GLOBAL - Deutsche Bank has released its contribution to the recent tide of market outlooks for 2002 with a generally optimistic tone.
Risk assets such as credit, equity markets in general, and bonds should do well, says Deutsche. High-beta markets such as Europe and emerging should fare particularly well in the predicted economic recovery that’s set to mimic that of 1993 and early 1994.
According to Deutsche, receding recession, falling inflation, and low short-term interest rates characterise the next 11 months - close to the ideal cyclical financial asset environment in which liquidity is ample, growth is strong enough to allow for modest profit expansion, and there is enough slack in the system to allow inflation to fall an rates to stay low.
Other key points from the report are:
- the US economy should recover gradually in 2002. The rest of the world follows with a lag but global capacity utilisation will remain slack. Inflation tumbles;
- Economic momentum favours cyclical markets (emerging markets, Euroland, Japan). Equity valuations are not attractive in the US versus bonds but are generally cheap elsewhere especially versus cash;
- Japan's structural problems continue and with zero interest rates the yen is likely to be the worst performing major currency this year. The euro is expected to recover against the dollar but sterling should lag. By Madhu Kalia
Jonathan Stapleton asks whether newly-accredited professional trustees should be a statutory fixture on pension scheme boards.
Savers are being warned by the Insolvency Service to guard their pension pots from investment scammers and negligent trustees as it winds up 24 companies.
Respondents say they should only be required in certain situations as the system is not broken.