Deep in the English countryside about 18km north of Cambridge, hundreds of used tractors are waiting to be snatched up by one of many overseas buyers getting a better bargain because of Brexit.
Lured by a weaker pound and good quality of machinery, dealers from the European Union and as far away as Lebanon and Sri Lanka flock to the monthly Cheffins auction held on an area the size of 40 football pitches. Sales - the bulk of which are exported - have jumped since the UK voted to leave the EU, reaching a three-year high in the first 10 months of 2017.
“Since the Brexit day and the reduction on the value of the pound, it’s a great buying opportunity for all Europeans to come and buy here,” says Bill Pepper, a director at Cheffins. “We are the only auction to have such a variety of machines, so it’s almost like a one-stop shop.”
Sterling is the worst-performing major currency since the June 2016 vote, giving foreign buyers more value for money. From Deere tractors preferred by Spaniards to Massey Fergusons favoured in Asia and Africa, Cheffins’s sales jumped 15 per cent this year to October, following even bigger gains in the months after the referendum. Some demand is also from UK farmers wary of buying new machines ahead of the exit from the bloc.
For non-Brits, the pound’s slide has been good news. At the auction, the second-hand goods buyer Hassan Alaywi was looking for an old tractor to fill up the last space in his container bound for Lebanon. He said the lower prices meant he could make any necessary repairs and still make a 20 per cent export profit.
Harsha Dharmawardene, a Sri Lankan dealer who has bought more than 1,000 used tractors in the past 35 years, was also browsing the field of some 300 machines in Sutton. While he was not planning a purchase in September - a month the pound rallied - he says he took advantage of lower prices right after the Brexit vote. He usually exports the machines to his home country and fixes them before shipping as far afield as East Africa.
The pound has dropped 13 per cent against the euro since the UK voted to leave the EU.
Cheffins sold about £30 million (Dh 148.2m) of tractors and parts so far this year. The auction can offer good deals: earlier this year, a two-year-old John Deere vehicle sold for £56,000, almost half the cost of a new one.
__________
Read more:
British farmers fear crop loss as EU workers dwindle
Britain looks to robots to work the fields if cheap labour Brexits
__________
The auctions also attract local buyers. On the back of lower incomes following several years of falling agricultural prices, UK farmers remain cautious of making investments before the impact of Brexit becomes clearer, says Stephen Howarth, an economist at the Agricultural Engineers Association, which tracks new vehicles.
“Because farmers aren’t doing particularly well, they have had to source good second-hand machinery and that’s why the second-hand market is very strong at present,” adds Mr Pepper, pointing out manufacturers have raised prices for new models. “It’s all about affordability. Most farmers can’t buy, so they have to look at the second-hand market.”
While the average farm income in the UK jumped 20 per cent in the 2016-17 season, it was still 43 per cent below 2011-12’s level, government data show. Bumper grain harvests from Brazil to Russia have depressed prices, with a Bloomberg grain index heading for a fifth annual decline, the longest run in data going back to 1991.
Farmers are also feeling the pinch in the rest of Europe, and one Spanish dealer at the September auction complained about delays to EU subsidy payments which have limited farmers’ income in his country this year.
About 90 per cent of the tractors sold at Cheffins are bought by dealers, who then export most of that, Mr Pepper says.
"The weak pound has meant that these exports can achieve better prices in sterling terms while becoming more competitive on export markets, boosting trade-in values and helping to support activity across the market," adds Mr Howarth.
COMPANY%20PROFILE
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The specs
Engine: 1.6-litre 4-cyl turbo and dual electric motors
Power: 300hp at 6,000rpm
Torque: 520Nm at 1,500-3,000rpm
Transmission: 8-speed auto
Fuel consumption: 8.0L/100km
Price: from Dh199,900
On sale: now
%E2%80%98FSO%20Safer%E2%80%99%20-%20a%20ticking%20bomb
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No Shame
Lily Allen
(Parlophone)
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
In the Restaurant: Society in Four Courses
Christoph Ribbat
Translated by Jamie Searle Romanelli
Pushkin Press
The specs
AT4 Ultimate, as tested
Engine: 6.2-litre V8
Power: 420hp
Torque: 623Nm
Transmission: 10-speed automatic
Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)
On sale: Now
Game Changer
Director: Shankar
Stars: Ram Charan, Kiara Advani, Anjali, S J Suryah, Jayaram
Rating: 2/5
COMPANY PROFILE
Name: HyperSpace
Started: 2020
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
Based: Dubai, UAE
Sector: Entertainment
Number of staff: 210
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
How to avoid crypto fraud
- Use unique usernames and passwords while enabling multi-factor authentication.
- Use an offline private key, a physical device that requires manual activation, whenever you access your wallet.
- Avoid suspicious social media ads promoting fraudulent schemes.
- Only invest in crypto projects that you fully understand.
- Critically assess whether a project’s promises or returns seem too good to be true.
- Only use reputable platforms that have a track record of strong regulatory compliance.
- Store funds in hardware wallets as opposed to online exchanges.
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
if you go
The flights
Etihad, Emirates and Singapore Airlines fly direct from the UAE to Singapore from Dh2,265 return including taxes. The flight takes about 7 hours.
The hotel
Rooms at the M Social Singapore cost from SG $179 (Dh488) per night including taxes.
The tour
Makan Makan Walking group tours costs from SG $90 (Dh245) per person for about three hours. Tailor-made tours can be arranged. For details go to www.woknstroll.com.sg
COMPANY PROFILE
Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
Emergency
Director: Kangana Ranaut
Stars: Kangana Ranaut, Anupam Kher, Shreyas Talpade, Milind Soman, Mahima Chaudhry
Rating: 2/5
COMPANY PROFILE
Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Total funding: Self funded
Diriyah%20project%20at%20a%20glance
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COMPANY%20PROFILE%20
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UAE currency: the story behind the money in your pockets
The biog
Favourite book: You Are the Placebo – Making your mind matter, by Dr Joe Dispenza
Hobby: Running and watching Welsh rugby
Travel destination: Cyprus in the summer
Life goals: To be an aspirational and passionate University educator, enjoy life, be healthy and be the best dad possible.
TO ALL THE BOYS: ALWAYS AND FOREVER
Directed by: Michael Fimognari
Starring: Lana Condor and Noah Centineo
Two stars
MATCH INFO
Uefa Champions League final:
Who: Real Madrid v Liverpool
Where: NSC Olimpiyskiy Stadium, Kiev, Ukraine
When: Saturday, May 26, 10.45pm (UAE)
TV: Match on BeIN Sports
