By David Walker The markets may be heading south rapidly, but central banks' willingness to...
By David Walker
The markets may be heading south rapidly, but central banks' willingness to cut interest rates and pump money into global economies in the first part of 2001 should bring rebounds and growth this year, according to Invesco chief investment officer Bob Yerbury.
Speaking at the conference, Yerbury said the US Federal Reserve was re-injecting money into the economy, following earlier injections in late 2000 amid Y2K fears, and in 1997/98 amid fears about Asia's and Russia's economic instability.
"There is real concern the US is close to zero growth," said Yerbury. But he counselled investors to seek experienced stock pickers rather than following distinct trends as the
market slowly recovers during 2001.
He said the UK was one of the world's "more stable markets", explaining that "from an economic perspective conditions look stable".
"Around the world, if you take out the TMT sectors, the economy is now discounting negative rate of real growth into prices, which says markets have overdiscounted the bad news," Yerbury said. Last year, he added, global equities grew by just 1% after inflation was accounted for, "the first time we have seen a fall in quite a number of years".
Yerbury said there may still be profits downgrades in Europe to come, but the euro would no longer work against European investors as its falls have done in the past year.
He was more upbeat about Japan's prospects than other commentators have been, saying industrial production was "pretty perky" and the valuations on Japan's market were low.