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European privatisations: nothing to fear

Article Abstract:

European privatization policy is unlikely to have an adverse effect on share prices, James Capel argues. France and Italy appear to be scaling down their plans and Germany does not plan privatizations for 1995. Deutsche Telekom will be privatized in May 1996. Privatization involves risks of an unsuccessful issue and of having an adverse impact on the market as a whole. Other factors such as interest rates, corporate results and risk premiums needed in the stock market are seen as more important by James Capel.

Privatization, Privatization (Business)

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Europe: policy bets

Article Abstract:

European equities are likely to be affected by economic policy in 1996, according to UBS' Mark Howdle. Planned European monetary union has brought constraints and an abandonment of this policy in favor of growth would help shares, especially French and German shares. Equities would also perform better than bonds if growth were pursued. Cyclical shares are seen as likely to perform well. Some move to cyclicals is merited by the chance of a delay in planned monetary union.

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Europe: insulated

Article Abstract:

European equity markets should be protected against a drop in US share prices, argues Morgan Stanley. US bond yields look set to rise more rapidly than European yields with an increase in economic growth in the US. The US dollar is also likely to rise in relation to the German mark. This should help European companies geared toward exports and their share prices. Manufacturing and consumer cyclical stocks are seen as likely to be the best performers in Europe.

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