The problem remains that all those geo-political issues that have impacted on sentiment continue to be unresolved and look likely to cast a pall over market sentiment for the foreseeable future. EU sanctions against Russia remain in place because the cease fire appears unsteady, while the Islamic State is grabbing even more attention. Probably the best approach in such circumstances is to turn one’s attention to mo re domestic issues. And plenty is happening at home to maintain investors’ interest.
The Conservative Party Conference, of course, provides something of a guide to how the coalition might deal with issues that will have an impact on shares. The announcement that the 55% tax levied on pension funds on death is to be abolished was a further nail in the coffin of annuities. Little wonder that insurance company shares suffered as a consequence. The apparent cost to the Treasury is a meagre £150 million, suggesting that few will really gain much benefit from the Chancellor’s largesse.
And Tesco remains in the news, with the new chief executive warning staff not to shred documents that might relate to the background of the over-optimistic profits forecast that has seen a number of senior executives there fall on their swords. It can’t feel too comforting either to see cut price rival Aldi report a two thirds leap in profits. Its market share of UK groceries has been steadily rising and is now nudging 5%.
Meanwhile, rumours abound that Virgin Money is about to announce a flotation on the stock market. It seems that the face of British banking is about to change further. Flotations, like takeovers, are generally a sign of confidence in the future direction of the stock market. Let us hope we see more of these and less depressing news coming out of the Middle East and Ukraine. Our leading index is, after all, still lower than the level achieved nearly 15 years ago.