A weak yen boosts Japanese equity markets

Equity markets across Asia generally declined during October, dampened by uncertainties over the outcome of November’s US Presidential election and a drop in the price of oil. In comparison, Japanese equity markets rose relatively strongly during October, boosted by a weakening in the value of the yen. The Nikkei 225 Index rose by 6.1%, while … Continue reading “A weak yen boosts Japanese equity markets”

US Presidential election takes centre stage

The imminent Presidential election continued to absorb much of the limelight in the US. On balance, investors appear to believe that Hillary Clinton will emerge victorious, although the House of Representatives is expected to remain in Republican hands, albeit with a lower majority. Nevertheless, in a close-run – and often bad-tempered – election campaign, investors … Continue reading “US Presidential election takes centre stage”

Sterling remained under pressure in October

Sterling remained under pressure in October amid ongoing nervousness about the UK’s Brexit strategy. The pound reached its lowest level against the US dollar for thirty years and its lowest level against the euro since 2011. During the month, Prime Minister Theresa May confirmed that she intends to invoke Article 50 and start the process … Continue reading “Sterling remained under pressure in October”

Oil and financials dominated in September

UK equity growth – UK equity indices rose during September, although short-term sentiment and market movements were affected by developments in the financials and energy sectors, and broader speculation over US monetary policy. The banking sector was undermined by a steep fall in the share price of Germany’s Deutsche Bank The price of oil received … Continue reading “Oil and financials dominated in September”

Brexit is not Brexit?

Much to the surprise of legal experts, the government and, presumably, to those who voted to leave the European Union, Brexit is now once again in doubt. The High Court has declared that the Government cannot trigger Article 50 without a parliamentary vote. The Government will appeal, of course, but sterling is already higher on … Continue reading “Brexit is not Brexit?”

Has China borrowed too much?

The worriers are back warning us that China has borrowed too much. If China was assessed by the same standards as the advanced world, they would be taking a different view. In China, state debt is only around 40% of GDP, compared to six times that amount in neighbouring Japan. The hostile commentators look at … Continue reading “Has China borrowed too much?”

The 3 Rs of India: reforms, RBI and (US) rate hikes

It’s been a really busy quarter for reform hasn’t it? Reforms in India are like buses: none appears for ages and then several arrive at the same time! Well that’s not quite true because change was taking place but it was of the incremental, under-the-radar sort. That’s one reason why India jumped 16 places in … Continue reading “The 3 Rs of India: reforms, RBI and (US) rate hikes”

How the stockmarket returned 81% without moving

The FTSE 100’s record high barely beats the level of 1999, yet investors have been richly rewarded, highlighting the power of dividends. Reinvesting dividends is one of the most powerful tools available to an investor to boost returns over time. If you had invested £100 on 30th December 1999 in the FTSE 100, the capital … Continue reading “How the stockmarket returned 81% without moving”

Should we worry about Japanese debts?

Investors like to worry. When you’ve got your money at risk it is natural to do so. It is commonplace to read about the very high levels of Japanese state debt, with some querying how much longer it can carry on. Japan has the highest level of state indebtedness of the main economies. Its gross … Continue reading “Should we worry about Japanese debts?”

Infrastructure spending: What’s not to like?

Is it time for an infrastructure push? The International Monetary Fund (IMF) thinks so, and we agree. Public infrastructure investment not only provides a short-term lift to demand; it also helps economies to grow faster without hitting capacity constraints. And to these two benefits, we would add a third: increased infrastructure spending could help relieve … Continue reading “Infrastructure spending: What’s not to like?”

Stable growth for China as long term costs mount

Chinese GDP growth was in line with expectations but is there a slowdown ahead? Chinese third quarter GDP grew 6.7% year-on-year, in line with expectations, and unchanged from the second quarter. A breakdown of the data reveals an acceleration in primary industry and a smaller increase in the tertiary, or services, sector. Manufacturing managed stable … Continue reading “Stable growth for China as long term costs mount”

A tale of two visits

John Redwood, Chairman of the Investment Committee at Pan Asset takes a look at the Indian and Chinese stock markets. On the 20th October the President of China Xi Jinping will arrive in London for a state visit. The guest of the Queen, there will be a grand banquet at Buckingham Palace, and business meetings … Continue reading “A tale of two visits”

US election: uncertain predictions and market risks

What Brexit teaches us about trusting betting exchanges and polls in the run-up to the US election, and some of the market implications of the possible results. Betting exchanges vs polls We learned from the Scottish referendum that betting exchanges were a better predictor of a particular voting outcome than the official polls. The Brexit … Continue reading “US election: uncertain predictions and market risks”

Sterling work…

With sterling having just plunged to a 31-year low against the US dollar, it’s interesting to note some of the similarities between the UK now and back in 1985. We had a female prime minister at the helm (Margaret Thatcher), while rival political factions vied to take control of the UK’s Labour Party (Neil Kinnock … Continue reading “Sterling work…”

Sterling weakness and plenty of money

The UK has been battling down its government deficit for the last seven years.  In the March Budget book they forecast an annual deficit of £55bn for the present year, down from £72 bn this year. They also forecast a falling path for UK state borrowing as a proportion of our GDP, with net debt … Continue reading “Sterling weakness and plenty of money”