts.

Tech Crunch explains that “by connecting their accounts to its big data platform, the company provided a way for its users to track and dispute fraudulent charges or billing errors on their credit and debit cards. Soon after it moved to tackle the problem of so-called “gray charges”- that is, monthly or yearly subscription charges that users either unknowingly signed up for or signed up for and forgot about.”

In other words, the company has provided users with a reactive approach to personal finance. Now they are hoping to help users make money proactively with its two new app features ‘Spend Analytics’ and ‘Smart Savings’.

“Our core mission is to use data to save people money,” BillGuard CEO Yaron Samid said. “We’re really good at saving people from the bad stuff, and now we want to find the good stuff… The app is like the perfect accountant running in the background and trying to find ways to save money.”

 

Current Value of Gold

Jerusalem-GoldFor the first time in four sessions, 14 May witnessed an increase in gold.  This was assisted by a softer dollar.  As well, a somewhat unexpected increase in the US retail sales last month enhanced the notion that America’s economy remains buoyant.  The precious metal reached a peak of $1,444.96 an ounce and stood at $1,440.66 by 0419 GMT, up $10.61.

However, this has not been the general trend.  New Delhi witnessed a drop of almost Rs 400 which boosted retail purchase for jewelers reporting around a 15 percent increase in sales.  Indeed, there was a substantial amount of gold purchasing on Akshaya Tritiya Day, which is seen as “an auspicious day for buying gold and silver.”  There was also an increase of 14 percent in gold EFTs on NSE Monday.

 

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