Global Recovery Could Take Years

Global Recovery Could Take Years

Simon Murphy, manager of the Old Mutual UK Select Equity Fund says, scars from the credit crunch will take time to mend.  Real economy implications from the credit crunch and doubts about profit growth expectations are unlikely to dissipate quickly, tempering our enthusiasm for UK equities in the near term.

He also commented that prospects of companies are improving as a result of internal changes, such as successful corporate restructurings and rationalisation, or as a consequence of external changes, such as commodity companies supported by strong growth in demand from emerging economies.  

Our view

We suggest that we have been in a state of ‘flux’ in the global equity markets for nearly 8 years now, so we do not see any change.  Equity prices i.e.  the inbuilt value of a company is going to take a few more years yet, but spreading it as a gloom message does not prompt confidence.  We suggest two more years of volatility and then a little, sensible stability.

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