Post by Fletchsmile on May 9, 2015 12:25:58 GMT 7
Feel free to share your views: Humourous or serious, you'll all be dead one day anyway 
Some good comments here on the financial impacts of the UK GE 2015 from 3 respected fund managers
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General Election 2015 - fund manager reaction and comment
8 May 2015 | A A A .
Following the surprise election result, we’ve asked a number of Britain’s best known fund managers for their reaction.
Neil Woodford, manager of CF Woodford Equity Income
For all the talk of hung parliaments, horse trading and coalitions, the result of this year’s General Election will come as a surprise to many, including us. The polls have consistently depicted a close result and, for a variety of reasons it has been very difficult to predict the outcome. Very few commentators - probably none - had expected such a strong performance from the Conservatives on election night.
Although the last few seats are still to be confirmed, the result of the election looks much better than expected - that isn’t a politically inspired statement but one that is based on the fact that such a decisive result removes the risk of the prolonged period of political uncertainty that we had expected to prevail. That is reflected in the surge in the pound that greeted the BBC exit poll which provided the first indication of such a strong Conservative showing and the positive opening for UK equity markets this morning.
Nevertheless, it certainly doesn’t remove all of the political uncertainty. The performance of the Scottish Nationalist Party gives them a significant voice in parliament but no power. Question marks remain, therefore, about the viability of our constitution and the Union. Meanwhile, the result will herald a referendum on Britain’s membership of the European Union in 2017.
And indeed, as we have said previously, the UK economic outlook looks somewhat subdued over the next five years, regardless of the result. A less conclusive result could clearly have been worse for the economy because of the associated political uncertainty, but our assessment of the UK economy suggests we could expect modest growth at best over the next few years.
Adrian Frost, manager of Artemis Income
So as we thought, the electorate have endorsed the known rather than the promise. The market feared drawn-out coalition and compromise, but it now seems that policies can be crafted and effected. The reaction of markets is understandable and contains a very audible sigh of relief from specific sectors which were seen to be the focus of Labour’s agenda. However, we note that stronger sterling is a minor negative which could persist - and so not all of today’s ‘relief rally’ is logical. The market sees the result as positive for UK business, yet we believe that politicians of whatever creed will be more inclined to intervene in business where they see fit. So this is most definitely not a return to the ‘free market economy’ of yesteryear.
Investors had been reducing their UK exposure ahead of the election. Now they see a stable political environment and an economy that will hopefully continue to recover. So flows should reverse and support the market. So far, so good - but the European referendum will loom larger as the year progresses. This presents another uncertainly for the market to overcome.
Richard Buxton, manager of Old Mutual UK Alpha
First, it is clearly positive that we do not have to undergo days of uncertainty whilst a coalition Government is negotiated. A clear mandate to govern for the next five years is constructive, whilst the narrowness of the majority guards against extreme policies.
The immediate reactions are obvious: slightly firmer Sterling and an equity mark-up, led by potential losers from a Labour Government - utilities, bookmakers, banks and house builders. To the extent that stronger Sterling represents a policy tightening and, more importantly, that the Government will remain determined to try to rein in the Budget deficit means that the Bank of England will be in no rush to raise interest rates.
If there is some modest evidence that pre-Election uncertainty held back activity in the UK through the first months of the year, then we would expect some rebound in the economy through the remainder of the year.
The scale of the Scottish National Party’s victory in Scotland, though, together with the scale of UKIP’s share of the national vote (at over 12%), confirms the extent to which we are an increasingly divided nation. The Scottish issue - and, inextricably linked, the English issue - is not going away as many hoped after the Scottish referendum, but will be a feature of the political landscape throughout the five years of the Parliament. This may not be entirely positive for the Scottish economy.
As for the prospect of a referendum on the UK’s membership of Europe in 2017, this is not something to be feared. The new Government has two years to negotiate with its EU partners some changes to the nature of Britain’s relationship with Europe. Germany has no wish to lose the UK from the EU, both as a financial contributor and as a free market counterweight to the statist model of France.
If the Government is able to negotiate some meaningful changes to the UK’s membership of Europe, then the inherently conservative population - as so clearly evidenced by this Election result - will overwhelmingly vote to stick with the devil they know inside the EU rather than leap into the unknown of a world outside it.
So a positive outcome for the UK economy, where the reality is that we have further work to do to reduce our indebtedness and overspending. A growing economy should enable that progress to be made. But a country most certainly not ‘at ease with itself’, in Sir John Major’s words. There is much healing work to be done.
As for the markets, within days if not hours this result will be old news. Back to the real issues of watching the Fed attempting the near-impossible task of gently nudging long-term yields and short-term rates higher, without damaging economic activity or precipitating a bond market collapse.
Let’s keep the UK Government in perspective.
www.hl.co.uk/news/articles/general-election-2015-fund-manager-reaction-and-comment
Some good comments here on the financial impacts of the UK GE 2015 from 3 respected fund managers
-----------------------------------------------------------------------
General Election 2015 - fund manager reaction and comment
8 May 2015 | A A A .
Following the surprise election result, we’ve asked a number of Britain’s best known fund managers for their reaction.
Neil Woodford, manager of CF Woodford Equity Income
For all the talk of hung parliaments, horse trading and coalitions, the result of this year’s General Election will come as a surprise to many, including us. The polls have consistently depicted a close result and, for a variety of reasons it has been very difficult to predict the outcome. Very few commentators - probably none - had expected such a strong performance from the Conservatives on election night.
Although the last few seats are still to be confirmed, the result of the election looks much better than expected - that isn’t a politically inspired statement but one that is based on the fact that such a decisive result removes the risk of the prolonged period of political uncertainty that we had expected to prevail. That is reflected in the surge in the pound that greeted the BBC exit poll which provided the first indication of such a strong Conservative showing and the positive opening for UK equity markets this morning.
Nevertheless, it certainly doesn’t remove all of the political uncertainty. The performance of the Scottish Nationalist Party gives them a significant voice in parliament but no power. Question marks remain, therefore, about the viability of our constitution and the Union. Meanwhile, the result will herald a referendum on Britain’s membership of the European Union in 2017.
And indeed, as we have said previously, the UK economic outlook looks somewhat subdued over the next five years, regardless of the result. A less conclusive result could clearly have been worse for the economy because of the associated political uncertainty, but our assessment of the UK economy suggests we could expect modest growth at best over the next few years.
Adrian Frost, manager of Artemis Income
So as we thought, the electorate have endorsed the known rather than the promise. The market feared drawn-out coalition and compromise, but it now seems that policies can be crafted and effected. The reaction of markets is understandable and contains a very audible sigh of relief from specific sectors which were seen to be the focus of Labour’s agenda. However, we note that stronger sterling is a minor negative which could persist - and so not all of today’s ‘relief rally’ is logical. The market sees the result as positive for UK business, yet we believe that politicians of whatever creed will be more inclined to intervene in business where they see fit. So this is most definitely not a return to the ‘free market economy’ of yesteryear.
Investors had been reducing their UK exposure ahead of the election. Now they see a stable political environment and an economy that will hopefully continue to recover. So flows should reverse and support the market. So far, so good - but the European referendum will loom larger as the year progresses. This presents another uncertainly for the market to overcome.
Richard Buxton, manager of Old Mutual UK Alpha
First, it is clearly positive that we do not have to undergo days of uncertainty whilst a coalition Government is negotiated. A clear mandate to govern for the next five years is constructive, whilst the narrowness of the majority guards against extreme policies.
The immediate reactions are obvious: slightly firmer Sterling and an equity mark-up, led by potential losers from a Labour Government - utilities, bookmakers, banks and house builders. To the extent that stronger Sterling represents a policy tightening and, more importantly, that the Government will remain determined to try to rein in the Budget deficit means that the Bank of England will be in no rush to raise interest rates.
If there is some modest evidence that pre-Election uncertainty held back activity in the UK through the first months of the year, then we would expect some rebound in the economy through the remainder of the year.
The scale of the Scottish National Party’s victory in Scotland, though, together with the scale of UKIP’s share of the national vote (at over 12%), confirms the extent to which we are an increasingly divided nation. The Scottish issue - and, inextricably linked, the English issue - is not going away as many hoped after the Scottish referendum, but will be a feature of the political landscape throughout the five years of the Parliament. This may not be entirely positive for the Scottish economy.
As for the prospect of a referendum on the UK’s membership of Europe in 2017, this is not something to be feared. The new Government has two years to negotiate with its EU partners some changes to the nature of Britain’s relationship with Europe. Germany has no wish to lose the UK from the EU, both as a financial contributor and as a free market counterweight to the statist model of France.
If the Government is able to negotiate some meaningful changes to the UK’s membership of Europe, then the inherently conservative population - as so clearly evidenced by this Election result - will overwhelmingly vote to stick with the devil they know inside the EU rather than leap into the unknown of a world outside it.
So a positive outcome for the UK economy, where the reality is that we have further work to do to reduce our indebtedness and overspending. A growing economy should enable that progress to be made. But a country most certainly not ‘at ease with itself’, in Sir John Major’s words. There is much healing work to be done.
As for the markets, within days if not hours this result will be old news. Back to the real issues of watching the Fed attempting the near-impossible task of gently nudging long-term yields and short-term rates higher, without damaging economic activity or precipitating a bond market collapse.
Let’s keep the UK Government in perspective.
www.hl.co.uk/news/articles/general-election-2015-fund-manager-reaction-and-comment
