Virtual Reality takes over real life

Virtual Reality takes over real life

Remember the movie Matrix in 1999. Keanu Reeve was wiring himself to a pod that sends his mind to another virtual world. Knowledge and martial art could be downloaded to his brain and he saved the world in a Hollywood way. This is now happening to our current generation. The new generation of games will make gamers put on a pair of goggles for hours. You will see your children screaming and jumping around the house wearing these goggles and you have no clue what they have been eating. The tiny screen could give the gamers the experience of sky diving or wrestling with a zombie in their own living room. This actually sounds worse than everyone looking at their mobile phones at the dining table on Christmas. Virtual Reality (“VR”) could make the people in your house further away from the real world. There is a more real version of VR. Augmented Reality in simple terms is to project a virtual world in a real world. So through the screen, one will see Spiderman hanging on his ceiling and Captain America sitting at his desk. There are some day to day commercial use in AR. For example, one goes into a Porsche showroom and if you have the right App, you could point your phone at the latest white 911 and change the color to red and change the exhaust pipe, leather color inside, etc. Or you can point your phone at your living room, drag and drop different Ikea furnitures to get a feel of what the living room would look like with a new sofa and dining table.

The giant multi-national companies of course want to make a living with this new technology. Sony Playstation and Microsoft Xbox obviously would take this chance to secure their fans base with launching new VR games. It would be amazing to play Winning Eleven and tackle Messe in virtual reality. Samsung has launched a pair of goggles for you to attach your latest Samsung handset to experience VR anytime anywhere. HTC launched an almost NASA laboratory like gadget called Vive that minimizes the lag between your hand turning and the display on the goggles. Apparently, it should make the users less dizzy. Facebook bought Oculus Rift for USD 2 billion in 2014 and the headset was launched at EUR 700 a piece in March 2016. Oculus already can take you to experience Games of Thornes with virtually real sword and sheild. The combination of Facebook and virtual reality could be explosive. Friends will have virtual gathering or could attend a distant birthday party without the travelling.

Big money is being poured into VR. According to a report from Digi Capital, in 2015, USD 700 million was invested into Virtual Reality and Augmented Reality. In 2016, USD 800 million investment went into Magic Leap, the hottest startup in the VR world and it is based in Florida. Apparently, it will really turn you into an Iron Man, maybe not the flying part but the bit when you could throw a globe in the middle of your study room and it expands to the galaxy. If Magic Leap could turn an apartment in Eelphant and Castle to a townhouse in Chelsea, the USD 800 million is very well spent. AR and VR revenue is forecast to hit USD 120 billion annually globally by 2020.

VR uses a lot of computation power. This makes the future of cloud computing even brighter. Amazon and Google have mentioned their VR initiative here or there. But these two giants do not need to necessarily compete with their own gadgets. Google has launched a smartphone or two but it is happy to see Apply, Samsung and Huawei fighting for market shares as long as there more and more smartphones sold on the planet. More smartphones mean more searches and more revenue for Google who still dominate the search engine world. Amazon similar enjoys more online shoppers who use smartphones to shop while they are waiting for their transport.

Brexit and Donald Trump

Brexit and Donald Trump

Just a month before the EU referendum, Chancellor George Osborne commented Brexit would lead to a “Do-it-yourself recession.  Remain campaigners “Stronger In” argument is focus on economy.  Vote Leave is zooming into the immigration issues.  According to polls conducted by ICM, ComRes and Ipsos MORI, the top issues in people’s mind are immigration and economy.  So the Remain camp and Vote Leave camp have to leverage on these big hitter issues.  The Remain camp got the US President Obama to comment “Brexit would put UK at the back of the queue for trade talks”.  It is a fear factor play and it probably works on some of the middle class voters.  The fear of some global firms moving their Europe headquarters away from Britain (to Dublin perhaps).  Some business owners also do not like the uncertainty in tariffs and the trouble of getting visas for overseas EU workers.  Looking at hotels and restaurants in London, one could sense the importance of EU workers.  The Vote Leave camp focuses on immigration issues and getting the management control back from the EU to the UK government.  United States, China, Japan or Australia is not part of the EUs and they are not exactly missing out.  UK is physically close to EU but that still does not mean UK has to be part of it. The　　fact that no one can imagine UK to give up the Sterling and adopt Euro means it is acceptable to keep a distance.  Vote Leave does not mean UK does not trade or work with EU.  It just means putting a bit more distance in between.  DIY Recession may be worrying but staying in EU does not mean UK never gets into a recession.  Japan has been in recession for years and recession seems no more annoying than the bad weather in winter.  There are economic fixes for economic problems.  The unknown is true and is part of the future.  Would Brexit be a transition similar to Sir Ferguson passing Manchester United to David Moyes?  Or more like a Leicester City 5,000 to 1 Premier League journey?  It is up to the people.

Looking at the GBP EUR exchange rate, there seems to be no panic yet.  The Sterling is at EUR 1.2961 to GBP 1 as of 23 May, 2016, stronger than this year low in April at 1.236.  FTSE 100 is also doing ok at 6146 level as of 22 May, 2016, much higher than the 5537 low in February.  Perhaps the market is pricing in Remain camp to win as of now.

While the Remain camp has Obama, Donald Trump said a Brexit would make sense for Britons especially in the light of the craziness of the migration chaos.  Trump’s election journey has been as unbelievable as Leicester City’s road to champion.  His strongest card is immigration and his comments on building a great wall and a deportation force were jaw dropping.  Trump has now only got Hilary Clinton between him and the White House.  He is probably better at hosting reality TV than Hilary but Hilary has certainly spent more time as a politician than Trump.  This is Harry Potter against Lord Voldemort in terms of experience.  The world is changing and voters are different.  It is more important to understand what voters want than what you have on the shelf. 

Amazon is conquering the retail market globally through understanding its customers better than most of his competitors.  Its share price is at USD 702.8 as of 22 May, 2016.  5 years ago, it was below USD 200.  Amazon market capitalization is USD 331.6 billion (GBP 229 billion) versus Wal-Mart at USD 219.3 billion (GBP 151 billion).  Tesco market capitalization is GBP 13.3 billion.  Amazon is branching out to all lines of business from its e-Commerce nucleus.  Good at dealing with big data gives them a world leading position in cloud computing.  Knowing the customer tastes allow them to venture into private-label goods in food and household products, offering videos and other digital entertainment, clothing will come.  Shipping to so many customers globally means building up their own delivery services and logistics operation.  As the buy orders keep coming into Amazon.com, it looks like the buy orders for its shares also continue.  If EU can run like Amazon, voters would probably have an easier decision on to stay or to go.

Made in China “Mermaid” beat Kung Fu Panda 3

Made in China “Mermaid” beat Kung Fu Panda 3

China movie industry is catching up with Hollywood and Bollywood.  Good old love story between a Mermaid and a billionaire in today’s China.  Mix together a message of environmental protection, Jim Carrey style acting and Mr Bean sense of humor  The results were USD 552.5 million box office pretty much all in Chinese speaking markets.  The Mermaid, directed and produced by Stephen Chow who was born in 1962, same year as Jim Carrey.  Stephen Chow also directed and produced Kung Fu Hustle (2004) and Shaolin Soccer (2001).  It was released during Chinese New Year in 2016.  Its box office beat Kung Fu Panda 3 and the Revenant.  This column is not about movie but the success of “The Mermaid” reflects the strength of China domestic economy and its transformation to a service industry driven economy.  China cannot compete against the Frontier Markets such as Vietnam on cheap labor.  Just like Great Britain had to evolve from heavy industries such as coal mining and steel plants.  So when the media says China economy is slowing down.  It is a very general statement.  The labor and resources intensive, environmentally damaging industries like the coal mine owners in Guangxi are suffering.  The Alibaba headquarter in Hangzhou are full of young IT talents chasing their dreams.  China 6.7% GDP growth in Q1 2016 is the results of a cliff hanging resources sector and rocket growth in services sector such as e-commerce, entertainment and tourism.  China stock market has lagged behind Russia and Brazil this year.  There is still time to get on the train.  China A shares indices such as CSI300 includes 300 listed companies and is a good representation of the overall China A shares stock market.  Hang Seng China Enterprises Index “HSCEI” represents 40 large Chinese companies listed in Hong Kong Exchange is also a good representation and Hong Kong is a more accessible market.

The “B” and the “R” in BRIC have been on fire in a good way, stock market and currency wise.  Brazil Ibovespa index year to date return is +23.72% as of 21 April, 2016 and Brazilian Real strengthened against USD by 10.89%.  Russian MICEX +10.71% and Russian Ruble strengthened against USD by 8.8% this year.  Well, the numbers look good and showed nice recovery after last year correction.  The Brazil story is very different to Russia.  Investors are putting money on a potential change of leadership in Brazil but change does not necessarily equals to economic growth.  Typically, the country that host Olympics empties their war chest to put on the games.  There is some ground to consider buy on dream and sell on fact in the Brazil investment story.

Russia economy has been bleeding mainly due to oil price collapse and it was looking very concerning in 2015 as the Russian government tried to defend the Rubles.  In the end, Russian government accepted the currency market was like an ocean and no one could fight against the force of natural.  Beside a falling Rubles and stock market, the government had to deal with the conversations with US and Euro over Ukraine and sending troops to Syria.  Against expectations, some Russian companies survived the storm and emerged stronger.  Typically, these are export driven business with cost in Rubles and revenue in USD or Euro.  For example, steelmaker like Severstal saw its profit margins rising to record level in six years.  Its share price rallied from RUB 600 level at the end of last year to RUB 800 in April.  Even the Russian banks are enjoying the sunshine.  Sberbank has gone up more than 20% since its dip in January.

The “I” and “C” in BRIC are behind.  India Nifty index cover 50 blue chips and its year to date return is down 0.43% and Indian Rupree has depreciated against USD by 0.36%.  India attracted USD 63 billion worth of Foreign Direct Investment (“FDI”) projects in 2015, overtaking China.  This is the first time India top the FDI chart.  So the money has gone in through direct investment although not through buying listed company shares.  China CSI300 index that covers 300 stocks listed in Shanghai and Shenzhen stock exchanges is down 15.29% year to date and Chinese Yuan has strengthened against USD by 0.18%.  This makes China the worst performing market among the BRIC year to date.

Also want to say “Happy Birthday” to the Queen and perhaps next year Donald Trump would represent US to congratulate her.  Will Britain still be part of EU next year?

Lend me 100 and I pay you back 99.6.

Lend me 100 and I pay you back 99.6. 

The Japanese Central Bank started it and the European Central Bank took it to a different level.  Japan’s government has been paid USD 464 million to borrow money since yields turned negative in October 2014.  The European Central Bank (“ECB”) went full throttle with negative interest rates and lowered its overnight deposit from -0.3% to -0.4%.  It is like taxing people with money in bank account.  Mario Draghi, European Central Bank President said it out loud that interest rates would stay very low for at least another year.  Mario is doing everything it could to stop Euro zone economy goes into deflation.  ECB extended its monthly asset purchase to EUR 80 billion a month and will add investment grade euro-denominated bonds issued by non-bank corporations.  This means ECB is practically lending money to non-bank corporations directly.  German mortgage bank Berlin Hyp AG made history by selling a EUR 500m 3-year bond at a yield of -0.162% last week.  There is now over EUR 6 trillion of debt in the world that yields negative which is 29% of the Bloomberg Global Developed Sovereign Bond Index.  Central Banks in Switzerland, Sweden, Japan, Denmark and ECB are all in the Negative Interest Rate Policy (“NIRP”) Club.  What this could mean is that US interest rate and UK interest rate could eventually get to negative as well.  Normal citizens are getting used to getting close to zero for their deposit in GBP.  In the corporate world, its means blue chips companies would enjoy cheap borrowing and they are encouraged to leverage and expand through acquisition.

Marriott and China’s Anbang Insurance Group have made Starwood Hotels and Resorts Worldwide Inc shareholders very happy.  Marriott is keen to acquire Starwood that owns the Sheraton and Westin hotel brands to create the world’s largest hotel chain in the world.  Marriott offered USD 12.2 billion or USD 72.08 per share in November last year.  Anbang put USD 13.16 billion cash on the table in March (equivalent to USD 78 per share).  Marriot increased its offer to USD 13.6 billion with a stock and cash offer on 21 March, 2016.  Anbang may not get the hotels but they have surely flexed their muscle.  Last October, Anbang bought Waldorf Astoria New York for USD 1.95 billion, the largest-ever US real estate purchase by a Chinese buyer.  Anbang is Beijing based, started in 2004, and has 30,000 staff and more than EUR 100 billion in assets.  Anbang has less than 5% market share in the domestic insurance market in China.

Cheap borrowing could also lead a company to the cliff.  Valeant Pharmaceuticals was once a real gem in the fund managers’ eyes.  Valeant made use of cheap funding available.  Buy up companies and increase the price of drugs.  Their big wins included eye-care company Bausch & Lomb and gastrointestinal medicines maker Salix Pharmaceuticals.  Valeant also tried to buy Botox maker Allergan but that did not go through.  Buy low sell high, rule number 1 in trading.  Unfortunately, politics are not exactly science and politicians questioned Valeant aggressiveness in raising two heart drugs prices.  The stock dropped 88% in the last 6 months as of 21 March, 2016.  The company is trying to pivot its strategy through getting a new CEO.  Billionaire investor Bill Ackman’s Pershing Square Capital Management lost USD 764 million in its investment in Valeant.  The board of Valeant invited Mr Ackman to join the board, a very expensive board seat.

The new mega trend is cheapest funding ever is available to corporates.  The old trick is to leverage and buy low sell high.  Borrowing rate at zero means infinite rate of return in theory.  If one company pays nothing to borrow money (or even gets paid to borrow money), any profit this company could make from the loan means huge return.  Too good to be true?  It happened before and probably still happens in some countries where if you know the right person in the government, you get cheap land, cheap construction loan and guarantee buyers and tenants.  Government toll road projects and green energy projects are classic example.  The negative interest rate could make this business model even more lucrative.  This is exactly the purpose of ECB to encourage corporations to invest and grow.  ECB and central banks in the NIRP Club believe this can fight against deflation and increase GDP.  Before that happens, investors should expect to see more mergers and acquisitions in the stock market and stock prices could reach higher level.  There will be winners becoming losers like Valeant.  Very few people have betted on Leicester City winning the league at the beginning of the season.  Quite a few would guess Arsenal getting into top 4.  Some investors would find the Starwood and Valeant.  Some may prefer to take FTSE or DAX index funds to catch the general trend.

Brexit. This suspense is terrible.

Brexit.  This suspense is terrible.

This suspense is terrible.  I hope it will last until 23rd June.  UK referendum to exit Euro zone is a big deal.  Yes to stay and accept the immigrant issues, get one off refund from Eurozone bailout, enhance London financial center status and other terms.  No means exit Euro zone and many things could change from import export tax to individual working visa.  The GBP dropped 2% on 22nd February on the back of London Mayor Boris Johnson joined Brexit campaign.  This shows the financial market may not welcome the possible exit which is generally viewed as bad for business.

One of the smartest UK decisions in history is to retain British Sterling and did not use Euro.  UK could maintain its own independent monetary policy such as interest rate, issuance of debts and budget.  Imagine if UK has to follow Euro zone to adopt negative interest rate.  Look at the headache Switzerland had in trying to defend EUR CHF.  Something is not working in this relationship and both UK and Euro zone have put in effort to mend it.  Prime Minister David Cameron has put in great effort to negotiate the terms for this referendum but the terms seem to be just pain killers. It may ease the pain but does not change the relationship.  If UK citizens vote yes to stay, the big picture remains unchanged.  If UK citizens vote no, UK can decide its immigration policy on Euro zone citizens.

Immigration policy is probably as important as monetary policy.  It has a very long term and deep impact to the culture.  While the facebook, the Instagram and YouTube have flattened the world as every global citizen is exposed to similar information, actual people movement can have big impact to employment, demography, religious, talent structure of a society.  The hedge fund managers and traders may sell off GBP as an immediate reaction to the uncertainty of Brexit.  But these movements in financial market are short term.  Voters need to consider the impact to the future generations.

Global stock market continues to be volatile and fragile.  Some oil exporting countries are liquidating asset to make up of the shortfall in cashflow due to low oil price.  Mutual funds and hedged funds are probably still getting redemption from oil related high networth individuals and family offices.  As stock prices drop, there are margin calls on clients who are leveraged and these margin calls lead to more liquidation.  The low interest rate in USD, EUR and JPY encouraged investors to leverage in the past years.  So the market is deleveraging portfolio that took years to build.  The selling is so fierce that it distorts market valuation to 2008 level.  If this is 2008 and history repeats, then it is a year to bargain hunt.  Some investors may consider buying index funds.  However, the banking sectors, the oil and gas companies, commodities sector and properties in some markets deserve further consideration.  European banks are once again under the spot light and there have been a lot of news about Deutsche Bank.  Deutsche Bank is trading at EUR 14.92 as of 24 February, 2016.  It has fallen 33.3% since 31st Dec 2014.  Credit Suisse, BNP, HSBC, Barclays have all fallen 39%, 21%, 23% and 26% in their share price since 31st December, 2015 respectively.  No bargain hunting here.

BP and Royal Dutch Shell have gone down 3% and up 4.6% in share price since end of last year.  In the same period, oil price is down 14%.  BHP Billiton, Rio Tinto and ArcelorMittal share prices are 10%, 8% and 19% down year to date respectively.  Many of these companies have debt to be re-financed and even if some of them managed to find lenders, the cost of fund is likely to increase.  There is an over capacity issues in the resources sector and consolidation will happen.  It is probably too early to bargain hunt but there should soon be some emerging opportunities in oil and gas stocks.  They just got hammered too badly.

Property prices in Asian cities like Hong Kong and Singapore are softening.  This is because of the government policies in Hong Kong and Singapore have been armed to deflate the property bubble.  On the other hand, residential property prices in China tier one cities like Beijing, Shanghai, Shenzhen are rising 30% to 60% in the past 12 months according to local property agents.  Some high end luxury properties in these Chinese cities are selling at over GBP 1,000 per square foot.  Chinese government has narrowed the gate for money outflow and the local stock market has been more than disappointing.  This combination drives excess liquidity to tier one cities property.  London properties will probably continue to attract Asian buyers.

Global stock markets to start 2016 with a nose dive

Global stock markets to start 2016 with a nose dive

FTSE 100 index ended 2015 at 6,242.32 and took a nose dive to 5,673.58 closing level on 20^th January. That was a 9.1% drop in less than a month. As of 25^th January, FTSE 100 recovered a little bit from the low and closed at 5,877. In the same period from 31^st December, 2015 to 25^th January, 2016, Eurostoxx 50 Index dropped 8.1%, Dow Jones dropped 8.8%, Nasdaq Composite dropped 8.7%, Japan Nikkei 225 dropped 10.1%, China Shanghai Composite dropped 17.0%. This is a truly global sell off and there is no escape. Institutional selling has to be part of it. What happened? Did Santa send the wrong presents to the fund managers? One explanation is the butterfly effect of falling oil prices is hurting oil rich countries war chest. Hence these countries are selling their mutual funds and overseas investment to make ends meet. Saudi Arabia has been withdrawing billions from markets and it is considering to list Aramco, its state-owned oil giant.

Oil price is at 13-year lows and went below USD 30 a barrel. US, Russia and Saudi Arabia are neck to neck as the 3 biggest oil producers in the world, each at above 10 million barrels per day. For countries like Russia, Saudi Arabia, Nigeria, Venezuela who are living off petro dollar, a lower oil price could also force them to sell more to maintain cash flow. The 13-member oil cartel OPEC led by Saudi Arabia abandoned its policy of restraining production to control oil prices in 2014 and some of these countries are pumping faster than ever to pay for their bills. Iran, with the world's forth largest oil reserve base, is ready to pump up its oil production as sanctions against it are lifted. Such increasing supply put oil price and producers' financial health in a downward spiral.

Let's also point fingers to US uplifted its 40-year ban on oil exports. US oil producers can export crude oil after a surprise change in policy that was strongly opposed by President Obama and fellow Democrats. In December 2015, politicians in US Congress made a compromise. Democrats agreed to lift the 40-year ban on US crude oil exports. Republicans agreed to extend tax subsidies for wind and solar by 5 years. The 30 percent tax credit for solar was going to expire in 2016 and the tax credit for wind expired in 2014. The effects of these policy changes are estimated to be USD 25 billion or the wind and solar energy sectors. Most US oil producers need oil price at USD 40-50 per barrel to have a profitable business. So with oil struggling at USD 30 a barrel, most US oil producers are not going to produce much and definitely not to export any oil overseas. However, this means oil price could be capped at USD 50 or so because US production can significantly increase supply when pricing is right.

As of 25^th January, GBP lost 3.3% against USD since end of 2015 and it is at a 7-year low. Basically, GBP is catching up with other currencies and giving in to the strong USD. As all major currencies are weakening against the USD to increase export competitiveness and release downward pressure on asset prices, the GBP eventually followed. The strong USD finally transferred to a US stock market correction which sent a quiver to stock markets all over the world.

China's energy demand is growing at the slowest pace since late 1990s and growth in energy-intensive sectors such as steel, iron and cement collapsed. It has waved goodbye to double digit economic growth and trying to keep up 6% GDP growth a year. The Chinese Yuan got its place in the Special Drawing Rights basket, a reserve currency basket decided by the International Monetary Fund last year and they must be exhausted. The Yuan has fallen 1.3% year to date against USD, 4.1% since end of October 2015, 6% since 10 August 2015. The Yuan depreciated 2.9% in a single day on 11 August 2015. A weakening economy, a falling stock market and a falling currency in China reminds people of what happened to Russia. The BRIC countries have all lost their steam and the world economy is like a plane with an American captain with all engines stalled but 1 and running on reserve fuel. Perhaps the world economy is not crashing like in 2008 but certainly January was a hard landing. Just hope that it was a landing and not just going through turbulence.

US rate hike . So what?

US rate hike . So what?

Finally, since June 2006, US interest rate has gone up again. Fed Rate has gone up by 0.25% to a range of 0.25 to 0.5%. So why did US Fed increase interest rate in Decembere? There is no perfect timing and perhaps the Fed missed a better slot earlier. Like before the China A shares bubble burst in July. The tension between the European Union and Russia over Ukarine, the Syria rufugees and the unhealing Greek situation have nailed Euro to the floor. Commodities currenies such as Canadian Dollars and Australian Dollars fell as China economic slowed down. China Renmanbi also joined the dark side to depreciate its currency to ease the downward pressure in property and stock market.

Another angle is that the purpose of loosening in monetary policy and dropping interest rate to zero was to save the US finanicial industry. The AIG, Fannie Mae and Frediie Mac, Citibank and other financial institutions that were paralized from the shock of Lehman bankrupcy. Now these Financial Institutions have regained strength and the US Fed can increasae rate. Increase interest rate is like sending US economy to the gym for training. Make the economy sweats, gets fit and builds muscle and prepare for the next bubble bursting. US companies can take advantage of the US Dollar strength to do acquisition. Many foreign markets and currencies have fallen against US Dollar. It could be shopping time.

Bond market would suffer especially bonds with fixed coupon. As interest rate goes up, these bond prices tend to drop. The longer the maturity of the bonds, the more they could drop in prices. The currency market is harder to read as USD is already so strong. Long USD short EUR is an attractive carry trade. Banks charge clients to deposit EUR and pays clients interest on their USD deposit. Would EUR drops to less than a USD? Many institutions have shorted EUR agasint USD and rode the long term trend. Many hedge fund managers and currency traders who short EUR with high leverage got burnt from wrong timing as EUR could rebound fiercely. For those who are non professional but have a strong conviction in the currency market, lower or no leveage position could help you to ride the longer trend and withstand sharp market movement. Leverage or margain trading are definitley high risk investment as the investors could lose more money than they put up in the first place, leading to debt beyond affordability.

For stock investors who feel EUR will be further weakened against USD, companies that are EUR sensitive could be interesting. For example, international airlines that have most of the cost in EUR but getting revenue in USD. Similarly tourism sector, luxury goods, engineering companies and manufacturers. Eurostoxx 50 Index ETF or the German DAX Index ETF are convenient investment tools to get exposure to the Euro zone story. However, the increased compeitiveness due to a weak Euro is offset by many risk factors. The Euro zone is a live case study of a system that is facing all the uncontrollable risks at a corporate level. Currency unpeg, political risk, war, terrorist attack and social unrest are all real risks in the Euro zone. Buyers beware.

There are 2 other economies that could potentially continue their growth in a rising US interest rate environment. UK is likely to enjoy its physical separation as an island from the rest of Europe and its independency in Great British Pound. UK global software and IT sectors are competitive. Education sector is a real GDP contributor and the growing population in oversea university students drives rental market nearby and supports property prices. UK economic grwoth is expected to be around 2.9% in 2015 and it is the second fastest in the advanced world after USA. UK economy is expected to be 6.1%I larger than its peak before the financial crisis. Ireland is the only English speaking country in Europe using EUR. Its GDP rose by 7% in the first half of 2015, probably the fastest in the Euro zone after surpassing the pre-crisis high last year. Its low corporate tax rate of 12.5% attracts phamaceutical companies like Pfizer and tech companies like Apple, Google and Facebook to setup European base.