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Both the FTSE 100 and Dow were expected to make modest gains by the end of 2012, according to a survey of 100 senior representatives of investment firms. The Euro was expected to deteriorate further compared to sterling, while the US dollar would increase in value. However, the majority interviewed thought that President Obama’s government had not done enough to stimulate the economy in the US.
In respect of improving business and the economy in the UK, there were calls for tax cuts both for individuals and for businesses together with the elimination of stamp duty on share purchases. A number of respondents also demanded that the government did more to simplify rules for pensions, stopped changing pension rules and improved the level of understanding of investments, particularly those which were more tax efficient, e.g. ISAs.
Those interviewed were asked to predict the best FTSE companies for capital growth in 2012. Vodafone was the most popular choice in the FTSE 100, followed closely by Barclays and BT. Balfour Beatty and Centamin Egypt featured well from selections from the FTSE 250.
A wide selection of funds were also selected. These included iShares FTSE 100 and Liontrust UK for capital growth and the Artemis and MG Optimal for income.
Other predictions included:
Inflation To fall to 4.25%
Base Rates To remain at 0.5%
Unemployment Increasing to 2.75 million
Price of Unleaded Petrol GBP1.43 per litre by 31st December 2012
The survey was carried out by financial services management consultants, Goodacre UK and sponsored by TD Wealth Institutional.
Commenting on the responses, Stephen Pinner, Goodacre’s MD, said
“The survey responses suggest that markets will remain slightly ahead of where they are now. There was a high degree of confidence that levels of inflation would reduce throughout the year although further increases in unemployment were predicted. With base rates estimated to remain so low, most of those interviewed thought that the best investment returns would come from equities and funds”.
The survey was based on personal interviews of 100 selected representatives from UK based investment companies. The survey was conducted from November through to December 2011.