Business
Investors’ Confidence Returns In Developed Markets
Sentiment toward stocks rose around the world, reaching a record level in the US, as reports on manufacturing showed the global economy is recovering and investors bet that profits grew for the first time since 2007.
Investors forecast gains in each of the nine countries represented in the Bloomberg Professional Confidence Survey for the first time since the data began in 2007. The sentiment measure for the Standard & Poor’s 500 Index climbed 35 per cent to 54.37.
That’s only the second time the reading exceeded 50, signaling participants anticipate a rally in the next six months. The responses from 4.101 Bloomberg users were gathered January 4-8 as the MSCI World Index added 2.6 per cent.
Rising factory output in the US China and Europe helped send the S & P 500 to six straight gains to begin the year.
Analysts estimate that fourth quarter earnings reports beginning this week will show S&P 500 profit rose 62 percent, according to data complied by Bloomberg.
The results will follow the biggest annual rally since 2003 for MSCI World Index of equities in 23 developed nations. “The market is clearly in an upside trend”, said Luis Benguerd, a trader at inter-brokers Espanola in Barcelona, Spain, who participated in the survey.
“As long as we keep getting these macro figures and companies do as good as analysts expect them to do, that’s enough to keep this trend going”
The MSCI World has rebounded 74 percent from a 13-year low in March after the Federal Reserve left its benchmark interest rate at almost zero and the US government lent, spent or guaranteed as much as $9.66 trillion to end the recession and unlock credit markets.
US factory output expanded in December at the fastest pace in more than three years, according to a report from the Tempe, Arizona-based Institute for supply Management. Chinese manufacturing surged the most since April 2004 last month, data compiled by London-based H SBC Holdings Plc and Market Economics showed. Production increased for a third month in December, Markit said.
The three reports were released January 4. The Bloomberg Sentiment Indexes for the US, Japan and Spain rose above 50 and reached all-time highs. The U.K gauge topped 50 for the first time since October, while Switzerland climbed to a record.
Spain exceeded 50 for the first time, adding 17 percent to 51.41. Confidence in Switzerland climbed 3.6 per cent to 60.89 and U.K index surged 22 per cent to 55.61. The measures for Italy, France and Germany increased 14 per cent, 3.7 per cent and 2.4 per cent to 62.61, 57.77 and 53.33 respectively.
The Dow Jones Stoxx 600 Index of European equities may advance 9.2 per cent through the end of 2010 as the economy grows strategists at New York based Citigroup Inc wrote in a January 4 report. Signs that the global economy is rebounding from its first recession since World War II have helped push prices on the MSCI World to 34.7 times profit from the past year at its 1.656 companies. That’s the most expensive valuation since 2002, making equities vulnerable should earnings fail to materialise.
Alcoa Inc., the biggest US aluminium producer, began earnings season on January 11 by missing the average analyst profit forecast. The S&P 500 lost 0.9 per cent following the New York based company’s report.
“Alcoa’s bottom-line number was not good and investors are selling because expectations were high”, said Mark Bronzo, a money manager in Irvington, New York, at security global investors, which oversees $21 billion. “The fear gets heightened”.
The MSCI World fell 0.4 per cent on Wednesday morning in New York on a decline in oil and concern the Federal Reserve is preparing markets for higher interest rates.
“Payment of tuition fees for undergraduate/postgraduate studies shall be subject to a maximum limit of $25,000.00 per semester,” the Manual states.
The expansion of international card limits also reflects growing confidence among lenders that foreign exchange liquidity has improved enough to support retail dollar transactions.
Speaking recently at the BusinessDay 14th Annual CEO Forum in Lagos, CBN Olayemi Cardoso, governor of the CBN said buying and selling activities now increasingly determine outcomes in the foreign exchange market, unlike in the past when market participants relied heavily on routine Central Bank interventions.
According to Cardoso, Nigeria’s net foreign exchange reserves have risen from just over $3 billion at the start of the reform programme to more than $40 billion, while gross reserves have climbed to about $52 billion, providing stronger confidence for investors and enabling the Central Bank to reserve interventions for periods of market stress rather than day-to-day liquidity management.
The restoration and expansion of international naira card spending limits are increasingly being seen as one of the clearest signs that the benefits of the CBN’s foreign exchange reforms are beginning to reach households, students and businesses making legitimate cross-border payments.
The Secretary-General and Chief Executive Officer, WEC, Dr Angela Wilkinson, disclosed this in a statement, last Thursday.
“Nigeria’s participation comes at a pivotal time as the country seeks to expand energy access, strengthen energy security, accelerate gas development and mobilise the capital required for industrialisation and sustainable economic growth.
“WEC Nigeria will convene leaders from across the energy ecosystem, apply the WEC’s globally recognised Energy Trilemma framework to Nigeria’s unique context, and promote evidence-based dialogue, practical collaboration and informed policymaking.
“It will also ensure that Nigerian and broader African perspectives contribute meaningfully to global energy conversations,” she said.
Wilkinson expressed confidence that Nigeria would play a significant leadership role at the World Energy Congress scheduled for Riyadh in April 2027 and beyond.
The statement also quoted the Chairman of WEC Nigeria, Isa, as describing the country’s participation as an opportunity to deepen national and African leadership within the global energy community through practical solutions tailored to regional development priorities.
He said the platform would promote collaboration across sectors and attract sustainable investments into Nigeria’s energy sector.
The Chief Executive Officer of WEC Nigeria, Wunti, was quoted in the statement as saying that the council would connect leadership, evidence and investment to build a secure, affordable and sustainable energy system.
“This system will be capable of driving economic growth and shared prosperity.”
According to him, the platform will also connect Nigerian institutions and businesses with international knowledge, technology, partnerships and investment opportunities through the World Energy Council’s global network.
Recall that WEC, founded in 1923, is the world’s oldest independent and impartial community of energy leaders and practitioners, advancing informed, collaborative and practical action across the global energy system.