Europe Seen Offering Haven For Investors

Germany and other European countries are set to deliver 3% economic growth this year, according to David Potts, a fund manager at Guinness Flight Hambro Asset Management Ltd. In contrast, the U.S. is forecast to generate 2% to 2.5% economic growth this year, while Japanese growth is likely to be fla...

Full description

Saved in:
Bibliographic Details
Published inThe Wall Street journal Asia
Main Author By staff reporter Pui-Wing Tam And Daisy Maxey of
Format Newspaper Article
LanguageEnglish
Published Victoria, Hong Kong Dow Jones & Company Inc 13.03.1998
Subjects
Economic growth
Investment advisors
Privatization
Stockholders
Stocks
Online AccessGet full text

Cover

More Information
Summary:Germany and other European countries are set to deliver 3% economic growth this year, according to David Potts, a fund manager at Guinness Flight Hambro Asset Management Ltd. In contrast, the U.S. is forecast to generate 2% to 2.5% economic growth this year, while Japanese growth is likely to be flat, he said. Driving Europe's growth is a return in consumer confidence and the increasing attention European companies are paying to shareholder value, said Mr. Potts. Europe's economic and monetary union next year will also keep interest rates across the continent low, providing a favorable backdrop for equities, he added. What's more, there appears to be a long-term shift in investor interest away from bonds and cash and toward stocks. To be sure, most European markets have already experienced a healthy run in 1997. Market valuations are at an average of 18 times projected 1999 earnings, calculated Mr. Potts. But since per-share earnings growth is forecast to be a robust 15% to 20% in the next few years, such valuations are justified. In addition, European markets are still cheaper than expensive U.S. stocks, Mr. Potts said.
ISSN:0377-9920