• Text size      
  • Send this article to a friend
  • Print this article

Equity markets face hard times, warns Aberdeen

ABERDEEN Asset Management has warned equity markets are going to be no easier in 2013, as concerns over public and private finances in the United States weigh on confidence.

Mike Turner, head of global strategy at the Scottish investment house, said: "Will markets beat this year's returns? My suspicion is it is going to be very hard to do so."

He warned that the US consumer, who accounts for 16% of the world economy, remained highly indebted.

The outcome of negotiations in the US to avoid the fiscal cliff, a series of automatic tax hikes and spending cuts that kick in if legislators are unable to reach a debt reduction deal, could further weigh on growth.

"A sub-par global growth outcome still seems most likely in 2013," Mr Turner said.

Many other fund managers remain cautious.

Katherine Garrett-Cox, chief executive of Dundee-based Alliance Trust, said: "The same old issues prevail, whether it is the ongoing eurozone crisis, the austerity plans for the UK, the looming fiscal cliff in the US or the potential of lower GDP [gross domestic product] growth in China."

However, she added that some companies were undervalued, giving investors opportunities.

Nick Train, whose Finsbury Growth and Income Trust holds shares in Irn-Bru maker AG Barr and Celtic Football Club, is more positive.

He said: "We know that a lot of investors – both private individuals and the big institutions – are disenchanted with equities. We see them throwing in the towel and embracing bonds or 'alternatives'."

Mr Turner said he expected emerging markets to do well after several years of relative under -performance.

Jeremy Tigue, fund manager at London and Edinburgh-based F&C Asset Management, which oversees the £2.4 billion Foreign & Colonial Trust, added: "The main hope for market and economic growth next year continues to be emerging markets."

Contextual targeting label: 
Finance

Commenting & Moderation

We moderate all comments on HeraldScotland on either a pre-moderated or post-moderated basis.
If you're a relatively new user then your comments will be reviewed before publication and if we know you well and trust you then your comments will be subject to moderation only if other users or the moderators believe you've broken the rules

Moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours. Please be patient if your posts are not approved instantly.

130242