This website uses cookies to improve user experience. By using our website you consent to all cookies in accordance with our Cookie Policy. Read more
Concerns over Egypt fail to suppress rise in UK market Go compare with our comparison table

Concerns over Egypt fail to suppress rise in UK market

02 February 2011 / by Paul Dicken

A flurry of data and announcements helped boost the London stock market on 1 February, despite the political crisis in Egypt affecting global investor sentiment.

Media reports on 31 January and 1 February suggest Egypt’s economy has ground to a near halt with some disruption to trade routes. A rising oil price was attributed to concerns that the protests seen in Tunisia and Egypt could spread to oil producers in the region, affecting supply.

The outlook for Egypt remains uncertain, with the BBC reporting ‘huge rallies’ in Cairo and other cities on 1 February and calls for President Hosni Mubarak to leave office by Friday.

While there was some negative impact in the UK markets, manufacturing data published on 1 February by Markit and the Chartered Institute for Purchasing and Supply showed the UK manufacturing sector expanded at its fastest rate since the PMI (purchasing managers’ index) was carried out, 19 years ago.
Markit said: “Growth of both new orders and employment picked up sharply to the highest rates in the 19-year survey history, allowing manufacturers to ramp up production to the greatest extent since 1994.”

However, the index did identify significant inflationary pressures for firms with steep rises in raw materials and increasing costs in areas such as chemicals, cotton, energy, food products, metals and timber.

The PMI data, along with company announcements, boosted FTSE indices on the London Stock Exchange, as trading came to a close on 1 February, the FTSE 100, FTSE 250 and FTSE 300 were all up in the day.

Amongst the announcements to the stock exchange on 1 February was the statement from confirming that it was resuming quarterly dividend payments to investors. The firm made a loss in 2010, but said 2011 would a year of ‘recovery and consolidation’ as it implemented changes identified to reduce operational risk and meet commitments from the oil spill in the Gulf of Mexico.

The long view for the UK

Publishing its latest forecast for the UK economy, the National Institute for Economic and Social Research said it expected the economy will grow by 1.5 per cent in 2011 and 1.8 per cent in 2012.

The NIESR said: “The economy will expand by 1.5 per cent, barely higher than the 1.4 per cent expansion in 2010. Some of the output lost to the exceptionally poor weather in late 2010, when GDP fell by 0.5 per cent, will be regained in early 2011, but the average rate of growth across the two quarters will be just 0.1 per cent. With the recovery so subdued, this year’s surge in inflation will peter out and CPI inflation will fall to 1.8 per cent in 2012.”

The NIESR also predicts that growth will be largely supported by net trade, expecting UK exports to increase by a greater amount than imports, reflecting a ‘belated response by exporters to a more competitive pound and the opportunities of faster-growing foreign markets.’

© Fair Investment Company Ltd

No news, feature article or comment should be seen as a personal recommendation to invest.The value of investments and income from them can fall as well as rise and you may not get back the full amount invested. Different types of investment carry different levels of risk and may not be suitable for all investors.

Prior to making any decision to invest, you should ensure that you are familiar with the risks associated with a particular investment.If you are in any doubt as to the suitability of a particular investment, both in respect of its objectives and its risk profile, you should seek independent financial advice.

 Product NameISA OptionIncome YieldMore Info
Henderson Strategic Bondyes5.7%More Info >
Income Paid Quarterly. Investing in higher yielding assets which will include most types of fixed interest securities, this fund aims to deliver a quarterly income to investors. See latest fund factsheet for details.
Newton Asian Incomeyes5.43%More Info >
Income Paid Quarterly.The objective of the Sub-Fund is to achieve income together with long-term capital growth predominantly through investments in securities in Asia Pacific ex Japan (including Australia & New Zealand) region. The Sub-Fund may also invest in collective investment schemes. See latest fund factsheet for details.
Newton Higher Incomeyes5.4%More Info >
Income Paid Quarterly. The objective of the Fund is to achieve increasing distributions on a calendar year basis with long term capital growth. The Fund may also invest in collective investment schemes. See latest fund factsheet for details.
Invesco Perpetual Distributionyes4.7%More Info >
Income Paid Monthly. Invesco Perpetual Distribution offers a balance between both income and capital growth through investment in UK based equities and fixed interest securities. See latest fund factsheet for details.
Invesco Perpetual Monthly Income Plusyes4.46%More Info >
Income Paid Monthly. Popular income fund that aims to achieve a high level of income whilst seeking to maximise total return through investing in high yielding corporate and Government bonds, together with UK equities. See latest fund factsheet for details.
Woodford Equity Income Fundyes3.50%More Info >
Our selected partner for investing in Neil Woodford's Equity Income fund is Barclays Stockbrokers, via their INVESTMENT ISA for new ISAs and ISA transfers, or their MARKETMASTER® ACCOUNT for non-ISA investments. Income Paid Quarterly.The fund’s investment objective is to provide investors with long-term appreciation through investing in stocks primarily listed on the UK stock exchanges. Up to 20% may be invested in international companies. The income objective is 10% higher than the FTSE All Share Index yield with an anticipated annual yield of 4.0%.
Newton Global Higher Income yes4.7%More Info >
Income Paid Quarterly. The objective of the Sub-Fund is to achieve increasing annual distributions together with long-term capital growth from investing predominantly in global securities. The Sub-Fund may also invest in collective investment schemes. See latest fund factsheet for details.
Jupiter Merlin Income Portfolioyes3.10%More Info >
Income Paid Quarterly. To achieve a high and rising income with some potential for capital growth by investing predominantly in unit trusts, OEICs, Exchange Traded Funds and other collective investment schemes across several management groups. The underlying funds invest in equities, fixed interest stocks, commodities and property, principally in the UK. See latest fund factsheet for details.
M&G Global Dividendyes3.27%More Info >
Income Paid Quarterly. The Fund aims to deliver a dividend yield above the market average, by investing mainly in a range of global equities. The Fund aims to grow distributions over the long-term whilst also maximising total return (the combination of income and growth of capital). See latest fund factsheet for details.
Kames Strategic Bond yes2.95%More Info >
The primary investment objective is to maximise total return (income plus capital ) by investing in global debt instruments,denominated in any currency, ranging from AAA Government Bonds through to high yield and emerging market corporate bonds. At least 50% of the fund will be invested in sterling and other currency denominated bonds hedged back to sterling. See latest fund factsheet for details.
M&G Optimal Incomeyes2.44%More Info >
Income Paid Twice Yearly.The fund aims to provide a total return to investors based on exposure to optimal income streams in investment markets. The fund invests across a broad range of fixed income assets according to where the fund manager identifies value. See latest fund factsheet for details.
*Current Income Yields are Gross, Variable and Not Guaranteed
**Historic Yield reflects distributions declared over the past 12 months as a percentage of the mid-market price of the fund.
*** This is the target yield the fund aims to achieve per year, it is not guaranteed and could change according to prevailing market conditions. The target yield is net of basic rate tax.
Information correct as at 08/02/2012.

The value of investments and any return from them can fall as well as rise and you may not get back the full amount invested. Please ensure that you read the Important Risk Information below.