HBOS' new asset management arm Insight Investment says it is relatively upbeat about stock markets i...
HBOS' new asset management arm Insight Investment says it is relatively upbeat about stock markets in the UK, US, Europe and, with caveates, Japan, but is not so happy about bond valuations.
Demand for bond products is high and many funds have been increasing their holdings, but prices for bonds in the UK could be undermined by changes to government spending.
Insight warns that weaker tax revenues coupled with rising government spending will lead to an increase in the issuance of government debt next year.
Bond prices could remain stable, but that depends on interest rates remaining low.
In terms of European investments, Insight says that the main problem is continued weak macroeconomic signals, despite the absence in the latest company reports season of any major shockers in terms of hugely reduced company earnings.
The US show signs of continued improvement, as does Japan, but only if the government there takes serious steps to tackle bad debts in the banking sector.
Insight does not tackle the question of emerging markets, but does address the Asia-Pacific market: it says that investors need to price in the political uncertainty that has been ratcheted up in the region following the bombings in Bali.
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