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Scotland Hosts Ethical Finance Summit

Earlier this month, Scotland hosted the Ethical Finance Summit organised by the Global
Ethical Finance Initiative (GEFI) which organises and coordinates a series of
programmes promoting finance for positive change and bringing together leaders in
Islamic and conventional finance from around the world.

The summit aimed to “help define and shape the transition to a sustainable financial
system where finance delivers positive change”. With the Bank of England recognising
climate change as a key financial risk and growing recognition of sustainable investment
and finance, both conventional and Islamic finance practitioners have started to pay
attention to not only the economic returns but the social impact of their investment and
finance decisions.

Key partners of the summit included the United Nations Development Programme
(UNDP), the Scottish Government and the Bank of Scotland. Hosted in the capital of
Scotland, Edinburgh, the summit attracted over 400 finance practitioners from across
the globe discussing a range of topics including ethical investing, Islamic finance,
impact and sustainable finance.

Keynote speaker at the event, First Minister of Scotland, Nicola Sturgeon, who took the
summit as an opportunity to introduce the ‘Green Investment Portfolio’, a new
investment programme, estimated to be worth £3 billion over a three-year period
providing capital to local authorities and third sector organisation committed developing
projects to help the country achieve a net-zero economy by 2045.

The First Minister stating, “The Green Investment Portfolio supports our ethical finance
ambitions by matching projects which are reducing emissions with investors so we can
fully maximize their potential and promote them globally.

This could include projects that are making buildings more energy efficient, reducing
industrial emissions or even restoring peatlands.”

Scotland’s ambitious Green Investment Portfolio is aligned with the UK’s commitment
to reducing greenhouse gas emissions and it was only May of this year the UK
parliament declared a climate change emergency.’ Expect green investment strategies
including green bonds and sukuk to get more attention in the coming months.

Courage, Compassion and Confidence

So proud of the Know You More team and founders Tim Mart and Chirag Mehta for winning The Scottish Herald Digital Business Awards in the Social Enterprise category. Having won the European Mentoring and Coaching Council (EMCC) International Award for Coaching last year, it was great to see Know You More being recognised on home turf.

With years of effort and dedication in developing a digital platform that seamlessly delivers executive-level coaching to organisations in the simplest, most cost-effective way, Know You More is redefining how coaching should be delivered. Thank you to all our partners, coaches and of course our clients that entrust us with helping their people improve mental wellbeing, accelerate leadership development and support career transition.

Special thanks to Evelyn Walker our Strategic Board Adviser who has been a true champion of our vision to create a future in which people have the courage, compassion and confidence to be their best self and inspire others around them.

Congrats to all the finalists and winners at The Scottish Herald Digital Business Awards


Edinburgh, 29 October 2019

Know You More (“Know You More”), U.K.’s emerging leader in executive-level coaching at scale was awarded the Scottish Herald Digital Business Awards in the Charity and Social Enterprise category on Oct 23rd, 2019 at a ceremony in Glasgow, Scotland.

With a vision to create a future in which people have the courage, compassion and confidence to be their best self and inspire others around them, Know You More has been providing virtual coaching since 2016 helping people develop the essential skills and behaviours to improve leadership, mental wellness, and support career transition.

Tim Mart, CEO and Co-founder of Know You More, said: “We’ve had an opportunity to work with great organisations such as the NHS, St. Andrews University, Siemens recently to help create responsible leaders of today and tomorrow. The award is wonderful recognition for all the hard work of the team and my Co-founder Chirag Mehta over the past four years. Having won the European Mentoring and Coaching Council (EMCC) 2018 International Award for Coaching last year, it’s great to get the local recognition for our efforts and a testament to the amazing community of qualified coaches we have on the platform.”

Suhail Ahmad, Executive Chairman of Know You More, said “Congratulations to all the winners and finalists of the Herald Scotland 2019 Digital Business Awards. It was an outstanding group of trailblazing businesses and organisations across Scotland. We were honoured to take home an award this year and will continue to contribute to digital excellence in Scotland and beyond.”

The awards event was attended by business leaders from across Scotland reflecting the range of organisations from social enterprise to corporates who were recognised for their digital work. The Digital Transformation Director of Newsquest Scotland, organisers of the event welcomed the attendees saying, “We social responsibility we have to society and to ourselves, to make our work inclusive and a force for good is surely of critical importance more than ever before.”

Other Digital Business Award winners across several categories included PODFather, Intelligent Mobile, DYW Glasgow, Blue2Digital clients Simon Howie and The Scottish Butcher, Enterprise Screen for The Power of Attorney campaign, After Digital for Chase Distillery, Storm ID (several awards), Neu, Barry Feam, Jenn Hood and Brian Corcoran.

Know You More is a company based in Scotland, delivering the simplest way for organisations to provide their people with executive-level coaching at scale. It’s on a mission to create thriving cultures within organisations and communities by combining the power of real human conversation with innovative technologies. With clients in the U.K. and abroad spanning both the corporate and public sector, including National Health Service (NHS), Siemens, Novartis, Ocado, St. Andrews University and many more.

Suhail Ahmad, MBA – Executive Chairman
+44 131 208 2786

ICO vs IPO – How do they compare?

I’ve participated in IPOs and recently ICO’s and felt investors needed to better understand the key differences between the two especially as cryptocurrency mania sweeps the world.

So let’s begin with an ICO which stands for an initial coin offering. A coin often referred to as a cryptocurrency gives the owner of that coin some future utility on a platform which is being built upon Blockchain technology. In future presentations, I’ll go deeper into the mechanics of how a coin is put together and the process by which it comes to market and is listed on a digital exchange where you can trade it just like shares.

IPO or an initial public offering is the traditional form of raising capital from the public by the issuance of shares in a company. Despite ICO funding skyrocketing to almost $5 billion in 2017, it is still a small fraction of the total IPO financings which were a strong $196 billion last year, up 44% from the previous year.

The video presentation below introduces the ICO concept and compares 10 key features of an ICO with a traditional IPO to help investors understand both the opportunity and risks associated with participating in either one.

Disclaimer: This article is for informational purposes only and does not constitute an offer to sell or a solicitation to purchase securities in any country or jurisdiction. It is not financial or investment advice.

8 Technology Predictions for 2018

I’ve been “working” in technology since 1997 when as a student I landed a part-time job at our University of Calgary’s computer store (called Microstore, if I recall correctly). My working days were filled with Windows 95 troubleshooting, advising on software sales, and helping professors and fellow students configure their computers.

There were no smartphones, tablets, let alone drones and autonomous cars. This thing called the ‘internet’ was just starting to get serious. Fast forward twenty years later, we are at the beginning of another leap forward in technology with artificial intelligence (AI), the blockchain, and other disruptive technologies will start to see the daylight of commercial feasibility.

I’ll keep my predictions for 2018 short and sweet. A few will seem obvious and to keep things interesting, I’m throwing in a few far-fetched predictions which though unlikely are possible.

1. Data protection and consumer privacy will be big news by mid-year as GDPR goes into effect on May 25th, 2018

2. Decent augmented reality (AR) headsets will be hot Christmas gift ideas for next year. To note is the One AR headset by MagicLeap which will be released for developers next year after six years of development and $2bln in funding!

3. Initial coin offerings (ICO) will calm down as most regulators will deem them as securities. Bad news in the short-term but great news for the long-term development and funding of blockchain platforms that will be able to issue tokens or cryptocurrencies to build genuine solutions to reduce transaction costs and increase the speed of delivery.

4. Global Cybersecurity wars will get nastier. Unfortunately, the tension between North Korea and the United States is likely to escalate. North Korea knows it does not have a military advantage but has the cyber defensive advantage because of the tight state control of its network. We could see the first major cyberattack on US critical infrastructure as a warning shot by the North Koreans if they feel threatened by a military strike.

5. Fund managers will jump on board cryptocurrencies as regulation comes to force. This will hopefully shift the market from speculators to investors and support the long-term development of digital platforms and assets.

6. Move from discussion of the Blockchain to distributed ledger technology (DLT).Most don’t realise that not all distributed ledgers have to necessarily employ a chain of blocks to successfully provide secure and valid achievement of distributed consensus: a blockchain is only one type of data structure considered to be a distributed ledger.

7. Smart devices with Artificial Intelligence (AI) will start to hit the main street. These will be physical devices such robots and drones that will exploit AI to deliver advanced behaviours and interact more naturally with their surroundings and with other people.

8. Bitcoin prices will collapse to $5,000 or less but doesn’t mean they could hit $50,000 in a final euphoric manic rally. The collapse will not necessarily be the result of all cryptocurrencies falling out of favour but the marketplace realising that Litecoin or Ripple cryptos are much more effective then bitcoin for transaction purposes. (Expecting some hate mail from bitcoin fans for this prediction!)

Wishing you and your family a happy, healthy, and prosperous New Year!

UK strengthens its position as Islamic Finance Centre


Islamic finance in the UK has continued to grow despite the economic uncertainty in the aftermath of the Brexit vote last year and the snap election in June. Islamic banks continued to demonstrate continued strength with record earnings from the Al-Rayan Bank, the country’s largest Islamic financial institution by assets. The first Shariah-compliant crowdfunding company, Yielders was approved by the Financial Conduct Authority, opening the way for other Islamic start-ups to meet the investment, banking, and financing needs of over three million Muslims across the country.

2017 Review

Boardroom conversations over the past year have swirled around the impact of Brexit on the financial services industry as an exit from the European Union (EU) could result in tens of thousands of job losses in the sector as firms shift operations into the EU. However, concerns about London losing its dominance as a global financial centre appear to be overblown as the sector continues to show resilience and particularly the Islamic finance industry is growing stronger by the day.

The UK made history in the summer of 2017 with the Royal Mint becoming the world’s first mint to achieve compliance with the Shariah Standard on Gold set out by the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI). Considering the standard was developed in cooperation with the London-based World Gold Council (WCC), the UK clearly leveraged its leadership in commodity trading to attract Islamic investors. Who can now use the service to buy, store, and sell the Royal Mint’s bullion coins and bars securely online.

The Islamic banking footprint in the UK grew in 2017 led by Birmingham based Al-Rayan Bank opening a dedicated commercial banking office in London as well as three retail branches, including Wembley, Bradford, and its first branch in Scotland (Glasgow). The expansion was on heels of a robust earnings report in which Al-Rayan delivered a 32% increase in pre-tax profits and increased the bank’s’ balance sheet by an astounding 43% year-over-year with total assets of the bank reaching £1.4 billion.

In addition to traditional Islamic banks, innovative financial technology (FinTech) companies are also starting to take shape in the UK with the first Shariah-compliant FinTech company Yielders getting approval to provide online property crowdfunding investments. Another start-up Ummah Finance is planning to launch the country’s first completely digital bank and would effectively become the first Islamic challenger bank in the UK if successful.

2018 Preview

Outlook for the sector remains strong as the CityUK report issued at the IFN Islamic Forum in London in September titled “Global trends in the Islamic finance and UK market” further reinforced the sector’s confidence in London remaining the leading western centre for Islamic finance despite the uncertainty poised by Brexit.

It was at the forum in London that Mr Stephen Barclay, the economic secretary to the Treasury announced in his keynote speech, the government’s commitment to Islamic finance with the intent to reissue the country’s sovereign Sukuk when it renews the following year.

Additionally, there are trials underway for a commodity Murabaha financing product to provide shariah-compliant funding to small-medium enterprises (SME) across the country. The product is being developed by Liberis and backed by the UK government-supported British Business Bank. This would be one of the first Islamic SME short-term finance products in the UK and breaks new ground in Islamic finance for UK firms.

Shariah-compliant student financings, as well as the potential of regeneration projects across the UK, remain promising areas for Islamic finance to solve in the coming years. We may also see initiatives in Islamic insurance which has remained low-key despite the formation of the Islamic Insurance Association of London several years ago to promote the sector.

Expect to see further breakthroughs in commercial financing and investment products next year with Islamic FinTech startups taking root to bring innovative solutions to the marketplace. Supporting the over twenty banks in the country already providing Islamic products including the five fully shariah-compliant institutions.


Islamic finance has much more room to grow in the UK and offer Muslim consumers and businesses a greater choice. The regulations continue to be accommodating and will evolve to allow more innovative FinTech solutions to provide digital low-cost alternatives in the marketplace as consumer awareness and adoption of Islamic finance grows.

The UK no doubt will continue to be a Western centre for Islamic finance despite Brexit. And it can be argued the distinctiveness of London can perhaps be enhanced by Brexit as it unshackles itself from EU regulation and leverages the depth of its Islamic finance expertise and talent to continue supporting the development of the sector.

This article was written by Suhail Ahmad and first published in the IFN Annual Report 2018 (pg. 104) which can be downloaded free of charge at

There is no ‘cryptocurrency’

Ok, I know what you’re going to say:

“But Suhail, everyone is talking about cryptocurrencies! How can you say they don’t exist?”

You’re right, all the media and many Tom’s, Dicks, and Helen’s are talking about cryptocurrencies. When they are in fact talking about crypto coins.

Let me clarify. The word “currency” is derived from Latin word “currens” meaning “in circulation” and in economics currency is defined as a system of money (monetary units) in common use and recognised as legal stores of value and form of payment (i.e. they cannot be refused as payment for debt) by a country.

Thus we have foreign exchange markets and can easily trade goods and services among nations. The global currency markets have an average daily trading volume of over $5 Trillion compared to the largest crypto coin, Bitcoin trading volume hitting a daily trading volume of $4 billion just last week as it broke through the $11,000 mark.

Now that we’re clear, let’s talk about crypto coins.

Crypto coins are similar to loyalty points and can indeed be a store of value. They can be exchanged for goods and services (in a limited capacity) and as the crypto-coin market matures and is recognised by governments, they could one day become a legitimate “currency.” Particular Bitcoin, which is the first and largest coin by market capitalisation. It is the gold standard of crypto coins.

Should we care about crypto coins? Is it too late to invest in crypto coins?

Yes, and No.

Crypto coins are here to stay and will become a legitimate asset class as regulators finally figure out how to protect consumers and standardise sale and trading of crypto coins.

As an investor, you have to be very selective and extremely careful investing in crypto coins. It is indeed risk capital and thinking like a long-term investor, not a speculator, is how I’m playing it.

I’ve been tracking the crypto-coin market more closely over past six months and have bought crypto coins and actually participated in my first Initial Coin Offering (ICO) last month.

Unfortunately, most people are treating crypto coins as poker chips and the crypto-coin market as a casino. Which it has become to a large degree. It is a bubble which could get a lot bigger before it either pops (devastation) or deflates in relatively non-destructive manner. We would be lucky if the latter occurred and if you were fortunate (or unfortunate) to have lived through the dot-com bubble from 1996 – 2000, will indeed see the similarities.

Look forward to sharing my journey and insights to help bridge the knowledge gap and help you cut through the noise with a series of articles and presentations over the coming weeks for the SiAlpha YouTube Channel. SiAlpha helps investors understand, evaluate, and invest in private and public technology companies worldwide.

I’ll be helping their subscribers understand crypto coins and blockchain in particular. As well as other emerging technologies such as AI and robotics which will reshape the world of business and finance over the next decade.

In the meantime, to learn about the types of crypto coins in the marketplace and their insane price movements, my team at the Financial Network have launched an impartial information and price quoting system at

So next time you hear anyone call Bitcoin a currency or talk about “cryptocurrencies.” Please stop and correct them, it’s crypto coins mate!

Comments, questions, and feedback most welcome.

Suhail Ahmad has over 20 years of experience in financial services and technology working in Canada, U.K. and the Middle East. In addition to his start-up adventures, Suhail is the Founder of the Financial Network, Partner at Exolta Capital, and Head of Technology Practice at Gateway professional services. Email [email protected]

How NOT to buy Bitcoin

I wrote last week about crypto coins or so-called cryptocurrencies. Read here if you missed it and stated:

“Unfortunately, most people are treating crypto coins as poker chips and the crypto-coin market as a casino. Which it has become to a large degree. It is a bubble which could get a lot bigger before it either pops (devastation) or deflates in relatively non-destructive manner. We would be lucky if the latter occurred and if you were fortunate (or unfortunate) to have lived through the dot-com bubble from 1996 – 2000, will indeed see the similarities.”

Now the chatter and media noise around the mother of all crypto coins, bitcoin has become deafening. Wallstreet has joined the fray with the first bitcoin futures contracts trading this morning in Chicago.

What are futures?

Futures are a way to profit from short-term price movements, both up and down, in an asset without actually owning the underlying asset. A futures contract is a derivative product that gives you the right to buy a certain commodity or financial instrument (like bitcoin) at a later date, for the agreed price now on the condition, you agree to keep that promise and take delivery of the asset in the ‘future.’

A fun way to learn about futures and how you could make a ‘killing’ or ‘lose your shirt,’ consider watching the movie Trading Places. One of my favourite movies, Trading starring Eddie Murphy and Dan Akroyd puts the futures market at the centre of the plot. It tells the story of an upper-class futures commodities broker and a homeless street hustler who unknowingly are made part of an elaborate bet by the owners of a futures trading firm. Essentially they swap their places to see if anyone can be taught to trade. The storyline is a modern take on Mark Twain’s classic 19th-century novel The Prince and the Pauper.

Not to digress. In the case of bitcoin futures, one contract size is equivalent to 5 bitcoins with a notional value of around $80,000 based on today’s bitcoin price. So you would buy a futures contract expiring either on the last day of the month in January, February, or March. The futures have already jumped higher and triggered circuit breakers in overnight trading.

Futures are not the way to purchase bitcoin for individual investors and unless you’re a professional speculator, trader or using it as a hedging mechanism against your millions of dollars in bitcoin, avoid futures like the plague!

If you want to own bitcoin, have a conviction or thesis on why you believe it’s fair value is not being reflected in its current market price. Be an investor. An owner. Purchase the asset with cash (risk capital) and sell when you believe the asset has reached fair value. There are many relatively safe exchanges to buy bitcoin and other currencies as well as Coinbase, perhaps the best retail platform to buy small amounts of crypto coins.

With the market capitalisation of all crypto coins above $400 billion. I’m not expecting the excitement and speculation to abate anytime soon. I’m not buying any bitcoin at these prices. I believe there is relatively better value in other crypto coins that are worthy of consideration as an investment.

This article is for information purposes only and does not constitute investment or financial advice. The views and opinions are my own and not necessarily those of my partners, associates, or affiliates.

Suhail Ahmad has over 20 years of experience in financial services and technology working in Canada, U.K. and the Middle East. He is a trusted adviser on business growth, innovation, and value creation in a digital economy. For more information, email [email protected]

Discover a World of Opportunities

This week the Institute of Directors (IoD) and the Scottish Business Network (SBN) will be hosting Scottish International Week. An amazing forum to learn and interact with some of Scotland’s leading businessmen and women with a track-record of success in new markets such as the Europe, North America, Middle East, and China.

The forum will be held throughout the week, starting today Monday 9th to Friday 13th at the IoD headquarters in Charlotte Square, Edinburgh. All sessions are free to attend but registration is recommended as seating may be limited.

I have the honour of speaking on Thursday afternoon at 3:30 pm, discussing not only my experiences in Canada but also the enormous opportunities for Scottish companies to reach the emerging Islamic markets in the Middle East and Asia.

Coincidentally, Edinburgh hosted the Global Ethical Finance Forum last month which I had an opportunity to attend and explore opportunities for collaboration with businesses and investors from the region.

I’ve shared my article below for your reference and encourage you not to miss a great opportunity at the Scottish International Week to learn from, connect to, and network with Scotland’s global leaders.

Islamic finance takes centre stage in Scotland

This article was first published in Islamic Finance news Volume 14 Issue 39 dated the 27th September 2017.

Over 300 business and finance leaders gathered in Edinburgh to attend the 2nd Global Ethical Finance Forum (GEFF) on the 13th and 14th September at the RBS Conference Center. The theme of the event was ‘Merging profit with purpose’.

Kirsty Britz, the director of sustainability at the Royal Bank of Scotland, opened the forum with a welcoming address that would set the stage for the two-day conference. “We must encourage ethical choices as a norm rather than the exception.” Key speakers at the GEFF this year included Keith Brown, the cabinet secretary for economy, jobs and fair work in the Scottish government; Nurlan Kussainov, CEO of Astana International Financial Center (AIFC) Authority; Jameel Ahmad, the deputy governor of the State Bank of Pakistan, and many more.

During the various panel sessions and keynote speeches, the forum covered the interplay between ethics, faith and finance. There were discussions on impact investing, sustainable development and green bonds, as well as an innovation showcase near the end of the forum which highlighted the latest innovative tools in ethical finance. Discussions on socially responsible and impact investing brought out the challenges facing asset managers with Anthony Hobley, CEO at Carbon Tracker, stressing: “We need to see a paradigm shift whereby ESG [environmental, social and governance] reporting becomes the norm and is just an integral part of any financial decision. For that to happen, it needs to be seen as critical to the management of financial risk and [to] achieve better returns.

This goes to the Holy Grail at Carbon Tracker, how does one translate the environment, climate energy and transition risk into quantitative financial risk and opportunity? To achieve this, ESG needs to be much more forward-looking than backwards-looking. It must be capable of stress-testing business models against foreseeable risks and transitions and capable of flagging the collapse in valuation we have already seen in US coal European energy utilities.”

As an example, green bonds came into prominence in 2007 when they were launched by a few development banks including the World Bank. Ten years later, the tax-exempt bonds continue to be suited to long-term projects. Preliminary estimates for green bond issuance in 2017 by HSBC, Moody’s Investors Service and Climate Bonds Initiative are all in excess of US$100 billion and demonstrate the massive opportunity for the ‘ethical’ bond sector. A green Sukuk facility, a Shariah-compliant version of the green bond, can provide much-needed investment in renewable energy and other environmental projects to finance regional development projects in the Middle East.

Discussing the inherent issues facing the financial services sector, Kussainov addressed the underlying challenges facing the industry. “Within the current business model in the financial services sector, speculation and arbitration are always based on asymmetric information. People from low-income groups who have less access to the information end up suffering more.

With the financial services sector rapidly embracing technology, there is a strong belief that in the near future there will be a reduction in the current communication gap that the sector presently faces. This will bring a very positive impact on to the development of Islamic and ethical finance across the world, helping it to realize its global value proposition.” David Parker, the executive director of Financial Services at the Bahrain Economic Development Board (ECDB) who also attended the forum, was confident the relationship between Islamic and ethical finance will become stronger. “We (ECDB) have been trying to develop [the] Islamic fi nance initiative around innovation and fintech, trying to ensure the industry is fi t for purpose in the 21st century. Islamic finance (will become) an important part of the wider ethical finance agenda.”

The forum closed on an inspiring note with an optimistic outlook by Nigel Kershaw, the chair of the Big Issue, highlighting that the democratization of finance will lead to the wider adoption of ethical finance as an integral part of investing, saying: “There is a lot of talk about ethical finance and in particular ESG and social impact because it’s talked about primarily by people involved in the financial sector. I believe the democratization of capital is extremely central to what we do. Quite often, the discussion is top-down supply and product-led and for me, it often misses one of the most important social outcomes that is quite often forgotten, that is the opportunity for ordinary people to invest and save in creating a better place to live for themselves, their families and the community around them. It’s not about mainstreaming ethical finance; it’s all about bringing the mainstream to us.”

The GEFF plays an instrumental role in connecting thought leaders and stakeholders from the responsible and Islamic finance world to learn, collaborate, and work toward a mutually inclusive desire to develop finance as a force for good.

Let the Show Begin

Waiting for my youngest son (above) to participate in his first nativity play yesterday afternoon, I tried not to look at my Bloomberg app. Or think of the roller-coaster the financial markets could embark on if we were to get a surprise from the U.S. Federal Reserve later in the day.

When my son arrived in the gym hall, I could see his excitement with dad in the front row. I arrived early just to make sure I’d get a good seat (and parking). As the older kids and teachers started their introductions, etc. I could see my son’s excitement start to wane as he sat with his classmates waiting for the show to begin.

Bump up not lift-off

Just like the millions of professional investors who literally were sitting on their hands for most the day waiting for Janet Yellen and the Federal Open Market committee at the same time. Providing us their interest rate decision so we can move on with our day. Which makes me wonder, why they don’t hold the conference first thing in the morning and help reduce the anxiety on trading floors worldwide!? One of many humble suggestions I can give to central bankers if I were to get in a room with them.

So now we finally have the much-anticipated interest rate hike in the U.S. It’s not a major move. However it’s the potential of it becoming the beginning of the end of low-interest rate environment that has some economists and “fed watchers” all excited.

But what does it mean for most investors and business managers? Based on my crystal ball and the Economist in me (yes, I do have a degree in Economics), I don’t think we’re going to be out of the low-interest rate environment anytime soon.  The U.S. economy is not healthy enough to be able to sustain series of interest rate rises based on the data I’ve seen. Sure the U.S. jobless rate is the lowest it’s bee in seven years. We’ve seen relatively good performance out of the U.S. economy over the past few years. But the U.S. is not immune to the global economic slowdown and will have to tread very carefully to avoid falling into a recession.

But it doesn’t matter what I or you think about interest rates. It is what it is. It will be what it will be. Many investors and business managers spend too much time trying to figure out what will happen. And often times what ends up happening is what we least expected. We simply need to understand the possible scenarios, what impact these scenarios will have on our assets or earnings, and take steps to mitigate the impact of these potential scenarios. Or preferably how to benefit and improve the financial position under these various scenarios. Difficult but not impossible.

What it means to you?

As an equity investor I don’t see any significant impact from the interest rate hike on my portfolio. Since most of my companies have low debt and I’m defensively positioned. However if interest rates do start to increase steadily over the next year, the already fully valued equity markets in the U.S. could see major price declines.

For the struggling pensioners and savers relying on interest income, it’s too early to start rejoicing. The quarter basis point increase or 0.25% is nothing to cheer about just yet. Over the past almost decade savers have been punished with huge transfer of wealth from savers to debtors by means of a low-interest rate. They will not see improvement in their miserable investment income anytime soon.

Business managers need to become more prudent with their accounts receivable to ensure they get paid timely and proactively monitor their clients financial positions. Bad debt is often a silent killer on balance sheets.

Key is to seriously consider what are the implications of a series of interest rate hikes next year. That would significantly increase the cost of borrowing despite interest rates still being near historical lows.

As a business manager you need to be conscious of potential change in interest rate environment and the economic instability or recession it could trigger. Be extremely careful taking on debt and on the other hand if requiring financing to do it sooner rather than later.

An interesting fact is that credit markets have been tightening well before yesterday’s interest rate increase. Goldman Sachs tracks a financial conditions index which measures and incorporate factors such as stock prices, credit spreads, interest rates, and the exchange rates to determine the impact of the interest rate movements.

According to Goldman Sachs estimate, it says that every 1% rise in the federal funds rate shows up as 1.5%  increase in the index.  The index sits at the highest level it’s been in five years since September of this year. Borrowing costs for business could increase dramatically over the next few years if interest rates continue to rise.

Get ready for a quite a show

But at least the December interest rate hike is done and dusted. Investors are in for quite a show as market participants (primarily economists) will continue their obsessive discussions of how much and when interest rates will rise next year.

Smart equity investors will ignore them and carefully look at valuations and rotate out of momentum and high-beta shares in favour of value and distressed equity. Speaking of distressed equity, energy shares which have taken brunt of the tax-loss selling may finally stabilize. Successful investing over the long-term is always about quality assets and cash flow.

I don’t know if the Santa Claus rally will transpire over next few weeks. But either way Mr. Market can now get the show on the road.

Happy holidays everyone!

Dundee: Going Global

I’m visiting the city of Dundee, Scotland for the first time next week. Considering I’ve been in Scotland for almost seven years, it’s quite a shame it took me so long to break the Edinburgh-Livingston-Glasgow corridor to venture out to Dundee.

I’ll be kindly hosted by RBS and joining my Managing Partner Russell Dalgleish for a breakfast seminar on Tuesday, October 18th. I will particularly be sharing my journey from across the pond and offering valuable insights for Dundee business owners and entrepreneurs evaluating growth strategies beyond our borders.

Dundee is the home of the digital gaming industry in Scotland. No doubt when I think of the city, one of the first things that come to mind is the infamous Grand Theft Auto (GTA) video game. However, few people outside of Scotland realise Dundee is the home of the infamous game which kickstarted the genre of adult video games.

The city’s gaming industry is world class and has come a long way since DMA design developed the first version of GTA back in 1997. The latest game in the series, Grand Theft Auto V, sold more than 11 million copies in the first 24 hours generating £500m in turnover and is now the fourth highest-selling game of all time!

The success of GTA and Dundee’s gaming industry is a testament to the global potential of innovative products and solutions. I look forward to meeting with Dundee’s business leaders and sharing insights on how businesses from all sectors can go grow globally.

Seats are still available for Tuesday’s event so please join me, Russell, and RBS team including Simon Fraser and Emma Miller over coffee for three short presentations followed by Q&A discussion and networking.