If history is any guide, and equity prices in the United Kingdom unwind in a pattern similar to the 1976 or 1987 bear markets, then most of the damage inflicted by the current downturn is almost over. If it plays out similarly to 1972–74, however, there still could be more pain to come.
Will Europe increase fiscal spending at the risk of undermining both the Stability and Growth Pact, as well as the EMU?
While linkers may be inexpensive relative to nominal gilts, they are no bargain.
The euro’s appreciation against the U.S. dollar holds symbolic importance for Europeans, but negative consequences for their economy. Until domestic demand in the region improves, the strengthening euro could undermine the Continent’s economic growth, corporate profits, and equity prices.
Historically U.K. equities have outperformed European equities during periods of market weakness due to the U.K. market’s weighting in classic defensive groups. However, the outperformance this go-round is due to the financial sector. The U.K. banking subsector was boosted by acquisition activity and investors’ preference for U.K. banks’ low volatility, high dividend yields, and strong…
Although valuation metrics show mixed results, we remain cautiously optimistic about investing in European and U.K. equities.
In the United Kingdom inflation is under control but increasing, driven by strong consumer spending and rising oil and housing prices.
An analysis of the rapidly expanding private equity markets in the U.K. and continental Europe using the following criteria: sources of capital, market segments, valuations, leverage, and exit environment. Also included are summaries of individual country markets and exhibits covering capital commitments, EBIT purchase multiples, IPOs, M&As, and distributions to limited partners.
U.K. investors, although weary of high global equity correlations and the recent outperformance of U.K. equities, should not decrease their non-U.K. equity allocations for the following reasons: correlations have varied widely and could fall again; and U.K.-only mandates sacrifice 90% of the available opportunity set, represent relatively concentrated portfolios unless they take on significant tracking…
Equity ownership remains low in Europe due to undeveloped public equity markets, generous pension plans, and the lack of tax incentives. European bulls cite the following to argue that ownership will rise: (1) the bull market of the late 1990s raised awareness of equities, (2) with falling interest rates, Europeans are looking to equities for…