The tide is turning

CI Harbour's Stephen Jenkins expects global market to pay up for earnings growth

Sonita Horvitch 3 October, 2012 | 6:00PM

 Stephen Jenkins, senior vice-president, investments, and global-equity specialist at Harbour Advisors, says that the concerns about the economic health of the United States and Europe are slowly abating, and this is buoying the mood in the equity market.

"There has been a lot of money sitting on the sidelines waiting for an entry point into stocks," he says. The ongoing commitment by the U.S. Federal Reserve Board and the European Central Bank to an accommodative monetary policy is allaying fears about the macroeconomic picture, he says. These policies are also helping to keep interest rates at historic low levels, he adds.

On the fundamentals, Jenkins points out that corporate profits are "growing at a decent pace and the valuations are playing catch-up to this." Despite this "re-evaluation of stocks," he considers that there is still scope for valuations to go higher. "The next few years will bring greater clarity and confidence about the big economic picture, and the market will start to pay up more fully for corporate earnings growth."

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Sonita Horvitch

Sonita Horvitch  

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