Earlier this year, our recommendation was to maintain liquidity position. Strong public debt had to stress and raise interest rates, equities was uncertain territory. We made a positive outlook, without reservations, United States, for the momentum to get the economy going, but it just kept the first half of the year. The case of Spain was and is special by the weight they have in the bank rate and the negative influence on them in public debt and real estate sectors, especially the latter, which continue to weigh on the balance sheets of other sectors of the English economy. However, 2011 will be a good year for European equities, which is justified by the six following grounds.
First, we must take into account that the euro area is 57% of Europe's Stoxx 600 index, but the recommendations are for the set. The economic upswing in the European core, euro or not is moderate but steady, the trade balance is in equilibrium, and the euro continues to maintain a 30% appreciation on its initial parity with the dollar. Much has been made on the dangers of debt reduction on the growth of the global economy, but the world economy reported growth of 4% and 8% for emerging and 2% for the rest. Second, if you take the historical average stock price on variables such as sales, liquidity, profits, dividends, the current values \u200b\u200bin general are not particularly attractive, though not far from the mean. However, the fall has been so strong that allows upward revisions, plus the risk premium for action on debt and compared to other markets is well, favoring equities.
A third argument is the situation of liquidity provided by central banks, together with low interest rates. If the above is added that inflation is not high or low, the environment for equities is ideal. A fourth point is the reallocation, for institutional and retail investors, fixed income to equities, this is being seen now, whether by insurance companies as the flows will be listed mutual funds. Fifth, European companies gain in growth and margins, and are not cost pressures, especially those with business markets and emerging economies are in very good shape. Arguably there is a deep value in European companies. And finally, it presents a future of better regulation and less debt, less business ventures that will benefit the long-term investment is not as spectacular but more stable.
Against this background, the European indices are seen in the year between 10% and 15%, closer to the latter, prevailing basic resources, food, mining, retailers, and financial sector with less exposure to public debt and real estate. Above all, companies who do business with and in emerging countries. Gumersindo
First, we must take into account that the euro area is 57% of Europe's Stoxx 600 index, but the recommendations are for the set. The economic upswing in the European core, euro or not is moderate but steady, the trade balance is in equilibrium, and the euro continues to maintain a 30% appreciation on its initial parity with the dollar. Much has been made on the dangers of debt reduction on the growth of the global economy, but the world economy reported growth of 4% and 8% for emerging and 2% for the rest. Second, if you take the historical average stock price on variables such as sales, liquidity, profits, dividends, the current values \u200b\u200bin general are not particularly attractive, though not far from the mean. However, the fall has been so strong that allows upward revisions, plus the risk premium for action on debt and compared to other markets is well, favoring equities.
A third argument is the situation of liquidity provided by central banks, together with low interest rates. If the above is added that inflation is not high or low, the environment for equities is ideal. A fourth point is the reallocation, for institutional and retail investors, fixed income to equities, this is being seen now, whether by insurance companies as the flows will be listed mutual funds. Fifth, European companies gain in growth and margins, and are not cost pressures, especially those with business markets and emerging economies are in very good shape. Arguably there is a deep value in European companies. And finally, it presents a future of better regulation and less debt, less business ventures that will benefit the long-term investment is not as spectacular but more stable.
Against this background, the European indices are seen in the year between 10% and 15%, closer to the latter, prevailing basic resources, food, mining, retailers, and financial sector with less exposure to public debt and real estate. Above all, companies who do business with and in emerging countries. Gumersindo
Ruiz.
(Grupo Joly 21/12/2010)
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