City Watch: Brian Tora on hopes for a resolution to the euro saga
IT IS an indication of how crucial Europe is seen to our future economic wellbeing that markets reacted positively to the more proactive stance adopted by the European Central Bank last week and were able to shrug aside further signs of China’s growth slowing.
Glencore raising its bid for Xstrata clearly did no harm, but generally markets have been buoyed by a belief that some resolution of Europe’s problems may be in sight.
Not that we are out of the woods yet. A crucial vote in the German parliament could still upset the applecart. Indeed, so important is the outcome that the veteran hedge fund manager George Soros has stated that Germany should stand fully behind the ECB or withdraw from the single currency bloc. It still has a feel of a story set to run for some time.
Company news is slowing, but the corporate world has generally proved to be in pretty good shape.
With Glencore’s improved bid terms the dominant story as the week commenced, other news was somewhat overshadowed. BP seems set to continue its programme of disposals, while it appears the Japanese economy continues to flounder. We seem locked into a period of unexciting growth prospects for the developed world which will clearly weigh on emerging countries.
You may also want to watch:
But markets remain good value in the main, a reflection of the fact that share prices have made little progress for more than half a generation.
The benchmark FTSE 100 share index continues to languish below 6000, a level it first broke through some 15 years ago, but, still, we can hope that better news from Europe could allow us to continue to make progress.
- 1 Film crews shooting new Netflix film in Suffolk village
- 2 Two mega prisons for 3,500 inmates set to be built near RAF base
- 3 Suffolk-based former Marine found dead after 10-month disappearance
- 4 Five people injured in 'violent disorder' at Newmarket racecourse
- 5 Overturned trailer causing delays on roundabout near Bury St Edmunds
- 6 Town sign 6ft 5ins striker as Nsiala, Jackson and Barry all start for U23s
- 7 Aldi to open 100 new supermarkets with eyes on four towns in Suffolk
- 8 Air ambulance called to incident on Bury St Edmunds estate
- 9 Fiat 500 on its side after crash in Woodbridge
- 10 Lorry overturns after crashing into office building - warning over delays
: : Brian Tora is an associate with investment managers JM Finn & Co