An investment management firm has called on investors to distinguish between statistics and company performance, as economic data continues to affect confidence.
Alister Hibbert, a fund manager at BlackRock, referring to recent concerns about state finance in European countries, said: “Despite recent European corporate profits being the best in years, investors have been concerned by the problems of peripheral Europe and rhetoric around the double-dip.”
Fund allocations to European equities are currently low at 13 per cent, below the decade average, according to BlackRock, representing concern about some European economies.
Hibbert said Europe now offered some of the best businesses at low valuations, ‘benefiting from exposure to the most attractive trends within emerging markets.’
“In Europe investors can pick from high quality, leading global businesses, many of which are focused on the high demand areas of luxury goods, healthcare and specialist industrials. Yet despite this, European equities remain unloved,” Hibbert said.
Hibbert also said the weakening Euro was making exporters in the Euro area more competitive.
Economic estimates, published on 8 and 9 September, put gross domestic product (GDP) growth on a downward trend.
The latest monthly estimate from the National Institute for Economic and Social Research found that GDP growth had slowed over the three months ending in August, now at 0.7 per cent.
The NIESR said the rate of growth was 'a robust rate for UK', but warned that the rate of growth would continue to decelerate over the coming months.
The NIESR said it considered the recession to be over, but what it terms ‘depression’ is likely to continue, where ‘output is depressed below its previous peak.’
“Thus, unless output turns down again, the recession is over, while the period of depression is likely to continue for some time. We do not expect output to pass its peak in early 2008 until 2012,” a statement said.
The Organisation for Economic Co-operation and Development estimated that combined growth, compared to the previous quarter, for Germany, France and Italy would be 0.4 per cent for the third quarter of 2010.
The OECD said there was a loss of momentum in the recovery of the world economy but said overall financial conditions in the OECD seven developed economies had stabilised.
The latest estimates of growth in the economy came as the Office for National Statistics published its seasonally adjusted figures for imports and exports to the UK.
The goods and services trade deficit, where imports are greater than exports, increased by £1billion between June and July. The figures are seasonally adjusted to take into account normal variations associated with the time of year.
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