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Analysts predict ‘weak’ day for European providers

Annuity-Arrow-700x450.jpgAnalysts at investment firm Keefe, Bruyette & Woods are predicting European insurers will have a weak day following the result of the US Presidential Election.

After Republican candidate Donald Trump was confirmed as winning the election today, Prudential, Zurich and Aegon have been named among insurers that are expected to be impacted by movements in the US dollar.

KBW analysts say: “As with the Brexit vote earlier this year, we expect today to be a weak one for European insurers in general, having been risk on/risk-off trades over the past few weeks into the US election.”

An Aegon spokesman says there will be no impact on the company’s UK business from the election result.

At the time of publication Prudential and Zurich had not responded to requests for comment.

Since the election result was revealed, the FTSE gained ground on sharp losses it suffered this morning. The large-cap index initially dropped 2.1 per cent, but was 0.5 per cent down later in the morning.

The triumph of the unpredictable Republican nominee sent shock waves through Asian markets, which were open as results came through.

The Japanese Nikkei lost 5 per cent, while the Yen rallied against the dollar 3 per cent.

The Mexican peso, on the other hand, reached its lowest point ever against the dollar, falling 13 per cent.



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Apple: a stellar technology story

By Ali Unwin, head of technology sector research

Apple recently announced the highest-ever recorded quarterly net profit ($18bn), with the sale of 74.4 million iPhones helping the company deliver $74.6bn of revenue for the quarter ending December 2014. These sales were largely driven by strong demand for the new iPhone 6 and iPhone 6 Plus. Highlights included Chinese iPhone sales doubling year-on-year and unit growth of 44% in the US — supposedly a well-penetrated market. Apple ended the quarter with $178bn in cash on its balance sheet, having generated a staggering $30bn in free cash flow during the quarter.

At Neptune, we have been long-term believers in the Apple story, and continue to hold the stock in a number of our portfolios based on the company’s long-term growth prospects. This is predicated on our belief that Apple has proved thus far that it can — unusually for a consumer electronics company — maintain high margins for a sustained period of time, even as adoption of new technology slows down and competitors produce similar-specification products.

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Despite predictions that a vote to leave the European Union would result in an economic apocalypse, UK equities have shown the market equivalent of a stiff upper lip: bouncing back, keeping calm, and carrying on. Although the road towards Brexit remains clouded in uncertainty, UK equities offer a range of opportunities to investors seeking returns […]


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