Shareholders feel failures of meeting room where the shoe

Investors certainly cares how the companies they invest in, and a blow to look at the map will tell you why. When there are serious shortcomings in the meeting room, as evidenced this week to undermine Kazakh ENRC, shareholders finally felt where the shoe.

ENRC is inferior to the rest of the UK mining industry by a substantial margin during the past year, despite more than doubled its profits in 2010 on the back of the global boom in commodities. Chart shows why corporate governance cannot be an add - on for one Fund Manager. It is a fundamental element of the process which, in this case, led no surprise to many investors, giving the company a wide berth.

Most of the examples of bad governance are less glaring than the unedifying spectacle of defenestration of Wednesday last two non-executive directors of the ENRC. Sir Richard Sykes and Ken Olisa have shown the door, it would seem that, for having the temerity to do their work - holding managers to account. It was the first time in ten years a Director of a FTSE 100 company was voted off the coast of the Commission at an annual meeting.

At the heart of this debacle is the predominance of a trio of founding shareholders who promised an interventionist approach when the company floated in London in 2007 but have ignored since this promise. With undermine fellow FTSE 100 Kazakhmys and the Kazakh Government, the three have control over the shares of the company, less 20pc that are freely accessible to outside shareholders.

This would normally prevent a float in London, and a special exemption was granted for him to move forward on the ground was big enough for a few shares in the float to represent a liquid market. The events of recent days have questioned the wisdom of this decision.

ENRC as a publicly quoted company life was affected by controversies, including the eviction of its Chief Executive (who remains nevertheless responsible), a dispute mines purchase in the Democratic Republic of the Congo (now subject to a legal battle in the British Virgin Islands) and critical francs from the company by politicians, which one has warned its executives — not only way to be "a patsy for puppet-masters."

One of the great strengths of the London Stock Exchange is its international exposure. The first phase of globalization during the Victorian era, age, when the money raised in London built railways of the world, canals and Telegraph, the city funnelled capital of the world where he can work harder. That it continues to do so, it is a good thing for the prestige and balance of payments of the nation, but also to investors of the country.

Home bias means that people over-invest in their national markets and to the to the United Kingdom about half of all the assets are invested at home, four or five times that suggests the capitalization of the London market. But international companies listed on the UK bias means that it is more logical as it may seem. A London investment is to a large extent an investment in the world economy and especially in the emergence of the developing world.

However, the international character of the London market can remain only a positive if the threshold of quality for companies listing here is set to high and kept it. The stamp attached to a quote from London, with its implicit stamp of approval means that good companies and bad will cry for a list. Similarly, costs banking investment offers when massive foreign companies on the market mean there is a huge temptation does step to examine too closely before riding on the red carpet. It is a dangerous combination of incentives to close our eyes.

Investors are rights pushed more questions companies with no connection to the United Kingdom when they choose to register their shares in London. Not that anyone can claim that they have not received a warning in the case of ENRC. 25 Pages of risk in its prospectus factors were an indication that this was not going to be a smooth ride.

tomrstevenson@fil.com

• Tom Stevenson is a Director of Fidelity International investment. The views expressed are his own

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FTSE 100 below where it began the year

Dealer index closed in paragraphs 5,845.29 - its more narrow low in three months - after an "unholy triumvirate" of bad news.

Chris Purdy, a trader at Spreadex, said escalating violence in Libya, a downgrade rating of credit and the weak data from the Spain China had investors for the hills running.

Richard Hunter, head of UK Equities at Hargreaves Lansdown securities broker said the market was "fighting against a sea of concern".

"There is concern that the geopolitical situation in the Middle East could derail the recovery and the risk of default of payment of European sovereign debt fears have been building in recent weeks, Mr. Hunter." investors decided of move to the bottom in gold and save currencies haven. "".

"If unrest spreads in the things of the Middle East could get seriously disturbing."

However, Mr. Hunter believed that the FTSE would end the year above 6,500 points.

Mick Gilligan, responsible for research at Killik Capital, said there there had no "wholesale" shares, but investors are enterprises ditches of natural resources for defensive stocks. »

The Libya oil production was cut to 500,000 barrels per day of 1. 6mafter a rebellion against Muammar al-Gaddafi began last month. Concerns grow similar disorders may extend to the Kingdom of Saudi Arabia, oil-rich.

Experts are also regularly saying oil prices could affect the global world economic recovery, despite signs that he spent at the course.

"We had been favour bumping our appeal of global growth." Unfortunately, the wave of oil prices cancelled more of this upgrade, "Bank of America-Merrill Lynch, said in a research report. "The risks on growth are strongly biased to the downside."

The report said that a global recession would be a real risk that the oil prices have exceeded US $150 per barrel of sustained. $ 200 Per barrel, a global recession is almost certain, he said.

The stock market rout spread to United States where the Dow Jones fell 1. 9pc to close at 11,984.61. The broader Standard & poor 500 index dropped 1. 9pc to 1,295.11. The Nasdaq composite dropped 1. 8pc to 2,701.02.

Investors were pots when China reported a trade deficit of surprise in February on Thursday. Chinese exports fell in February as businesses closed for the lunar new year day a week, but more high-priced oil and other goods imports have jumped, producing a trade deficit for the month of the summer of $7.

Decommissioning of the Moody of the debt of the Spain, most beautiful fears about Europe's debt crisis. In the United States, the Government reported that new claims for unemployment benefits rose more than expected last week.

The United States oil prices fluctuated $ 103 per barrel as traders worried about protests in Saudi Arabia could degenerate and hinder production in largest exporter of crude oil the most.

In Asia on Friday, Japanese Nikkei 225 average stock lost 1. FP7 to 10,254, ABN Korea in the South fell 1. 2pc at one stage and the Australia S & P/ASX 200 1. 1pc. Index Hang Seng Hong Kong hangar 0 FP7 to 23,443, with smaller shares of energy.

Mainland China Shanghai Composite Index slid 0. 3pc 2,949.12, after China announced that its February inflation remained high at 4 9pc. Accelerated food prices increase, adding to the pressure of the Government to control the anxieties cost of living is concerned could fuel unrest.

FTSE 100 is seen falling Friday, with an earthquake struck off the coast of the northeastern coast of the Japan likely to add another subject of concern for investors.

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Where next for dividends?

Equity Gilt study shows that £ 100 invested in the end of the second world war would have been useful to only £ 5,721 at the end of 2008 in nominal terms. Reinvested gross dividends and the same £ 100 would have grown to £ 92,460.

However, the report shows that UK investors are highly dependent on living a little paying dividends. In 2010, the 38pc of all distributions came only five companies, Shell, Vodafone, HSBC, GlaxoSmithKline and AstraZeneca. The 15 companies paid 61pc of all dividends. 2009 was high water concentration of dividend. Last year, more than half (46pc) has been paid by the top five and two thirds of the top fifteen as two oil majors were Stern. The BP disaster shows how dangerous this lack of diversification of revenue for UK investors.

Three of its four annual payments are equivalent to approximately one-tenth of all dividends from the UK. Indeed the BP, despite one payment in 2010, is still the payer seventh in the UK. BP will pay more than £ 2 more in 2011 to ensure a place in the top five.

Investors who purchase two or more shares, income fund believe that by organizing multiple funds, they receive diversity, but in reality, they have only a handful of stocks. Vodafone is held by UK income fund 93pc, two-thirds have BT and more than half hold Aviva.

Martin Brown, Director of the Ignis UK Equity Income Fund said: "this issue has been carefully characterized by the events surrounding BP last year." Before the disaster of the Horizon deepwater platform, BP has been the largest company FTSE 100 and 10pc of the paid market dividend. Despite its huge size, failure management leads to an event that caused the stock prices to plunge by 50pc in two months and for the company to cancel their dividend for the year. »

Mr. Brown said that managers must find ways to offer investors a different portfolio of their peers Fund - or an investor can also hold a tracker and save on administrative costs.

He said: "there is a difference between a research company and arrive at the conclusion that its price of dividend and share offers good value and all simply buying a business, because it is big and your peers the owner." If the latter is true, then you are does not warrant a tax of active management, and customers would better have a tracker Fund.

As a 10 best stocks pay an amount disproportionate income, many managers assign an amount disproportionate their funds to them.

Mr Kirrage said that, in order to avoid a portfolio of income being too focused he sought outside of the FTSE 100 stocks generate revenue.

Date of dividend monitor supports this position - dividends from the 250 FTSE rose 16 3pc in 2010, while those of the FTSE 100 rose much less 6 8pc.

"It is not only about who has the highest performance today," said Mr. Kirrage. "You haven't think about who has the best opportunities for growth dividend - and capital - growth in the future."

Sectors show high in terms of increased dividend from 2009 to 2010 are cars, leisure property services real estate and construction - which are made of most small businesses according to Mr. Kirrage. Leisure goods sector contributes to a negligible amount - less of 0 5pc on the part of the dividends UK, but its increased dividend 221pc the sector as a whole in 2010.

But, although companies in the FTSE 250 dividends may have increased at a faster pace, they only paid £ 5-a whopping billion. 8bn £ 49 by FTSE 100 companies last year.

"The pharmaceutical sector is a good dividend has the ability to grow its dividend, stated Mr. Kirrage." AstraZeneca seeks cheap now and is a quality stock. »

PSigma income fund manager Bill Mott is in agreement. "Twenty years ago, it would have been difficult for a fund oriented on what income whatsoever in the pharmaceutical sector. It is stocks Go - GB growth on big premium valuations and dividends were minimal. GlaxoSmithKline has now a report price-to-earnings barely two-digit and 5 5pc yield. We believe that the entire sector is now seriously undervalued. We have 6 Fund 3pc 3 8pc AstraZeneca and GlaxoSmithKline too.

Mr. Mott is also heavily overweight in public services where we love to National Grid, Centrica, Scottish & South energy and power International. "We keep our Kit 110U overweight in the food retail, owner of J Sainsbury, Wm Morrison supermarkets and Tesco.

Councillor Adrian Lowcock, Bestinvest said that although income equity was a precarious in recent years, in the long term, the advantage of investing in companies that pay dividends should not be ignored. He recommended that investors hold income Artemis or Threadneedle UK equity.

Investors who do not need income now, should consider the merits of reinvested earnings.

"The power of dividend reinvestment is often underestimated,", said Mr. Lowcock.

It is not just the UK dividends are back in 2011.

Meanwhile, Brian Dennehy, financial advisors Dennehy Weller & Co, said: "we must also recognize that the United Kingdom offers limited choices available subcategorization.". "It is negligent to ignore the huge potential for equity income in the world, where the Fund operate these as M & G Global dividend seek a 16pc increase in their payment this year. On the front of the UK Mr. Dennehy's UK peaks include Schroder income and JOHCM UK equity.

Energy & utilities and the vacancies of oil & gas jobs Telegraph

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Where did all UK bosses of FTSE companies?

Sir John Parker, UK Chairman of Anglo American and German Gerard Kleisterlee, the new President of Vodafone Photo: Eddie Mulholland/Bloomberg News

Analysis of the list of the top companies of 20 traded on the London Stock Exchange - Vodafone to Rio Tinto to Xstrata - there is not a business without vast operations overseas. Some companies may well have begun to offshore as British-run, but their growth in international markets is main reasons why they are so successful.

Does second largest company from Great Britain, Vodafone, now headed by a German-born Dutch and Italian is not necessarily a reflection on the lack of British candidates up to the job, the headhunters say. It is a sign of the times: Britain multinational business and better serve their customers and shareholders and an international Board is essential.

Examine the FTSE itself. As Samuel Johar, Buchanan Harvey, a headhunter FTSE 100 Chairman said: "is not arrived in stock exchange of the all the other countries in the world." Businesses should make sure they meet global customer and shareholder needs.

In the case of Royal Dutch Shell, said Mr. Johar society deliberately decided not to recruit a British person or Dutch on the role of President, for fear of promoting one nationality to another in the company anglo-néerlandaise. Instead of this, she chose to hire Jorma Ollila, a Finnish businessman, as a "compromise".

"The company had been through a bad patch and it was slightly politically sensitive." "Yes, it is a disadvantage for the British and Dutch - candidates he left entirely - but life is not always right", said Mr. Johar.

Most often, however, table of multinational President in top 20 companies in the UK is nothing other than the meaning of the judgment, experience and gravitas, they can bring to the role, Mr. Johar says. Nationality is irrelevant to some extent. "This is the role of the President of wise and moral compass of the society, acting in the interest of shareholders," he said, adding there is no evidence that British candidates lacked these qualities.

If anything, UK-born businessmen had an advantage, Mr. Johar says, because they knew that their way around the city - hedge fund managers, brokers, journalists and heads hunters.

Take Sir John Parker, Chairman of Anglo American, which led to business "heavy weight" on the Board of Directors in just four weeks starting labour who managed to turn the society – something a President overseas with little influence in the city could not achieve so quickly.

Alexander Mann Solutions, a business research Executive since the beginning of the recession companies require accountability more of a potential candidate for a senior advisory role. They want to see proof of what this person has done to deliver results in their market, the customer experience with different bases and places rather than just potential.

To some extent, this memory ready an international candidate, who can easily demonstrate experience in overseas markets. Mark Diog, head of the acquisition of talent, said: "when you recruit for many international in FTSE 100 companies, it is almost a given that you are looking for a candidate wishing to acquire an experience of different markets, different geographies, internationally mobile and with overseas employee base."

However, he added: "The UK is an international hub of global finance." It is an attractive working and living place, and it is one of the markets more open to international applicants. »

The message is clear, said Mr. Diog: If Brits want to step up to the mark, they must pass all implemented to show a "truly global mindset".

Job and career counseling jobs Telegraph

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Where next for oil? Analysts give their predictions

UBS, said the market is still "feeling its way" in determining what should be the right oil prices. Despite these last rises, it is still $80-$90 a barrel is justified and raised its forecast of $ 79 to $ 80 December 2011 $85 per barrel. His most recent research, said:

We continue to see as well provided market but also note that prices are now based less on fundamentals and more sentiment and momentum within specific limits. We are seeing a floor of approximately $60 / bbl by OPEC and while we would step exclude prices hitting $100 a barrel, as some suggest, we doubt strongly sustainability of such a move.

Commerzbank mentioned the Alaska oil leak in its latest research and said: "" about 600 thousand barrels of oil per day are currently absent of supply, which could be reflected in a fall in us inventories accordingly."

However, it is satisfied that the price of oil will not significantly affected by the event, saying:

"As the General market sentiment remains optimistic and investor interest high, the oil prices should not come under significant pressure." Demand growth should facilitate slightly in the coming year, which implies for the oil price in the medium and long term that everything cannot grow forever. »

Barcap oil settle about $85 in 2011, with prizes for the year and forecast to reach $135 per barrel in "long term". He said in its latest research:

The upside surprise world oil demand has continued and included an additional dam lot more strong that Chinese oil demand and revision rising us oil consumption.

The combustion of the surplus stocks continue to its full swing, and U.S. commercial inventory surplus total higher than the average of five years is just 65.9 million barrels, levels lowest in eight months and about 46 million barrels below the peak reached in mid-September. So our forecast of price risks continue to build toward the head at the request of positive surprises continues.

Unlike some competitors, Morgan Stanley believes oil will test $100 barrier:

We anticipate that oil markets strengthen from this year, underlying increase in oil prices has the capacity to fallen reserve levels 4 Randle barrels per day at year-end (back to 2008 levels). We look so prices remain high in 2011, $100 tests.

Looking for a career in the energy sector? Telegraph jobs currently has a large number of energy and utilities and oil and gas vacancies listed

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