Monthly Archives: February 2015

Elio Moti Sonnenfeld: Descendant of Devotion and Kindness

Elio Moti Sonnenfeld, also known as Elio Sonnenfeld, is a modern businessman with an illustrious heritage steeped in tradition. Reaching back three generations, Elio Moti Sonnenfeld’s great grandfather was one of the great rabbis of the late 19th and early 20th centuries in Jerusalem, before the establishment of the State of Israel.

Born in Vrbové, (Slovakia), Rabbi Yosef Chaim Sonnenfeld arrived in Palestine as a young man with one of his teachers, Rabbi Avraham Shag.  As Rabbi Sonnenfeld’s great piety and devotion to learning progressed he became well-known among the residents of Palestine, and eventually he became the chief rabbi of Jerusalem. He was constantly pursuing peace and reconciliation, not only with his fellow Jews, but also with the increasingly hostile Arab population.

Soon after the Arab riots of 1929, which left many Jews dead or seriously injured, Rabbi Sonnenfeld wrote a heartfelt letter to the Arab residents of Mandatory Palestine. He urged the Arabs to understand that the Jewish community’s most treasured value is peace. He tried to reassure the Arab population that Jews had no secret plan to take over the Temple Mount, or any other Arab property. Rabbi Sonnenfeld is also famous for playing a key role in the establishment of the Diskin Orphanage in Jerusalem.

The orphanage was founded in 1880 by Rabbi Yehoshua Leib Diskin and taken over by his son, Rabbi Yitzchak Yerucham Diskin when Rabbi Yehoshua Leib passed away in 1898. Rabbi Sonnenfeld, who was a student of the older Rabbi Diskin, partnered with the younger Rabbi Diskin to create a welcoming and warm institution for the orphans and other children whose parents could no longer care for them.

Rabbi Sonnenfeld dedicated over 50 years of his life to this important project. With such a renowned heritage and ancestry as a foundation, it is no wonder that Elio Moti Sonnenfeld has been able to practice kindness and generosity through his own worthy endeavors.

Financial Advisor Population in Decline

"Financial Advisor" Photo by  Alan Cleaver

“Financial Advisor” Photo by Alan Cleaver

According to a report published by Boston-based research group Cerulli Associates, the number of financial advisors in the United States has fallen for five straight years. The report points to large numbers of experienced advisors entering retirement as the cause of the decline in numbers of these professionals.
In 2014 there were about 285,000 financial advisors at work, a decline of 1.9 percent since the previous year. Since the industry reached its peak number of advisors in 2008 with 325,000, the profession has lost over 39,000 members, a loss of roughly 12 percent.

Researchers say that although the number of retirees has leveled off since 2013, retirement will continue to plague the industry. The percentage of financial advisors age 55 or over is roughly half, and over the next ten years the number of retirees could reach as much as 100,000.

Cerulli has been keeping tabs on advisor population since 1992. They glean their data from surveys done by 7,000 advisors associated with banks, brokerages, insurers and other kinds of investment companies.

Hyundai Expanding into US Car Market

"Hyundai car assembly line" by Taneli Rajala  Licensed under CC BY 2.5 via Wikimedia Commons

“Hyundai car assembly line” by Taneli Rajala Licensed under CC BY 2.5 via Wikimedia Commons

South Korean auto maker Hyundai Motors has announced its plans to enter the commercial auto market in Europe and the United States. The move is based on the prediction that car sales are on the rise in these markets. When the US and European consumers can expect to see Hyundai in their regions has yet to be disclosed.

In addition the car company said it plans to invest about $363.13 million to expand annual production capacity in its commercial vehicle plant. They hope to go from about 65,000 vehicles produced each year to 100,000 annual output at their Jeonju factory in the southwestern part of South Korea. The figures, if they are reached, represent a 54 percent increase in production which the company says they want to meet by the year 2020. Hyundai also announced it will add 1.6 trillion won ($1.456 billion) into research and development of commercial vehicles.

Frank-Dodd Hurting Small Banks, Expert Says

"Porter Ranch Bank of America" by Coolcaesar at en.wikipedia - Transferred from en.wikipedia to Commons by User:Kelly using CommonsHelper.. Licensed under CC BY-SA 3.0 via Wikimedia Commons

“Porter Ranch Bank of America” by Coolcaesar at en.wikipedia – Licensed under CC BY-SA 3.0 via Wikimedia Commons

Marshall Lux, former chief risk officer for consumer businesses at JP Morgan, and now senior fellow at the Kennedy School at Harvard, believes that regulation which has been enacted in the wake of the financial crisis has disproportionately harmed smaller banks in the United States.

Lux has been researching the issue of how recent regulations, such as the Frank-Dodd financial reform bill, have affected banking in the US. This investigation comes at a time when lawmakers in Washington are considering introducing additional regulations to further control US banking.

Despite the fact that the market share for banks with less than $10 billion in assets has been declining since even before the introduction of Frank-Dodd, Lux has shown that since 2010, when Frank-Dodd came into effect, the market share decline for smaller banks had doubled. Between 2006 and mid-2010 the market share of small banks in the US shrunk by 6 percent, while from the introduction of Frank-Dodd in mid-2010 until now the reduction has been about 12 percent.

“What if Dodd-Frank created a too-small-to-succeed problem in addition to the too-big-to-fail problem?” said Mr Lux. “This research suggests it has.”

Beyler Eyyubov: Enjoying the ‘Sweet’ness of His Success

Middle Eastern businessman Beyler Eyyubov has always had a sweet tooth. It was inherited from his grandmother on his father’s side who used to bring pakhlava every Sunday to the family home.  As Eyubov got older and thrived in business school, he began wondering how he could bring his love for the sweet stuff into a money-making venture.

Fast forward 15 years and today he is the proud owner of a sweet shop in London.  ‘Beyler’s Sweet Shop’ is a great new haunt for all Brits who love sweets, especially those who like the good old classics like chocolate mice, jelly babies, kola kubes, rhubarb and custards and more.  It is a total throwback to the 1970s.

What Eyyubov particularly likes about running the store is all the people he interacts with on a daily basis.  He won’t just get the little kids dragging their parents in; he actually gets businessmen and women on their way to or from the office, seeking out a drumstick, wham bar, white chocolate fish and chips, or vampire tooth.

Indeed, it seems that Beyler Eyyubov really found a niche in the market at the right time.  According to Candyland’s brand marketing manager, Adrian Hipkiss, there has been a real revival in the market of retro sweets. This includes many of the classics that Eyyubov sells in his store like: Black Jacks, Sherbet Fountain and Dip Dabs.

Good for Eyyubov.  No doubt his grandmother would have been proud.

New Research on ETFs Shows Little Reason for Concern

Leveraged, inverse and inverse leveraged exchange-traded products first came on the scene in 2006. During the financial crisis, however, they rose to prominence as they showed outrageous returns. Many were attracted to the price swings and the opportunity to get amazing returns in a short period of time. Since that period, according to Michael Sapir, “the understanding in the market for these products has matured significantly.”

And a new report offers even more maturity and insight. A working paper titled “Are Concerns About Leveraged ETFs Overblown? was recently written by Ivan T. Ivanov of the Federal Reserve Board and Stephen L. Lenkey, an assistant professor of finance at Penn State University’s Smeal College of Business. They have concluded that the money going in and out of the funds, called capital flows, “diminish the potential for leveraged and inverse ETFs to exacerbate volatility.” Dr. Lenkey goes as far as to say, “ETFs with higher leverage ratios tend to experience larger and more frequent capital flows.”

The conclusion the paper comes to is that the overall effect on the market and the underlying index and stocks is actually quite limited, even if an investor can feel that things are unpredictable. They counter the idea that Leveraged ETFs and inverse funds lead to higher gains on up days and larger losses on down days.

As Mr. Sapir explained, “Geared funds were not designed for everyday investors. But institutions and financial professionals can use them to enhance return and manage risk.”

As the researchers concluded in their white paper, “the empirical analysis, we show that liquidity improvement strongly predicts future ETF net inflows, particularly in the price impact and the turnover dimensions. Other indirect proxies for liquidity also enter significantly: tracking error (negative), activity of share creation/redemption process (positive) and expense ratios (negative). We also show that institutional ownership is positively associated with liquidity improvement. Moreover, when we decompose total ETF inflows into institutional and retail inflows, we find that liquidity improvement matters for both groups, but price impact and turnover are much more important for institutional than retail flows. Further, when we classify institutional investors by legal type (investment horizon), we find that liquidity improvement matters much more for investment companies (short-term investors) than for banks (long-term investors). Finally we analyze the importance of ETF and underlying portfolio liquidity on mispricing. As expected, both components have a significant and negative relation with mispricing.”

US Businessmen Preparing to Invade Cuba

"Raúl Castro, July 2012" by Government.ru. Licensed under CC BY 3.0 via Wikimedia Commons - http://commons.wikimedia.org/wiki/File:Ra%C3%BAl_Castro,_July_2012.jpeg#mediaviewer/File:Ra%C3%BAl_Castro,_July_2012.jpeg

“Raúl Castro, July 2012” by Government.ru.

Last week diplomats from the US and Cuba met for the first time to discuss the way forward after Obama and Castro began the process of defrosting relations between the two countries. Business between the capitalist USA and the communist island to the south east of the US has been in a mummified state for about 50 years. But since President Obama and Cuban President Raúl Castro negotiated an agreement to normalize relations, businessmen have been fantasizing about the new opportunities which are awaiting them after the excitement of the new status settles down.

So far what has been talked about in negotiation for business deals are opening channels for farming equipment, construction materials and a large number of other resources to benefit Cuba’s fledgling group of private entrepreneurs.

Interest has been so stimulated of late that the US Agriculture Coalition for Cuba, a group of businesses that would like to see trade to the island grow, has risen to 50 in the past month, and increase in membership of 100%.

The vice chairman of the coalition, Paul Johnson, is planning a trip to Cuba this coming March to learn about the Cuba’s farms. The trip is already completely booked with 80 participants.

“Americans in general have wanted to know more about Cuba for half a century,” said Johnson, a Chicago businessman who sells food products to Cuba. “Now they feel like history is being made, and they have an opportunity to go and see Cuba and bring 11 million Cubans into the global marketplace.”

Historic Partnership: Shlomo Ben Haim and Chinese Scientific Industrial Zone

On January 23, 2015, Changzhou Mayor Gaoyun Fei met with Changzhou Science Advisor Professor Shlomo Ben Haim. Professor Ben Haim is the Chairman of the Hobart Group, an Israel-based medical technology company. Since last November 2014, Professor Ben Haim has been engaged as the Scientific & Technology Advisor to the City of Changzhou.

As a scientific advisor to the President of Israel, and Chief Scientist of Johnson & Johnson, Professor Ben Haim is uniquely positioned to engage in this role as Changzhou Science Advisor. He holds over 500 patents for his inventions, a number which represents 26 percent of all Israeli patents for medical devices. He is the founder of the Hobart Group which is involved in the fields of cardiac disease, diabetes, oncology and more.

Since November, Professor Ben Haim has been working closely with representatives from the West Taihu Lake Science and Technology Industrial Zone, and the two parties have already signed a memorandum of understanding.

At the meeting with the Mayor of Changzhou, Professor Ben Haim said that he plans to have the Hobart Group establish its research and development department for their post-stroke rehabilitation device at the West Taihu Lake Science & Technology Industrial Zone. He said he is also planning to set up a primary care kiosk at the site as well. The parties also agreed to create an industrial monetary fund to value about 1 billion RMB. The purpose of the fund will be to provide capital support for more Israeli hi-tech medical projects to be established in the Changzhou industrial zone.

Mayor Fei explained the importance of the agreement, stating that the Chinese economy is at a turning point in its development. Whereas until now the country’s economy was based on resource investment, now the economy is being more and more driven by technological innovation. According to an English translation of a Chinese article on this subject, Mayor Fei said that the Sino-Israel Changzhou International Innovation Park is the first of its kind established by these two countries in partnership.

Professor Ben Haim said that he was highly appreciative of the Changzhou development environment, as well as the atmosphere of innovation that permeated there. He said that he expected more projects to arrive in Changzhou, including world-leading specialized medical training institutions, as well as specialized hospitals. Professor Shlomo Ben Haim asserted that he foresaw continued cooperation between the parties leading to economic development in Changzhou.

Several days after the meeting between Professor Ben Haim and Mayor Fei, the first meeting of the Sino-Israel Joint Commission Task Force on Innovation was held in Beijing. On that day, January 29, 2015 the cooperation project between the Hobart Group and Changzhou became one of several projects which were signed into being.