Oddly enough, 2012 was a good year for stock markets, says Catella

Sweden’s Catella has taken a positive view of stock markets following the surprisingly good year for equity investments in 2012.

The US housing market is improving and the Federal Reserve is printing money, but unemployment remains high posing a risk to recovery in consumption-led growth. That immediate focus of investors will be on the steps taken to deal with the country’s budget deficit and debt, Catella said.

Europe benefitted over the past year from the long term refinancing operation pushed by the European Central Bank, to inject liquidity into the continent’s financial system. However, despite central banks printing more money, this still does not seem to be getting out of the banks into the economies.

Germany’s continued strong exports helped the Nordic region too. But with less need for austerity the focus has to be on creating future growth. Catella notes that “European shares are relatively cheap and that more people will take an interest in them.”

The region’s banking problems are likely to persist in 2013, with focus directed at Spanish banks.

China is the third major area covered by Catella, which notes that the country’s growth rate slowed last year. This year it expects “slightly improved economic growth, which will help to create the conditions for a better stock market climate in 2013.”


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