UK - Market insiders are predicting positive times for the UK equity market over the next few months.
AXA Investment Managers head of UK equities Stuart Fowler said the UK had “moved through a turning point, leaving the bear market of the last two years behind us”.
He added: “The speed and persistence of the recovery post-September 11 has been sparked by a new acceptance that the world is in recession and at last we can see governments and companies tackling the downturn with vigour.”
Fowler believes equity investors can be confident that “renewed profit growth is over the horizon” - despite an expected rise in unemployment and fragile consumer confidence.
Fowler said the the UK economy was one of the most robust within the Organisation for Economic Co-operation and Development countries. Sound UK and US government finances as well as falling interest rates would allow fiscal stimulus to underpin a recovery, Fowler said. • F&C Management group chief investment officer Arnab Banerji predicts the global economy will recover next year.
He said: “The US, Europe and Japan are all in recession or facing recession. Despite this gloomy picture, the global economy will be out of the doldrums by the second half of next year.”
And SG Asset Management head of fixed interest Paul Rayner suggested a global recovery would see the end of the trend where bonds have outperformed equities over the last two years.
He said: “We do think equities will outperform bonds over the next year or two. Equities look reasonably cheap and given the reflationary moves of central banks this will be beneficial for the equity markets going forward and negative for the bond markets in the long term.”
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