Member Article

Markets gain as Sage buy emerging market growth

Markets were muted in early trading as they awaited the US Federal Reserve’s latest interest rate decision. Whilst JGBs (Japanese Government Bonds) remained steady and gold prices held below $1,620/oz, equity benchmark futures dropped slightly on Wednesday ahead of the Fed statement. Elsewhere, the Dollar fell for a second day against the euro on speculation of further monetary stimulus boosts.

Other morning news was dominated by the G20 summit in Mexico. World leaders expressed concerns regarding the impact of the eurozone crisis upon the global economy and pledged to take “all necessary measures” to defend the Euro. Italy’s President proposed investing the $440bn eurozone rescue fund in peripheral bonds on the open market. The markets reacted as Spanish & Italian Bond yields fell sharply having already begun to decrease in anticipation of the summit.

The Bank of England’s MPC (Monetary Policy Committee) voted against expansion of QE (Quantitative Easing). BoE Governor Mervyn King was outvoted by a 4-5 split, however “given that King’s in the minority, it would increase the chance that some of the other five will follow,” said Vicky Redwood.

On the bright side, the Office for National Statistics (ONS) said the unemployment rate fell to 8.2%. However the number claiming jobseekers’ allowance rose by 8,100 last month despite analysts forecasting a fall of 3,000.

After its fifth year of recession, Greece has finally agreed upon the formation of new coalition government according to Evangelos Venizelos the head of Pasok. Antonis Samaras, chief of the conservative New Democracy party, has been sworn in as the prime minister.

The world’s largest consumer-goods company Proctor and Gamble, said it has suffered from sluggish EU and US growth. Shares fell after cutting forecasts for the second time this year. Just as Kesa, former owner of UK electrical goods chain Comet, profits almost halved and the revenue for the Continuing Group declined by 2.0%.

Great news for buger lovers though, as Burger King returned on the NYSE today under Ticker symbol “BKW” with shares gaining 98 cents, or 6.8 percent, to $15.48 in morning trading. Back in the UK the FTSE 100 gained 36 points to close at 5622 and was led by Sage, whose shares gained 5.5% after it announced the takeover of rapidly growing Brazilian rival Folhamalic.

This was posted in Bdaily's Members' News section by James .