La industria de la gestión británica ha estado muy pendiente del resultado de las elecciones gubernamentales de esta semana y varios gestores han emitido ya sus opiniones. Funds People ha recopilado algunos de los comentarios:
Simon Haines, manager of the Threadneedle Mid UK 250 Fund
We are entering a period of uncertainty and negotiation that will ultimately decide the make-up of the next government. The most likely outcomes appear to be a Labour/Lib Dem coalition, a Conservative/Lib Dem coalition or the Conservatives attempting to go it alone, possibly with support from minority parties. In the first two of these scenarios, it seems that the Lib Dems will wield considerably less influence than most people would have predicted a week ago. However, despite their disappointing showing in terms of seats won, Nick Clegg may still be in a position to force far-reaching reforms.
But the main issue remains that if a government is not formed quickly and fiscal consolidation is not made a priority, then things could become far more difficult and will leave the market on tenterhooks.
We have been considering the likelihood of a hung parliament for some months and we are confident of two things: firstly, that there will be a workable government, and secondly that one of its most urgent tasks will be to address the fiscal deficit in order to retain the UK’s AAA credit rating. This will mean spending cuts and tax rises, with uncomfortable consequences for UK consumers.
But despite the short-term uncertainties in the UK, we are investing in a global market and, globally, there are bigger factors at play than the outcome of the UK election. On the negative side, concerns about debt levels in countries with far more pressing problems than the UK, such as Greece, will continue to weigh on confidence. But on the positive side, the global economy is in recovery mode, growth in Asia and emerging markets is particularly strong and company fundamentals are in good shape. It is worth remembering that 70% of UK corporate earnings come from outside the UK, and companies in the US, Europe and Japan also have considerable exposure to fast-growing emerging markets.
Recent earnings reports across the globe have illustrated the power of operational gearing into an economic recovery, and we expect to see further impressive earnings numbers over the coming months. With equity valuations looking reasonable and profits recovering, share prices should be underpinned. And, despite the UK’s fiscal position, the determination of the new government to address this issue should prevent a downgrade of UK debt and place a cap on gilt yields.
Meanwhile, we continue to focus on fundamentals and to use any short-term market volatility to build positions in strong long-term franchises.
Richard Buxton, Head of UK Equities Schroders
The morning after…
First and foremost it is critical to distinguish between the European fringe sovereign debt crisis, which is now dominating financial markets, and the outcome of – and reaction to – the UK’s election result. The UK equity market will continue to be driven more by the former than the latter, although clearly the uncertainty over who forms what kind of government (and how long it lasts) is now an additional element in the mix for UK investors.
Having started the year at around 5,500, my expectations for the FTSE 100 were that it would range widely this year, touching both 5,000 and 6,000 during 2010. Thus far, this has both been borne out and remains my view.
On the one hand, when markets focus on the extent of the ‘V-shaped’ recovery in global trade, US economic activity and the very strong rebound in corporate profits, equities are likely to rise. On the other, when concerns shift to public sector deficits and consequent sovereign credit risk, markets will react negatively. Sentiment being as fragile as it is after the events of the last two years, the pattern remains one of grinding slowly upwards and falling back rapidly.
Pushing for a debt solution
Detailed views on the likely outcomes of the European fringe sovereign debt crisis are probably best left to my fixed income colleagues, but for what it is worth it seems to me that markets always hate central banks being behind the curve – as happened throughout the early stages of the unfolding credit crunch. Markets will continue to push European governments and the ECB for a solution to the debt situation, not just in Greece, but in the wider current account and budget deficit countries.
This means some form of debt restructuring (for which read a possible loss taken on some debts – a major issue for European banks) or a restructuring of the euro. So much political will is invested in the euro that the latter route looks unlikely until all other measures have been tried.
Hence the probability that the ECB will be dragged kicking and screaming towards buying government bonds from the weaker sovereign credits. The fact that this is not allowed under current legislation and might be challenged by Germany’s constitutional court merely indicates that this process may take some time, during which equities will continue to twitch on every policy pronouncement.
Markets disappointed by a lack of majority
Back in the UK, the hung Parliament electoral outcome was a disappointment for markets. Sterling, having rallied on hopes of a
Conservative overall majority, has unsurprisingly weakened again and gilt yields have moved modestly higher. As to what happens next, scenarios are plentiful, but any attempt by Labour to form a government with support from minority parties is unlikely to be long-lived.
A Conservative-led government with minority support is more probable, but may still prove relatively short-lived unless a deal can be thrashed out which exchanges a formal agreement on support for deficit-reduction measures for an opportunity for a referendum on electoral reform.
Where next for fiscal tightening?
Early and aggressive fiscal tightening looks unlikely unless such a deal can be agreed, so sterling is likely to remain soft and gilt yields may drift upwards in the coming weeks. Crucially, though, sterling is already cheap, and provided the move up in gilt yields is modest, equities can weather this storm (given the strength of the corporate sector’s health and current valuations). But, if a workable agreement for government cannot be reached, the prospect of a second election this year becomes quite real.
How patient would the markets and the ratings agencies be under this scenario? Might they take the size of the Conservative gains as indicative of a popular mood for change to tackle the deficit and hope for an overall majority in a second election? Does last night ring down the curtain on popular support for ever bigger government and government spending? Or would time be called on the UK’s AAA rating if no early fiscal tightening is on the cards? These concerns will overshadow the UK market in the coming weeks, but, given the global nature of so many of our largest companies, it would be wrong to over-emphasise the scale of this headwind.
Buying into weakness
Chinese policy tightening is more relevant to UK-listed mining companies than the composition of Westminster – and the scale of recent falls here looks overdone. Dollar strength can only be positive for pharmaceuticals and many USoriented companies. On balance, therefore, we stick with our view that at the low end of my trading range one should be buying into weakness for favoured UK stocks irrespective of the political uncertainty. The twists and turns of both the UK’s electoral landscape and Europe’s sovereign debt crisis will provide many opportunities for the contrarian long-term investor in the next few months.