The global economic recovery is gathering pace with most countries likely to see positive economic growth in the second half of 2009 and in 2010, says Skandia Investment Group (SIG).
The business believes the strength of the recovery remains uncertain, but evidence is mounting that it will be stronger than had been expected a few months ago.
SIG CEO James Millard said that Skandias Global Asset Allocation Committee believes that equity and credit markets have continued to rally on the back of the economic recovery and there have been further signs that the crisis in the banking sector is over.
We expect recent trends to continue and remain overweight equity and credit markets,” says Millard. Global equity markets rallied in August with the MSCI World Index up over 3%. For once the rally was not led by China, which slipped on fears that the economy may be slowing and monetary policy may be tightened in the months ahead. European equities rallied sharply as data suggested that France and Germany grew in 2009Q2, while forward looking data suggested a further pick-up later in the year. This economic recovery is likely to support corporate profits, which should increase sharply in 2010. Global equity markets remain cheap against cash and bonds and we expect an ongoing rally over the months ahead.
D.C.