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Cheap may become cheaper

Cartesian fund manager Jeremy Hall believes the FTSE 100 could drop below 3,600 although he is expecting to see increasingly attractive valuations in the next 12 to 24 months.

Hall says further bad news from distressed companies could push the index lower.

He says: “Earnings’ expectations are too high and are now starting to fall fast, while more questions will be raised on earnings-based valuations. I expect that we will see a number of downgrades in the coming months.”

Hall, who manages the UK equity 130/30 fund, says the “two-speed” nature of the portfolio allows the firm to pick up companies that look cheap while being able to steer clear of potential value traps.

He says: “Valuations are at such a fascinating stage, given the opportunities they represent in the market. The problem is that people could be fooled into cheap opportunities, particularly in the likes of mining and cyclicals, that may appear cheap but could actually fall even further.”


Make or break

Whether pension reform succeeds or fails will be measured mainly by how many people opt out of automatic enrolment. However good the legislation and the compliance getting employers to carry out their duties, it all boils down to whether people remain an active member of a pension scheme and save for their retirement. It is fundamental that we get the culture surrounding saving spot on.

“Trust me, I’m a structured product provider”

Financial crises teach a lot of hard lessons – lessons in greed, lessons in fear, lessons about calling markets, about overborrowing, about not relying on other parties beyond what it says in the contract, about not relying solely on ratings agencies.

L&G doubles credit default reserves

Legal & General has more than doubled its credit default reserves to £1.2bn and claims its surplus capital stood in excess of £1.6bn at the end of last year, quashing reports about its weak capital position.

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Pensions: trouble ahead?

The pace of change in the pension’s space has been little short of astonishing, and has left thousands of employers struggling to keep their pension policy compliant, and also on the right side of current best practice and governance. Many employers, and indeed many in the pensions industry itself, would like to see a period of no change during the next term of government. This would give all sides a chance to catch up and draw breath. 


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