Collins Stewart Wealth Management comments on current global investment outlook
Collins Stewart Wealth Management expects global growth to continue to recover, albeit at a slower pace
• Developments in the euro region have regrettably overshadowed what has remained a generally supportive macro-economic environment
• We continue to feel that there are many better investment opportunities than lending to the UK government for an extended period
• We remain firm believers in the Asian and emerging market growth story
• Investing in technology and healthcare are now alternative ways of capitalising on the superior growth profile of Asia
• Equity market valuations are not overly demanding at current levels
• We cannot rule out a re-test of recent stockmarket lows, before further gains are made and we do not believe that a broad “double-dip” recession is the most likely outcome
Commenting on the current global investment outlook, Nigel Cuming, Chief Investment Officer, at Collins Stewart Wealth Management, said:
They think it’s (eur)over. Financial markets were undoubtedly driven by developments in the eurozone during the second quarter, as Greece’s precarious financial position became sufficiently untenable to finally prompt policymakers to intervene in an attempt to restore some form of order. The rescue packages only provided some short-lived relief. However attention quickly shifted to the concerns over the fragility of the European banking system. Ultimately, investors are not yet convinced that Greece will not default and fear that this could trigger broader contagion throughout the region. The total sovereign debt exposure to troubled borrowers by European banks is large in absolute terms, albeit relatively moderate in the context of the previous subprime meltdown. BCA estimate that, in a worst case scenario, losses at European banks could total $400bn, a sizeable sum, but considerably less than the c.$1 trillion cost of the whole 2008/2009 crisis.
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