TheBusinessDesk.tv: Experts offer investment hope
THE uncertain market is creating opportunities for wise investors, according to experts from Redmayne-Bentley.
An audience of leading business figures heard expert analysis on the economy and insight into investment opportunities from a panel of Redmayne-Bentley experts at an event in association with TheBusinessDesk.com yesterday.
Investment manager Morven Whyte said her advice on stocks to watch in 2012 was “nothing speculative, nothing small” and shares that are easy to buy and sell.
She picked out BP as a promising investment prospect despite a disappointing 2011 and ongoing legal fallout from the Deepwater Horizon accident.
Ms Whyte noted that the fundamentals underpinning the oil industry remained in BP’s favour but that its recent difficulties had left the share price trading at a 23% discount compared to its peers.
GSK was another choice despite acknowledging “they have been a miserable investment for anyone who has held them for any significant period of time.”
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Ms Whyte said the stock was becoming more attractive after the company announced the sale of non-core assets with the proceeds likely to find their way back to shareholders through dividends or a share buyback programme.
The company is also set to benefit from tax breaks from the Goverment aimed at supporting innovation, she said.
Her final pick was Intercontinental Hotels Group. “They have a good pipeline of new projects coming on stream focused on the Asian market where the Chinese in particular have growing income and years of restricted travel opportunities.”
Ms Whyte said the company’s considerable US interests could receive a boost from efforts by President Obama to encourage consumer spending ahead of the presidential election in the autumn.
However, she suggested that £10.50 was a more realistic price than the current cost of £12.30.
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SENIOR stockbroker David Scott warned potential investors they have to take a realistic view of the challenges facing the global economy in 2012. “Will Europe go into recession? I think the conclusion is Europe is possibly in recession now and may well come out later in the year. [VIDEO: 453] “The worry is the Bundesbank thinks the German economy will grow by 0.6% this year – that is not strong enough to lift the rest of Europe. Recession in Europe could drag the US back into recession.” In the UK, Mr Scott said the economy could narrowly avoid returning to recession as long as the wider European economy did not go “horribly wrong” and inflation is forecast to fall sharply. Mr Scott said considerable hope was being placed on the impact Chinese growth could have on the global economy. “Personally, I am not hugely bullish on China. It is important to remember last year the Chinese stock market was one of the worst performing in the world. Growth does not necessarily mean value.” Looking at the US, Mr Scott said the focus would be on the presidential race in the autumn. A survey of Redmayne-Bentley’s brokers suggested the FTSE 100 will finish the year at around 5800 with the highest prediction at 6172 and the lowest at 4841 illustrating the volatility in the market. |
Offering thoughts on fixed interest investments, investment manager David Battersby identified the GCP Infrastructure Fund which focuses on debt from Government spending on buildings such as schools and hospitals.
“These are very risky projects in the planning and building stages but once they are complete they can provide a very good return.”
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Mr Battersby underlined the fact that the Government is legally obliged to underwrite the costs of the projects and highlighted that the investment is RPI-linked.
The Natwest 9% preference share was also put forward with Mr Battersby stressing that its value had been cut to 30p by an adverse EU ruling only for a change in the interpretation to see it rebound to a high of 97p.
He also flagged up an opportunity offered by the introdution of the retail bond market in 2010.
“I have found it very very difficult indeed to find bonds that are attractive. People are afraid of risk so they are putting money into the lowest risk securities such as gilts,” he said.
Mr Battersby suggested investors should consider the GE Capital 6.75% Bond which, among its other features, could be traded in £1,000 increments.
All his suggestions could be wrapped into ISAs and pension funds, he said.
The event yesterday was hosted by David Parkin, managing director of TheBusinessDesk.com, and held at Aspire in Leeds.
