We have published a note today looking at the investment implications that may arise should Scotland leave the UK. In a nutshell the financial risk lies predominantly with Scotland dependent largely on number of key unresolved factors; notably how the national debt and oil revenues are split. The nature of the final negotiations would largely determine the viability, or otherwise, of Scotland.
We remain positive on the prospects for capital appreciation for UK equities for a sixth consecutive year setting a FTSE 100 target of 8000. We believe that Anglo Saxon risk is back to pre crisis lows and while the UK recovery is unbalanced the extremity of monetary policy is likely to continue to agitate growth and may indeed lead to bubbles re-developing in certain asset classes, notably real estate. We believe US recovery is more balanced and sustainable relative to the UK. European recovery we believe will prove illusive in 2014.
Walbrook Economics today spoke at the Institute of Economic Affairs Pre- Autumn Statement Briefing. Out theme was that with GDP growth likely to reach 3% in 2014 tax receipts were on a strong upward projectory. While growth remained unbalanced tax receipts were up 8.2%, over the last 6 months with public spending constrained to a 2.3% rise. The OBR's deficit projections of £119bn, for the current fiscal year, were likely to under-shoot by £15bn with a greater reduction likely in 2014/15. Modest tax cuts should be expected in the current year with greater reductions expected in 2014/15.
Walbrook Economics is delighted to publish this fascinating analysis of the AIM market: Successes, Failures and Suggestions for Change. The note examines the history of AIM, an analysis of AIM as an investment class,why it has underperformed and what the prospects are. It outlines some points for discussion as to the future of AIM. The note is particularly pertinent as, at long last, AIM is showing some signs of life and valuations are clearly not excessive. Please do not hesitate to contact Scott or myself should you want to discuss this further
This note takes the long view. If one had bought the FTSE tobacco sector on 1st January 2000, 13 years ago, one would have made 51x more than investing in the FTSE IT Hardware sector. While it is perhaps unfair to judge the hardware sector's performance from the midst of the TMT bubble spotting long term trends can lead to spectacular returns. This note looks at sector performance over four time horizons. 1st January 2000, the end of TMT, which we take as January 2003, the market low, post the credit crunch (March 2009), and the 2013 leader board.