Invest your life

Since I'm going to do research of UK, I'll use English this time. I hope it won't cause problems to anyone.

UK attracts me because Chinese people have invest in UK a lot since 2005, and the wealthiest man in China, 李嘉誠, "almost bought the whole UK", according to a British media. (note 1,2)

So let's look at a brief introduction of UK first.

UK is the second largest economy in Europe, and the 6th largest in the world. 78% of GDP comes from services industry. Finance and banking are most important services with London being one of the world financial centres.

As for natural resources, UK ranked 19th in crude oil production and 20th in natural gas production, and it has reserves in iron ore, coal, gold, tin, lead...etc. But due to its large demand, UK remains net importer of both oil and natural gas.

In 2008 financial crisis, UK faced a serious economic setback due to the importance of its financial sector, and the government has implemented some expansion plans including taxes cutting and monetary stimulus (quantitative easing). However, public debt and budget deficit kept increasing so that the government had to initiative austerity measures in 2010, hoping the budget deficit would be lower to near 1 % of GDP by 2018. But the policies seemed to have only limited effects.

source: http://www.tradingeconomics.com/united-kingdom/

The above stats may not be very positive as an indicator to UK's economy, but there are still good reasons to invest in UK. 

The industries that I'm interested in are in the following:

A. Renewable Resources

British government set a very strict timetable to reduce CO2's emission. It aims to emit only half of the carbon-dioxide by 2025, so it plans to generate around 30% of electricity from renewable resources. And in 2012, the renewable resources have accounted for 10 % of total electricity production. (note 3)

B. Pharmaceutical Industry and Biotechnology Industry

Every one in five of the world's biggest-selling prescription drugs were developed in UK, and UK is home to GlaxoSmithKline and AstraZeneca, world's number 6 and 9 in the industry (based on 2012 market capitalization). UK also had the third highest-share of global pharmaceutical R&D expenditure of any nation, only behind the US and Japan. 

C. Cosmetic Industry

Since consumers value eco-friendly products as well as natural and organic products more and more, advanced technology and innovation are core to the success in this industry. UK's chemical industry is very mature. And along with its easy access to raw materials, plentiful water supplies, good communications (road, rail and port facilities), reliable energy supplies, and availability of skilled labour, UK remains competitive in Cosmetic Industry. (note 4)

According to a research, the UK cosmetics manufacturing market has been forecast to increase at a compound annual growth rate (CAGR) of 0.6% over the next five years, increasing from a value of £2.25 billion in 2013-14, to reach a value of £2.32 billion in 2018-19.(note 5)

From the above, I'm still optimistic about investing in UK, and I personally believe bottom-up investing strategy (note 6) can be profitable when the overall economy is not performing well. So, do some work before making an investment decision, don't just follow crowds~

Disclaimer: This article is only for  information purposes only. Information contained in this article is neither legal or tax nor particular investment advice. All data only serve the non- commercial use of the visitor of this blog. I assume no liability for any losses or damage resulting from the trust in the published information contained in this article.

note 1
http://www.bbc.co.uk/zhongwen/trad/uk/2013/10/131014_vj_uk_china_investment.shtml

note 2
http://www.chinatopix.com/articles/796/20130805/chinese-new-magnate-victor-li-tzar-kuoi.htm#.UnH0iHAbCMF

note 3
http://twbusiness.nat.gov.tw/countryPage.do?id=10&country=GB

note 4
http://www.essentialchemicalindustry.org/the-chemical-industry/the-chemical-industry.html

note 5
http://www.companiesandmarkets.com/Market/Consumer-Goods/Market-Research/Perfume-Cosmetics-Manufacturing-in-the-UK-Industry-Market-Research-Report/RPT994104

note 6
http://www.investopedia.com/terms/b/bottomupinvesting.asp

參考資料:

1. https://www.cia.gov/library/publications/the-world-factbook/geos/uk.html
2. http://www.economywatch.com/world_economy/united-kingdom/structure-of-economy.html