25 September 2015
How the need for income could underpin UK stocksLast week this column touched on the issue of the vexed issue of the valuation of the UK stock market, using market capitalisation to GDP as the key metric. The results provided a bit of a question mark over the long-term direction of stocks, given that on this metric the UK looks expensive relative to its own history, unless corporate...
31 July 2015
Why clients may yearn for Japan despite the yenThe scrapping of a proposed $2 billion design for the 2020 Olympic Stadium in Tokyo and a corporate accounting scandal at the giant Toshiba conglomerate put Japan firmly back in the headlines. Even if this is not the sort of news that Prime Minister Shinzō Abe would rather not be making, his “Three Arrows” reform package continues to chime with...
22 July 2015
What we can all learn from China’s stock market slideYou may well be aware of the extraordinary movement seen over the past month – indeed the past year - in the Chinese equity market. Whether you have any holdings or not, via funds, exchange-traded funds or London-listed Chinese stocks, there are clear lessons which we can all draw from the stunning rise and sudden collapse in the Shanghai and...
3 July 2015
Macro and multi-asset funds look to make the headlinesIn a year when we have already seen the Swiss franc rocket, crude oil prices bounce and sovereign bond prices gyrate horribly investors could be forgiven for feeling exhausted as we approach the summer holiday season. Yet the ongoing Greek drama, an abrupt correction in Chinese stocks and debate over the timing and speed of interest rate rises in...
24 June 2015
Asia look rattled by the greenback’s riseWhether the reason is concerns over the timing of US interest rate rises, fatigue with the ongoing Greek debt drama or a simply the traditional summer lull, equities are giving up some of the ground earned during the earlier part of the year. Moreover, Emerging and Frontier markets have ceded nearly all of their gains for 2015 and Developed arenas...
19 June 2015
Markets look for a better deal from raw materialsInvestors know all too well that following the crowd – the consensus – is usually a quick way to the poor house. Meanwhile, going against the herd can often bring the best long-term results, even if the wait for market opinion to turn and go your way can often be longer than expected and therefore uncomfortable.
At the moment the one asset class...
3 June 2015
Staying with Asian equities for good long-term reasons‘It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness.’ Famous words written about an earlier period of upheaval. But they could just as well be describing the contradictions in Asian markets this year.
Investors may be confused, and with good reason. On the one hand, reform-minded leaders are...
1 June 2015
Waiting for Uncle Sam to turn the cornerOne of the most interesting developments of 2015 is how the market's enthusiasm for US equities appears to be cooling. Even the dollar's strength relative to sterling offers only a minor amount of comfort to UK-based clients who will, ultimately, be banking their returns in pounds and pence rather than nickels and dimes.
US is lagging the pack in...
29 May 2015
How should investors react following the Election?The recent surprise General Election result in the UK has given the equity market a short term boost, but how should investors react? David Cameron’s Conservative party won an overall majority at the election on 7th May. This was not anticipated by polls which had indicated the likelihood of a hung parliament and the probable need for another...
18 May 2015
Election result offers fresh questions as well as answersAccording to T.S. Eliot’s multi-layered poem The Waste Land April is the cruellest month, but if you are Ed Miliband, Nick Clegg or Nigel Farage then May is already proving to be no fun at all. Rough winds have given all three a vigorous shaking and potentially left their careers with all too short a date, from their perspective at least, if not...
20 April 2015
Little fish can be sweetSmall cap stocks tend to outperform while the good times roll, bulls are in charge and risk appetite is elevated. The chart below shows how the FTSE Small Cap index has left the FTSE 100 for dead during the course of the bull market which began in March 2009 and even the AIM All-Share has (just) managed to outpace the UK's megacap benchmark.
Mid -...
10 April 2015
Markets continue to follow the moneyThis month (4 April) marks the second anniversary of Japan launching its own version of Quantitative Easing (QE). When the scheme was first announced by Bank of Japan Governor Haruhiko Kuroda, the idea was to let QE run for two years and then stop. That deadline now looks to have been quietly dropped, especially as Kuroda actually sanctioned an...
13 March 2015
Why banks are still too big to ignoreBanks continue to make the headlines and not necessarily for the right reasons. Lloyds may have pleased investors by reinitiating dividends after a gap stretching all the way back to 2008's interim payment but earnings figures were generally disappointing and the sector has lagged the FTSE All-Share over the past year, as if to suggest the market...
27 February 2015
Become a convert to the income causeWhile the majority of clients and advisers may have little time for dealing with the intricacies of stock-specific research the dividend cut announced by FTSE 100 Centrica earlier this month (19 February) is unlikely to have passed by unnoticed.
The company's new chief executive, Iain Conn, who only took the reins from Sam Laidlaw in January...
20 February 2015
Why China's central bank may hold sway in the Year of the SheepPicking the right asset class, individual geographic market and the right funds or stocks to play that choice is not just about finding the best economic growth. Nowhere exemplifies this better than China.
Despite a 140% increase in GDP in absolute, local currency terms over the past seven years, the Shanghai Composite languishes some 46% below its...
27 January 2015
How to stay safe in the search for incomeMarkets remain fixated by the European Central Bank's (ECB) decision to launch a Quantitative Easing (QE) programme last Thursday (22 January) and the results of the Greek general election (25 January). The events look interconnected anyway, as the timing of the ECB's policy shift leaves it with scope to keep markets sweet by using any bond...
28 November 2014
Advances in energy could fuel a lasting recoveryAs the Paddington Bear film hits the nation's cinema screens, Darkest Peru is going to attract a fair bit more attention than usual and from a financial perspective Lima's government is trying hard to write a few headlines of its own. According to the Financial Times newspaper, the Peruvian finance minister, Alonso Seguera, this week (24 Nov)...
7 November 2014
The race to the bottom begins againLast week's (31 Oct) monetary policy announcement from the Bank of Japan electrified the Tokyo stock market, pushed yields on ten-year government bonds ever low and at the same time drove a stake through the heart of the yen - perhaps appropriately enough given it was Halloween, after all.
The Japanese counter has since slipped further to around...
