Wednesday, January 20, 2016

Stock markets will 'settle down' says top investment banker

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Global stock markets will calm down in the next few weeks, paving the way for a string of market flotations, according to analysts at Berenberg Bank.

David Mortlock, Berenberg's UK chief, also said low oil prices are good for growth and should not cause investors to panic.

Berenberg's UK boss David Mortlock is optimistic about the direction of share prices

But Mr Mortlock said there was no need to panic.

“I think markets will settle down at some point – people underestimate the benefits of greatly lower oil prices for the economy and the consumer,” he said.

“I can understand why markets have been choppy in recent weeks, but I don’t think there is anything fundamentally wrong out there if you look at the macroeconomic landscape across most of the world. I think equity markets will find their feet.”

As a result, he believes there are "interesting" investment opportunities opening up on the stock market.

He said he hopes markets will settle down because Berenberg has “a full pipeline" of deals, which will be easier to sell in calmer waters.

Clydesdale and Yorkshire Bank is set to list in London at the start of next month. The deal will be the first big initial public offering of the year and its parent company, the National Australia Group, hopes the sale will achieve a valuation of £1.5bn to £2bn.

Mr Mortlock's comments came as Berenberg reported a 160pc jump in annual profits to €104m (£80.2m) in 2015.

Income from investment banking increased by nearly 50pc, as Berenberg advised on 27 equity capital market fundraising deals, raising a total €8.5bn.

The 425-year old privately-owned bank has 250 staff in its London office, which generates 80pc of its investment banking revenues.

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