SEB: Investment Outlook: Tensions in Europe are making capital markets a challenging territory
(Thomson Reuters ONE) -
The task of European political leaders - striking a balance between austerity
and growth - is a challenge that is having an impact on capital markets. Right
now the focus is on whether or not Greece will stay in the euro zone, and we are
choosing to maintain a high level of preparedness for the coming market turmoil.
There are great tensions among voters because of the austerity programmes now
under way around Europe, and the political picture will remain a risk factor for
financial markets. The era of generous political programmes is past, and the
consequences are painful. Meanwhile the solution to debt problems is economic
growth.
"Recent weak market performance has two main explanations. Conditions in the
euro zone are familiar to investors, but their outcome is highly uncertain.
Political tensions after the elections in Greece and France add a further
dimension of uncertainty. The situation of Spain's banks is also creating
turmoil in the markets, and until it is clear what the end result will be, this
element of uncertainty will persist. The other main reason for the weak markets
is that the global macroeconomic picture has recently been less vigorous than
expected. The combination of slow real growth and financial problems is not good
for capital markets, and stabilisation looks likely to be at least a month or so
away," says Hans Peterson, Global Head of Investment Strategy at SEB Private
Banking.
In spite of everything, the markets offer potential for those with a healthy
sense of selectiveness, althougn risk appetite remains low, according to Mr
Peterson. He continues:
"The search for returns has intensified. Above all, investors are seeking
alternatives with limited or modest risk yet attractive returns. Corporate
bonds, especially in the high yield segment, and emerging market bonds are two
attractive fixed income alternatives. For those who are prepared to assume the
risk involved in owning equities, companies with high dividend yields may be
good alternatives."
For investors, 2012 has largely been dominated by politics. The key task for
European political leaders should be to create confidence and positive
expectations among households and businesses, in order to generate demand for
consumption and capital spending.
"Which tools they use will vary, but the common element is that it will remain
necessary to continue restoring order to public finances. Decision makers must
ensure that households and businesses understand these actions. Their decisions
must be perceived as credible, successful in the long term and, especially, as
fair. But what is economically desirable is of course not always compatible with
what is political feasible. The risk is that there will be greater focus on
easing public belt-tightening requirements and less focus on measures that will
increase optimism and growth," says Lars Gunnar Aspman, Senior Economist at
Investment Strategy.
Investment Outlook gives readers an in-depth look at the investment climate and
prospects for seven asset classes. It also provides advice about current risks
and opportunities in the art of investing. The report can be read in its
entirety at http://newsroom.sebgroup.com/en.
For further information, please Press contact
contact Claes Eliasson, Press & PR
Hans Peterson, Global Head of +46 76 396 53 19
Investment Strategy,
+46 8 763 69 21
Lars Gunnar Aspman, Senior Economist
Investment Strategy,
+46 8 763 69 75
SEB is a leading Nordic financial services group. As a relationship bank, SEB
in Sweden and the Baltic countries offers financial advice and a wide range of
financial services. In Denmark, Finland, Norway and Germany the bank's
operations have a strong focus on corporate and investment banking based on a
full-service offering to corporate and institutional clients. The
international nature of SEB's business is reflected in its presence in some
20 countries worldwide. On March 31, 2012, the Group's total assets amounted
to SEK 2,331 billion while its assets under management totalled SEK 1,317
billion. The Group has about 17,000 employees. Read more about SEB at
www.sebgroup.com.
Press release:
http://hugin.info/1208/R/1613794/514000.pdf
Investment Outlook:
http://hugin.info/1208/R/1613794/514002.pdf
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(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: SEB via Thomson Reuters ONE
[HUG#1613794]
Unternehmensinformation / Kurzprofil:
Datum: 22.05.2012 - 10:31 Uhr
Sprache: Deutsch
News-ID 148682
Anzahl Zeichen: 5375
contact information:
Town:
STOCKHOLM
Kategorie:
Business News
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