Shane Neagle offers Finance Monthly a rundown of the opportunities investors should be exploring in 2021.

2020 has been a wild ride for investors. The coronavirus pandemic and subsequent lockdowns spooked many investors, causing a selling spree that peaked on 16 March . Dubbed “Black Monday III,” 16 March saw global markets decline 12-13%. Nervous investors can hardly be blamed for overreacting, however, when you consider that many across the country were stockpiling toilet paper and canned goods in preparation for the pandemic.

Thankfully, it wasn’t long before the market turned bullish again and stocks began skyrocketing back to their normal levels — or higher. Savvy investors who bought stocks, bonds and commodities during the dip yielded massive returns in almost every sector. 

Although we can’t replicate the amazing buying opportunity 2020 presented, we can look forward to other investments that will yield similar returns. Hopefully, 2021 will see the global economy head further into recovery and present unique buying opportunities of its own. 

In this article, we will discuss five of the best investment opportunities for 2021. 

Five Great Investment Opportunities in 2021

2020 was a unique year in that it brought investment opportunities outside the arena of traditional finance. Online trading became popularised and democratised through easy to use investment apps. For example, the aptly named Robinhood soared in popularity by enabling anyone to trade in the stock market — with a mere smartphone and bank account.

2020 was a unique year in that it brought investment opportunities outside the arena of traditional finance.

The rise of cryptocurrency, an enthusiastic topic among the tech-savvy and millennials, meant that financial opportunities presented themselves to those who might not normally have been interested in investing. 

Perhaps indicative of new market-disrupting trends and the waning power of conventional wisdom, many investment gurus were proven wrong about their predictions in 2020. For example, Warren Buffet, the “Oracle of Omaha,” advised investors to dump airline stocks in one of the worst pieces of advice given to investors this year.

There’s no point rehashing 2020, however. Every good investor knows that profit is made only by looking forward. So, without further ado, here are our top 5 investment opportunities for 2021. 

1. Retailers

Location-based retailers were hit hard by the pandemic, specifically those that hadn’t invested in an eCommerce platform. It’s easy to assume that most people will resume their online shopping habits even after the pandemic, especially when you consider the convenience of doing so. Business owners recognise this, which is why 74% of all organisations are actively involved in digitally transforming their businesses. That includes many brick-and-mortar retailers who are taking their stores online. 

However, there are many purchases that must be seen before being bought. The increased use of vanity sizing and misleading eCommerce photos mean that many consumers won’t purchase clothes without trying them on first. Products like perfume and cosmetics are difficult to choose online. Investing in Nordstrom, Macy’s and similar companies can yield sizable returns. 

Investing in stocks like Simon Property or other companies that hold retail spaces are another potential win. These investments are a little more stable when you consider that the companies actually own the real estate which the retail stores rent, which in the case of massive shutdowns of retail stores can be converted to another profitable use.

Investing in stocks like Simon Property or other companies that hold retail spaces are another potential win.

Home improvement retailers are also steadily on the incline, so buying early in 2021 is well-advised. As more people find themselves at home, interest in home renovations is at a record high. Stocks like Lowe’s or Home Depot are in this category. 

2. Clean energy stocks

As the US prepares to enter a Biden presidency, it’s a sure bet that clean energy will be a focus of his administration. Investing in clean energy stocks or at least keeping abreast of American government developments in eco-friendly policies is a must for 2021.

The movement towards clean energy is a long-term focus for many governments and organisations around the globe. Due to the longevity behind it — and the sector’s significant impact — clean energy is a great candidate for those who favour passive stock investing.

The electric car mandate that was passed in California, which required that all vehicles sold in 15 years be emission free, is a harbinger of more to come. The United Kingdom recently approved a £40 billion investment in green energy. Consider adding energy stocks that offer above average dividends to help your portfolio balance out long-term stocks that might take longer to recovery. 

3. Healthcare stocks (not involved in vaccine research)

A lot of investors looked to healthcare companies working on a vaccine during the pandemic for huge gains. However, many people neglected to consider the healthcare companies that were negatively affected by the pandemic and might yield large returns once a vaccine is rolled out. 

Nearly half of all Americans had medical care delayed due to the pandemic. Pharma and life science companies that are focused on cures and treatments for diseases were put on the back burner as many investors sought out companies like Moderna and Pfizer.

Many people neglected to consider the healthcare companies that were negatively affected by the pandemic and might yield large returns once a vaccine is rolled out. 

Companies that will benefit from an increase in elective surgeries are good investments for 2021. As hospitals have more room for patients other than those infected by COVID-19, there will be a need for different medical supplies and treatments for different ailments. Consider Intuitive Surgical, ARK Genomic Revolution or Danaher for your stock portfolio. 

4 - Bitcoin/cryptocurrency

This year, the Fed printed money at levels never seen before, which will lead to global inflation in the coming years. Investors who are interested in finding a way to store their money without losing its value would do well to look into cryptocurrency, which relies on cryptography to encrypt financial transactions. 

It’s largely for this reason that cryptocurrencies such as Bitcoin are an appealing investment option to so many people. In January of this year, Bitcoin was worth $7,000. As we end the year in December, Bitcoin is now worth a whopping $23,000 — a 228% increase in price.

Bitcoin shows no signs of slowing down in the future. According to Guggenheim’s Scott Minerd, Bitcoin should be worth closer to $400,000 due to its scarcity, the security of blockchain technology and its relative valuation. While you can never really know when it comes to emerging asset classes like cryptocurrencies, the fact that Bitcoin is getting institutional attention certainly says something. To take this a step further, whenever Bitcoin rises, it can act like a magnet — bringing other cryptocurrencies up with it.

5 - Travel Industry

Travel companies like airlines and hotels have no doubt been the hardest hit by the coronavirus pandemic. This presented excellent buying opportunities in 2020 which will continue into 2021. 

Investing in travel companies must be part of a long-term strategy, however. Many experts predict that it will take a few years before the travel industry fully recovers. This isn’t necessarily because people won’t want to continue travelling after being vaccinated. Many businesses that were hard hit by the pandemic will cut back on corporate travel, which is the leading driver of travel in most countries.

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Conclusion

As we head towards the end of an unpredictable year, it’s hard to think about what may still lay around the corner. However, as every good investor knows, it’s important to be ahead of the curve in order to recognise good deals and investment opportunities when they come. 2021 will see the continued recovery of the global economy and will present many great investment opportunities for those who stay focused and informed.

European and US markets are bracing on Wednesday as several countries impose stricter lockdown measures to curtail a spike in COVID-19 cases and the first of two key Georgia Senate races is won by the Democratic Party.

London’s FTSE 100 gained 0.8% at the open, while France’s CAC 40 gained 0.7% and Germany’s DAX gained 0.4%.

Following a brief relaxation of COVID-19 restrictions during the holidays, the UK and European nations are beginning to impose tougher measures. A third nationwide lockdown has been declared in the UK, along with new economic stimulus for businesses in affected sectors, with France and Germany now in their second lockdowns as a highly infectious new strain of COVID-19 spreads internationally.

Markets are also focused on the outcome of the two runoff US Senate votes in Georgia, which will determine whether the Democratic or Republican parties gain a majority. A Democrat win would greatly empower the incoming Biden administration, affecting the reach of the new president’s policies during his first two years in office and impacting the size of the next COVID-19 stimulus bill.

US networks and the Associated Press have called the first of the Georgia races for Democratic candidate Raphael Warnock, likely unseating Republican Kelly Loeffler. Democratic challenger Jon Ossoff also holds a lead over Republican David Perdue with 98% of votes counted, according to the AP.

“Our US economists have indicated that a Democratic Senate would likely lead to another large fiscal stimulus package, possibly including some priorities of the new Administration such as infrastructure,” said Deutsche Bank analysts in a note. “They see that as a material upside to their GDP forecast, which they currently see rising 4.3% Q4/Q4 in 2021.”

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Nasdaq futures were down 1.7% on Wednesday morning, while the S&P fell 0.2% and the Dow Jones gained 0.4%.

Chancellor Rishi Sunak on Tuesday announced a raft of new grants worth £4.6 billion to support firms in the retail, hospitality and leisure sectors.

The chancellor said that one-off top-up grants worth up to £9,000 per property would be issued to businesses in these sectors, with the aim of helping them to last through the winter.

“Throughout the pandemic we’ve taken swift action to protect lives and livelihoods and today we’re announcing a further cash injection to support businesses and jobs until the Spring,” the chancellor said.

“This will help businesses to get through the months ahead – and crucially it will help sustain jobs, so workers can be ready to return when they are able to reopen.”

In addition to the one-off grants, Sunak announced that a £594 million discretionary fund would be made available to support impacted businesses in other sectors, along with £1.1 billion in further discretionary grant funding for Local Authorities, an extension of the furlough scheme and Local Restriction Support Grants worth up to £3,000 a month.

The move follows prime minister Boris Johnson’s Monday evening announcement that non-essential businesses will be shuttered until at least February half-term as England, Scotland and Northern Ireland come under full lockdown measures once again, spurred by an acceleration in the spread of COVID-19 cases and the emergence of a highly infectious new COVID-19 variant.

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Johnson’s announcement prompted business heads to call on the government for support heading into the new lockdown period.

“Tens of thousands of firms are already in a precarious position, and now face a period of further hardship and difficulty,” said Adam Marshall, director-general of the British Chambers of Commerce.

Paresh Raja, founder and CEO of Market Financial Solutions, offers Finance Monthly his predictions for the UK property market in the new year.

2020 has been, by far, one of the most impactful years of the last couple decades. COVID-19 has had a sizeable impact on the world economy, national governments, and health systems around the globe. No industry, nation, or continent has been exempt from the virus’s economic and epidemiological affects, and we are all now beginning to understand the long-lasting changes that have been brought about by the pandemic.

Despite all of these challenges, it is important not to let these developments overlook the successes of 2020. While some industries have struggled, other sectors like property have been able to quickly recover. In fact, one could argue the real estate market is the strongest it has been since the EU referendum in June 2016.

In my mind, the positive performance of bricks and mortar will continue in 2021. As such, now is an ideal time to take a step back and consider just how investors and prospective buyers can take advantage of property investment over the coming 12 months.

A standout performer of 2020

Of all the positive developments witnessed in the UK this year, the ability of the real estate market to sustain a consistent rise in transaction numbers and house prices should be applauded. However, it was necessary for the market to also recover from the initial disruption caused by the first lockdown.

Obviously, property professionals were concerned during this initial stage of the pandemic; with the UK government actively dissuading people from moving home. Lenders retreated from the market, and this resulted in buyers turning to specialist finance providers to complete on sales and prevent existing transactions from collapsing.

Of all the positive developments witnessed in the UK this year, the ability of the real estate market to sustain a consistent rise in transaction numbers and house prices should be applauded.

In May, the government announced that people could once again move home, and that those who worked in the property sector could go back to facilitating transactions. However, in a bid to further incentivise buyers and sellers back to the market, in July the government offered the real estate sector another helping hand.

8 July saw the introduction and implementation of the stamp duty land tax (SDLT) holiday. This means that buyers could now save up to £15,000 when purchasing a new property in England or Northern Ireland. Those who were skittish about completing a property transaction during a pandemic were incentivised back to the market, resulting in a new wave of transactional activity which has been maintained up until today.

Transaction numbers began to grow, and house price indexes recorded a rise in the value of British property for the first time since the 2016 EU referendum. Nationwide, Halifax and Rightmove recorded house price growth between January and November 2020 of +6.5%, +7.6% and +5.5%, respectively.

However, although buyers were keen to take advantage of the SDLT holiday, another obstacle stood in the way of many. In a bid to minimise risk exposure, mainstream lenders are still hesitant when it comes to lending. Some have tightened their lending criteria; others have taken financial products off the shelves, and it is being reported that the time it is taking to deploy loans is increasing.

There is clear buyer appetite for property, and I believe this will be the case so long as the SDLT holiday remains in play. For this reason, property investors and brokers must familiarise themselves with all their finance options, looking beyond mainstream lenders and mortgage providers.

The rise of specialist finance

A survey from September commissioned by Market Financial Solutions found that 52% of the homeowners were keen to take advantage of the SDLT holiday but were put off by the increased likelihood of being denied the necessary financing.

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Prospective buyers whose transactions were at risk of collapsing from a delay in the deployment of their mortgage have, in turn, been looking to alternative lenders. These lenders typically have access to in-house credit lines and can tailor loans to meet the unique circumstances of each buyer. As a result, specialist finance products such as bridging loans can be deployed within a matter of days.

As we enter into 2021, I can only imagine that this trend will continue. The scheduled end of the SDLT holiday on 31 March, combined with the implementation of an overseas-buyer 2% SDLT surcharge on 1 April, means there is likely to be a rush from buyers looking to complete on transactions before these dates.

From reviewing their performance this year, there is a risk that mainstream lenders will struggle to ensure that financing is deployed in time to finalise transactions before these two deadlines. As such, there is a growing case for prospective buyers to seek out mortgage alternatives, such as fast loan solutions.

An optimistic outlook for 2021

Looking to the coming 12 months, it is clear that property investment will play a defining role supporting the post-pandemic recovery of the UK economy. The SDLT holiday has been a success, and there is clear buyer appetite for bricks and mortar. For this reason, it makes sense for buyers and brokers to also familiarise themselves with alternative loan options. Doing so will ensure they can confidently complete on transactions without delay.

Bitcoin reached a value of over $34,000 for the first time on Sunday, a scant three weeks after crossing the $20,000 threshold.

Already the world’s most popular cryptocurrency, Bitcoin now has a market capitalisation of over $600 billion, vying for position with the likes of Facebook and Tesla. It has also passed Visa’s market cap, placing it as the world’s largest financial service.

Cryptocurrencies flourished during 2020 as COVID-19 lockdown measures and fears of a global recession sent investors in search of alternative financial assets. Bitcoin in particular saw strong gains after PayPal announced that it would allow it and other cryptocurrencies to be traded on its platform, a key step towards the mainstream adoption of cryptoassets.

Overall, the price of Bitcoin surged by over 300% during 2020. In the opening days of 2021, its value has risen by almost $5,000, with an 18% jump on Sunday morning before gradually receding.

Equally impressive, new statistics indicate that Bitcoin’s 30-day average daily trading volume between 1 December and 31 December reached $39.1 billion, higher than the average daily trading volume of Apple, Amazon, Microsoft, Facebook and Alphabet stock during the same period ($37.68 billion).

“What’s happening now – and it’s happening faster than anyone could ever imagine – is that Bitcoin is moving from a fringe esoteric asset to the mainstream,” said Matt Hougan, chief investment officer at Bitwise Asset Management.

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“If it’s going mainstream, there is just so much money on the sidelines that is going to have to come in and establish a position that it leaves me very bullish for 2021.”

In the coming weeks, US PayPal account holders will be able to trade digital coins including Bitcoin, Litecoin and Ethereum. PayPal also plans to expand trading options to Venmo and some new countries in the first half of the new year.

Finance Monthly hears from Lynne Darcey-Quigley, founder and CEO of Know-It, on the problem of fraud plaguing UK firms and how they can protect themselves from it.

Throughout the 1960s, Frank Abagnale famously faked eight different identities, including a pilot, lawyer and a physician, to gain free flights and defraud banks. There was subsequently a film titled ‘Catch me if you can’, starring Leonardo DiCaprio, made about his life and how he conned people. Arguably his most ingenious (or in fact worrying) tactic was his ability to write personal cheques on his own overdrawn account. This, however, would work for only a limited time before the bank demanded payment, so he moved on to opening other accounts at different banks, eventually creating new identities to sustain this charade and continue to defraud financial institutions.

Although time has passed and technologies and systems have been put in place to weed out the Frank Abegnales, the issue of fraud and financial crime continues to linger. This has been made plainly obvious throughout the COVID-19 pandemic, where the Coronavirus Bounce Back Loan (BBLS) scheme has been plagued by fraudulent applications.

As a result, the National Audit Office (NAO) has estimated that taxpayers could lose as much as £26 billion from fraud, organised crime or default, as up to 60% of the loans may never be repaid.

An all too familiar story

For businesses across the UK, this may not be a surprise. Even before the pandemic, a study from PwC found that half of all UK companies had been the victim of fraud or economic crime between 2016 and 2018. The research found that for more than half of the organisations affected, criminal activity resulted in losses of around £72,000.

Fraud and financial crime, therefore, has clearly not been born as a result of the ongoing COVID-19 pandemic, nor will it diminish once the virus has passed. The case of COVID-19 loan fraud should, therefore, provide businesses, government and other stakeholders with a wake-up call and a chance to reflect on how they can reduce the risks of falling victim to financial fraud. But what lessons can these stakeholders learn and what needs to change?

Even before the pandemic, a study from PwC found that half of all UK companies had been the victim of fraud or economic crime between 2016 and 2018.

Always do your homework

We understand that the issuing of COVID-19 loan schemes was a unique situation. Lenders have been under huge amounts of pressure to approve loans quickly and help support struggling businesses. Unfortunately, this simply doesn’t give them the time they need to conduct the checks that are needed to protect themselves from fraud and financial crime. Yet this echoes similar findings from PwC’s research from a few years ago: UK organisations are generally not doing enough to prevent fraud, with only half carrying out a fraud risk assessment in the last two years.

Regardless of whether your organisation is an SME, a large enterprise or a national government, basic and thorough credit checks must be in place as part of the process of protecting your business. Through establishing the validity of a customer your business is looking to establish a working relationship with, you are immediately reducing the risk of exposing yourself to fraud or financial crime. But why stop there? Compiling credit reports and verifying a business’ status on Companies House before committing to a commercial arrangement are also effective measures that can help protect your business.

These checks go a long way for business owners, particularly SMEs, as late payments and of course, fraud, can cause disruptions to business cash flow. Cash flow issues can prove fatal for smaller business owners, which is why credit checking, building credit reports and validating other businesses and its financial status is key to survival.

Ensuring a smooth recovery

When it comes to government support loans, businesses do not have to begin paying back the money from May 2021 onwards. However, this time large time period isn’t a luxury when it comes to collecting payment from customers. Consequently, implementing a responsive and robust debt recovery process is essential to minimising the risk of non and late payment issues, helping business protect their cash flow and minimise risk.

Agreeing and making a record of credit terms in advance ensures that no business transactions can be disputed, which could later lead to businesses losing out on payment from customers Under the BBLS, the government provided lenders with a 100% guarantee for the loan. For SMEs in particular, this approach simply cannot be taken, especially if debt recovery steps, such as ensuring credit terms between businesses, are not agreed and recorded beforehand.

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Chasing owed payments is far easier after the checks to validate a business have been made. Businesses can take measures which include; credit holding, which involves pausing services to a client until they have paid. Issuing final notices is also essential to the debt recovery process, the final correspondence before taking up legal proceedings usually resolves any delayed payment issues. The problem facing the government is that fraudsters applying for support loans will do so illegitimately, therefore remaining anonymous and slipping through the debt recovery net. This reiterates the importance of verifying and checking recipients during the early stages of a business agreement, as this eases the rest of the debt recovery process.

A final word on SMEs

However, it is not just the initial checks before the first commercial transaction that must be invested in. To truly protect themselves, infrastructure must be put in place to continually monitor and chase customers. In larger businesses it is common to have a designated department or employee who will handle this process – usually this person will be known as a ‘credit controller’. Yet, we understand that many – particularly smaller businesses – do not have the resources readily available to continuously check the credit status of their customers and conduct due diligence.

Fortunately, this is where advancement in technology play a critical role. For example, by using technology to automate the credit control process, this can help businesses streamline this process so they can credit check and monitor and conduct due diligence, all from one place. Automating this process, firms can collate the information and identify areas of concern, without expending huge amounts of time and precious resources, ultimately helping them to limit risk and reduce fraud.

Finance Monthly hears from Jay Floyd, Senior Principal Financial Crime Consultant at ACI Worldwide, on the threat faced by banks and countermeasures they can employ against it.

Fraudsters are natural opportunists and extremely innovative with their methods. Whether through authorised push payment (APP) fraud scams, phishing attacks or even targeting vulnerable people during the COVID-19 crisis, they will always find new ways to make money with no remorse.

Making the task of protecting consumers and companies from fraudsters relentless activities an increasingly challenging one for banks. Especially during a time of global crisis and uncertainty along with growing payment channels through Open Banking.

However, by thinking seriously about how they (banks) can embrace strategic anti-fraud technologies and ensuring that their Open Banking platforms are secure by engaging with QTSPs (Qualified Trust Service Providers), banks can protect their customers against fraudsters both today and tomorrow.

Fraud is constantly evolving and growing

A decade ago, deploying malware was the easiest and most common method of getting into someone’s account. But as banks have strengthened their technical defences, fraudsters have increasingly turned to social engineering. Whether via email or telephone, many criminal gangs now impersonate a victim’s bank or other authorities like the police, persuading the victim to hand over account authentication codes or even make fraudulent transactions themselves.

Taking this one step further, some fraudsters are even combining remote access trojans with social engineering. Persuading victims to install malicious software on their device so they can carry out their fraudulent activity without needing to engage with the victim in the future. With such scams constantly evolving, it is increasingly difficult for banks to combat fraud.

Fraudsters are natural opportunists and extremely innovative with their methods.

As such, instant payments fraud is growing at an alarming speed. And while it should be acknowledged instant payments have revolutionised banking – in an era of pandemics, it’s no exaggeration to say we are dealing with a payments pandemic.

Recent figures from UK Finance add stark colour to this picture. Card fraud (both debit and credit) accounted for £288 million in the first half of 2020 – an 8% decrease compared to the same period in 2019. However, cases of remote banking fraud and APP fraud both increased – by 59% and 15% respectively. When combined, this amounts to £287.5 million lost to remote banking and APP fraud in the first half of 2020 – almost on par with card fraud. Though there are industry initiatives such as ‘Confirmation of Payee’, in the very near future, it is expected that remote banking and APP fraud will overtake card fraud across Europe and UK. And this is worrying.

Engage with QTSPs to mitigate fraud

The rise in remote banking fraud may further be accentuated by the proliferation of open banking services. But despite the fact fraudsters will look to exploit weakness in Open Banking, this relatively new service should be embraced. Its benefits cannot be underestimated or denied. In fact, recent OBIE data suggests 50% of UK small businesses now use open banking services to see their accounts in real time, forecast their cashflow and issue paperless invoices to clients. But banks do need to think seriously about weakness and loop holes and how they protect customers from fraud in the coming months and years.

Fraudsters are already exploiting the vulnerabilities around open banking, especially when it comes to Account Information Service Providers (AISPs). Authorised to retrieve account data provided by banks and financial institutions, AISPs are a critical piece of the open banking infrastructure jigsaw. However, it is believed criminals are starting to create fake AISPs. In some cases, pretending to be legitimate AISPs, much like doxing, to gain access and data to customers’ accounts.

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To mitigate this risk, banks need to think seriously about how they engage with Qualified Trust Service Providers (QTSPs) to certify and validate AISPs and PISPs. QTSPs provide banks the digital certificate for AISPs and PISPs, and are themselves regulated under the eIDAS directive. But while they have been around since early 2019, QTSPs still remain largely invisible in the financial community.  Banks must configure their anti-fraud technology to monitor AISP and PISP activities and also establish a process to validate eIDAS certificates via QTSP’s to ensure that they only release access to customers’ accounts to the right people. Not only will this help banks mitigate the risk of fraudulent AISPs and PISP’s or man in the middle attacks, it will also enable them to meet a range of other electronic security requirements as well.

Real time payments bring a sense of urgency for both the fraudster and the victim of the bank. And while instant payments and open banking have undoubtedly brought countless benefits, the rising levels of fraud are real cause for concern. Fraudsters will always find new ways to make money illegally. But by ensuring they have the right fraud technology and aligning that technology to integrate with Open Banking messages and with QTSPs, banks can put themselves in the best position to detect fraudulent AISPs / PISP’s and prevent as much fraud as possible.

More than 30 countries have imposed travel bans on the UK after a new strain of COVID-19 – which may be as much as 70% more infectious than the original strain – was detected in the country. Nations closing their borders include France, Germany, Italy, the Netherlands, Austria, Belgium and Israel.

Some of the travel bans imposed on the UK will last for 48 hours as leaders formulate plans to contain the spread of the mutant COVID-19 strain, while others are set to last until the end of January.

The news has caused immense disruption to accompanied UK freight, with the immediate future uncertain for the 10,000 lorries that pass through Dover each day. British supermarket group Sainsbury’s warned on Monday of fresh produce shortages if transport between the UK and Europe is not quickly restored.

The FTSE 100, London’s blue-chip index, fell as much as 2% on the open with British Airways owner International Airlines Group and Rolls-Royce down 16% and 9% respectively. As much as £33 billion was wiped out from the index’s shares.

Germany’s DAX fell 2.3%, France’s CAC 40 fell 2.4%, and the pan-European Stoxx 600 fell 1.8%, with travel and leisure stocks taking the brunt of the sell-off.

While the FTSE’s losses fell to 1.1% by the end of the first hour of trading, the impact on sterling was more extreme. The pound, which last week reached a two-year high, plunged as much as 2% to $1.3259 and 1.6% to €1.0864.

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The impact on the pound was aggravated by continued uncertainty as to whether the UK will secure a Brexit deal ahead of the end-of-year deadline, after which existing trade stopgaps with the EU will no longer remain in effect.

Business growth consultant Daniel Groves offers Finance Monthly an analysis of the current role of offices and his predictions on how it will shift in 2021 and beyond.

COVID-19 has had a big impact on offices around the world, with lockdown guidelines and social distancing measures leading many to work from home. There have been many proponents of home working, from a better work-life balance to cutting down on the expenses of commuting. But what does this mean for offices going forward? 

While there is still going to be a need for offices beyond the pandemic, the role they play in modern businesses will need to evolve to adapt to the ‘new normal’. These are some of the ways that offices are likely to change in the future to meet the demands of running a business while also maintaining the wellbeing of staff. 

The office is still important

In spite of the rise in remote working, offices are still important to how businesses operate. Many people like the idea of dividing their work life between in-person and remote, in order to gain a better split between their personal life and their career. 

What’s more, some businesses have no choice but to have a central location for staff to work from in order to comply with data security. But in order to stay relevant, businesses require their office spaces to adapt and change with the times. The offices of the future will be shaped from the lessons learned through the pandemic and this means that they need to become a space where the benefits reaped from working there are worth the extra effort required to get there.

From how they look to how they make employees feel and how staff are treated within them, offices need to be worth the journey and over the coming months as we navigate the pandemic and its aftermath, offices will be under closer inspection.

In spite of the rise in remote working, offices are still important to how businesses operate.

A new focus

The focus of the office has now changed – it’s no longer the hub of the company but rather a space for collaboration and creativity. In response to the pandemic, offices are now better suited to providing a place to come together with colleagues and brainstorm ideas. Co-working spaces need to be inspiring and encourage ideation and participation. 

So, modern businesses need to accommodate this and provide break out areas and flexible open plan spaces. Business owners need to recognise that staff need collaborative areas that can be adapted to suit different needs, both for social interactions as well as quieter spaces to concentrate. 

More working remotely

COVID-19 has resulted in more people working remotely than ever before, which has placed a greater importance on having access to good digital services. Employees need to be able to utilise software to collaborate effectively, from making better use of calendars and time management tools to arrange meetings, to using cloud software to share and access files and documents. 

It’s also vital that all staff have great connectivity in order to make the best use of these tools. Businesses need to support teamwork through the right organisational aids so that staff can coordinate and share resources efficiently.

Design focused around people

More than ever before, companies need to pay attention to how their offices are designed in order to keep staff and visitors safe. While mistakes in the office layout prior to the pandemic may have been inconvenient, it could now be unsafe or even illegal. 

“The pandemic has accelerated the move towards genuinely people-focused design,” says Roderick Altman, CEO at SAS International. “This means designing workspaces that accommodate the needs of each and every person rather than considering office workers as a herd. Some of the major issues are reduced density of people, fixed desk working, increased focus on cleanliness and closed ceilings”. 

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It’s not just desks and cubicles that need to be considered, but also other areas of the building such as meeting rooms, canteens, lifts and corridors. 

Hot desking is no more (for the moment)

Hot desking was popular before COVID-19 hit, but it’s no longer a safe option. For companies with smaller offices, a better and safer option may be to consider that only certain people come into the office while others work remotely. But there’s no one-size-fits-all solution and the answer will vary depending on which talent is required for the business and how much collaboration is necessary. 

Even within each business, the needs could vary across different teams and geographies, and varying demands throughout the year. Offices can still be used as a central meeting hub for everyone, but if there isn’t the space for every member of staff to work safely, then businesses need to offer an alternative. 

Final thoughts

The uniqueness of our current situation means that there’s no template for how to move forward or work post-lockdown. The key to success is flexibility and encouraging collaboration between staff, while having continuity measures in place should a second wave hit. From changing office layouts to create a safer work environment to providing staff with the digital tools they need to maintain contact and collaboration with colleagues, businesses need to be willing to adapt and utilise office premises in different ways to adhere to the guidelines as they evolve.

UK telecoms giant TalkTalk has agreed to a £1.1 billion takeover deal proposed by Toscafund – its second-largest shareholder – and private equity investors Penta.

TalkTalk announced details of the takeover bid early on Thursday. Should they approve the deal, TalkTalk investors will receive 97 pence per share, a 16.4% premium on its share price on 7 October when talks first began. If this occurs, TalkTalk will be de-listed from the London Stock Exchange.

Including debt, the deal values TalkTalk at around £1.8 billion. Toscafund, which is controlled by hedge fund tycoon Martin Hughes, already controls a 30% stake in the company.

Sir Charles Dunstone, chairman of TalkTalk, spoke optimistically about the benefits the deal would bring for the ISP. “Being a private company would allow us to accelerate adoption and focus on our role as the affordable provider of fibre for businesses and consumers nationwide,” he said.

“The telecoms industry is going through a fundamental reset and we are keen to play our part in it.”

TalkTalk is a budget broadband and phone provider that provides services to around 4.2 million UK customers. In addition to announcing the takeover deal, it published its half-year results on Thursday, showing a statutory pre-tax loss of £3 million during the six months leading up to 30 September compared to a £29 million profit during the same period in 2019.

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The company said it had been heavily impacted by the COVID-19 pandemic, which had left engineers unable to visit customer premises to connect them to the network. It also noted that the closure of third-party overseas call centres had been a detriment to its customer service capabilities. While revenues from phone calls also slipped, the broadband provider noted that data usage had increased more than 40% during lockdown periods.

Shares in TalkTalk were up 1.7% in early Thursday trading. The Toscafund-Penta takeover is slated to take place in the first quarter of 2021.

Jamie Johnson, CEO of FJP Investment, offers his thoughts on the trends that will influence the UK real estate market in the year to come.

With the Pfizer/BioNTech vaccine starting to be administered to UK citizens, it’s safe to say that the end of COVID-19 could be in sight. After almost one full year of lockdowns, social distancing measures and job retention schemes; we may be soon returning to something resembling normality.

However, our transition to the “new normal” will be notably different to the pre-COVID-19 environment. Tax reforms and spending cuts are looking likely, as the UK government scrambles to make up the shortfall for what it spent combating COVID-19’s economic impact.

The UK has been long been heralded as one of the world’s leading investment destinations. There is good reason to believe this will remain the case, despite the obstacles on the horizon. A recent piece of research commissioned by FJP investment revealed that 42% of investors are confident the UK shall remain a global investment hub following COVID-19 and Brexit.

So, given all of this, which assets have investors been retreating to amongst all of this uncertainty? Based on what we have been witnessing at the moment, there is no denying that residential property remains high on the list for sophisticated investors.

Spotlight on property

Amidst all the market volatility and global uncertainty witnessed throughout 2020, British real estate has demonstrated strength, resilience, and perseverance.

In fact, market demand for property has been rising at an impressive rate. If we use house price growth as measure of buyer demand, this is evident. Halifax’s House Price Index for November revealed that house prices have risen annually by 7.6%.

Amidst all the market volatility and global uncertainty witnessed throughout 2020, British real estate has demonstrated strength, resilience, and perseverance.

Understandably, it looks as those some buyers are investing in UK property to hedge against any financial uncertainty. While other asset classes are suffering from high volatility as financial markets adjust to new COVID-19 developments, the price of UK property has consistently trended upwards throughout H2 2020.

This is a reflection of the positive sentiment investors hold towards bricks and mortar. FJP Investment’s aforementioned research also found that a majority (51%) firmly believe UK real estate will remain a sound investment regardless of how Brexit and COVID-19 play out. And, as the year comes to a close, I believe that this optimism will soon translate into record levels of transactions. Already transaction numbers are high, with October 2020 witnessing approximately 8.1% more transactions than October 2019. What’s more, with the Stamp Duty Land Tax (SDLT) holiday coming to an end on 31 March 2021, we are likely to see transactions numbers spike further.

The SDLT holiday, implemented in June and potentially saving house buyers up to £15,000, has been credited with successfully luring investment back into British real estate after the first summer lockdown earlier this year. Given the considerable savings this tax break allows for, I suspect that investors will flock to property in the new year before the holiday ends.

Constructing new builds to meet demand

With regards to infrastructure and potential new builds, it’s up to the government as to whether they wish to push forward with their plans from earlier this year for a "housebuilding revolution". The UK is still suffering from a mis-matched housing sector, with demand far outstripping supply, so fulfilling the promises made during the 2019 General Election to ‘level up’ the nation via pouring billions into new builds should be welcomed by investors and seasoned property experts alike.

Allocating such funds for infrastructure and housebuilding not only fulfils electoral pledges but is paramount for facilitating a wider post-COVID-19 economic recovery. For this reason and others, I’m confident that Prime Minister Boris Johnson will push forward with previous plans to help fund construction and development projects in 2021.

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Regarding other plans, such as extending the SDLT holiday or implementing negative interest rates, it is difficult to make assured predictions at the moment. However, for property investors and housing developers, I’m personally optimistic about what 2021 may hold. Given the incredibly strong performance of UK property throughout this year’s pandemic, I’m confident that this sector will remain a prime destination for investment and a source of impressive long-term gains for the foreseeable future.

The number of people being made redundant in the UK reached a record high in October amid the second coronavirus wave, new data has revealed.

The Office for National Statistics (ONS) said on Tuesday that redundancies rose to 370,000 in the three months leading up to October as jobs were cut in the run-up to the withdrawal of the government’s furlough support scheme which had been slated to close at the end of the month. The wage subsidy scheme was then extended until the end of March 2021 as rapid acceleration in COVID-19 infections prompted a second national lockdown in England and tighter controls elsewhere in the UK.

ONS data revealed employment has fallen at its fastest pace in a decade. There are now 819,000 fewer people on UK company payrolls than there were in February when the pandemic first hit, the employment having risen to 4.9% in October.

Meanwhile, the number of people claiming unemployment- and low pay-related benefits reached 2.7 million, an increase of 64,300.

Worst affected by the rise in redundancies were young men aged between 18 and 24, with unemployment levels in this bracket having risen by 39% since February. The worst-affected sectors were hospitality and retail, which have respectively shed around 297,000 and 160,000 jobs this year.

Business chiefs have warned that the rise in unemployment in the UK is likely to accelerate further as London and other parts of the UK prepare to enter Tier 3 of England’s regional lockdown system, which will see pubs, restaurants, cinemas, museums and other venues shut down from Wednesday. This will mark the third time these venues have been forced to close since the onset of the pandemic earlier this year.

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“While the roll-out of the vaccine has buoyed employers, it won’t automatically undo the damage done to their businesses by the pandemic,” warned Tej Parikh, chief economist at the Institute of Directors, who suggested that cutting employer national insurance contributions could help their cashflow troubles and keep the furlough scheme’s new March wind-down date from becoming another financial cliff-edge.