Angus Parker

Manager sees "bubble-like" qualities in UK real estate market.

Michael Ryval 12 October, 2007 | 1:00PM
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The current market volatility in Europe has its roots in the borrowing binge by consumers, says Angus Parker, manager of the $106.8-millionHSBC European. "The chickens have come home to roost after a period when a lot of consumers took advantage of cheap credit," says the head of European equities at London-based Halbis Capital Management (UK) Ltd., a unit of the HSBC Group.

"The economy might have gone into recession in 2001, but it didn't because a lot of liquidity was pumped into the system," says Parker, 37. "It has to re-balance at some point."

The question is, asks Parker, whether this crisis will affect the real economy. And since there is a higher risk of a slowdown than six months ago, Parker is cautious about consumer discretionary stocks, for example. He has also underweighted UK banks because of concerns about the "bubble-like" qualities of the local real estate market.

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Michael Ryval

Michael Ryval  Michael Ryval, a regular contributor to Morningstar, is a Toronto-based freelance writer who specializes in business and investing.

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