GLOBAL - Fund managers are forecasting modest equity returns over the coming 12 months - their most optimistic annual prediction for two years.
JPMorgan Fleming Asset Management said European and Japanese equity markets remained the two most undervalued developed markets, predicting returns of up to 15%.
Legal & General Investment Management financial economist Andrew Clare agreed and said: “After a couple of years in the doldrums, Europe and Japan are showing signs of recovery.
“As always, confidence is the key, but as the economic picture improves hopefully 2004 will be less of a rollercoaster than recent years.”
LGIM predicted the FTSE100 would end the year at 4700 – 190 points up on the 2003 close of business figure.
Deutsche Asset Management global chief economist Steven Bell said the last six months had been a “sweet spot of economic recovery”.
He said: “Growth has consistently beaten expectations in the US and Asia. More recently, Europe has joined the party. With inflation and interest rates still very low, most of the gains have fed straight through to profits.
“Things still look good for 2004 but investors around the world start the year in an optimistic mood and companies will have to work hard to beat those expectations.”
But JPMorgan global strategist Gary Dugan said the outlook was less optimistic for the North American equity market.
Most respondents in this week's Pensions Buzz do not think businesses should be able suspend AE contributions if in financial distress.
Former BHS owner Dominic Chappell has lost the appeal against his section 72 conviction and sentence for failing to hand over information to The Pensions Regulator (TPR).
This week's top stories include Marsh and McLennan Companies agreeing to buy JLT, and the home secretary calling for AE to be scrapped in a no-deal Brexit scenario.
Lesley Titcomb says the watchdog wants closer interactions with pension funds to spot problems sooner and act before having to use its more stringent powers