Barclays optimistic on big picture
Source: BI-ME , Author: Posted by BI-ME staff
Posted: Thu April 19, 2012 12:13 pm

UAE. Barclays has released the latest edition of Compass.

Key recommendations:

• Use current setbacks to add to positions in inexpensive developed equities and high yield credit
• Trim holdings of pricey government bonds

Kevin Gardiner, Head of Investment Strategy, EMEA, for wealth and investment management at Barclays, commented: “The strong run in stock markets in the first quarter of 2012 doesn’t mean that the risks facing the global economy and euro area banks have suddenly evaporated, but it does mean that some investors will have made a sizeable profit that they may be tempted to realise soon.

"Business surveys are consolidating, the price of oil is re-emerging as a near-term concern, and the calendar is ticking remorselessly towards May (as in, “Sell in …”). All of this suggests that we should not be too surprised at a setback at some stage – one may be at hand as we speak.

“As we see it, however, the big picture is unaltered, and likely more positive than feared in 2011. Economic growth globally is probably not falling below stall speed; the euro area banks are being cushioned by the ECB; and stock valuations remain on the low side. With this in mind, we are inclined, again, to advise against trying to fine-tune portfolios in anticipation of short-term volatility, because to do so might be to run the risk of missing a resumed rally.

“Against this backdrop, we continue to recommend that private investors own a diversified portfolio that currently includes slightly larger than usual allocations to developed stock markets and high-yield credit, and smaller than usual weightings in government bonds.”

For investors who are worried about higher oil prices and how they might hedge against it, Kevin adds: “It is impossible to know how the current tensions between Israel and Iran will ultimately be resolved, however, it is likely that oil prices will be well supported if the status quo persists and could potentially rise dramatically if tensions escalate. 

"For this reason, investors should consider an allocation to investments which would perform well and could help offset other investment losses if the price of oil rises abruptly.  These include the oil and gas sector and direct oil exposure.”

About Barclays

Barclays moves, lends, invests and protects money for customers and clients worldwide.  With over 300 years of history and expertise in banking, we operate in over 50 countries and employ over 140,000 people.
 
Our customers and clients benefit from access to the breadth of expertise across Barclays.  We’re one of the largest financial services providers in the world, engaged in retail banking, credit cards, corporate and investment banking, and wealth and investment management.
 
We are a leading global wealth and investment manager providing international and private banking, wealth planning, trust and fiduciary services, investment management, brokerage services and research to private and intermediary clients around the world.

 

MIDDLE EAST BUSINESS COMMENT & ANALYSIS

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INTERNATIONAL. Oil markets since 2011 have become less price sensitive to actual supply disruptions, especially to those geopolitical events that have taken place since the Arab Spring.
UAE. The Middle East's top brands have grown by an average of 38%, according to The Brand Finance Middle East 50; This brings the total value of the top 50 above US$50 billion for the first time; Emirates holds the top spot and remains far ahead of the rest.
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