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How FTSE 100 toughed it out with the bear

Credit Suisse head of income funds for asset management Graham Ashby says it is no surprise that the FTSE100 was one of last leading stock-markets to enter bear market territory.

He says the rationale for the resilience of the UK equ- ity market is threefold, pointing to an increased global- isation of the index, reduced dependence of UK-based companies on the domestic economy and UK equities being cheaper than their overseas counterparts.

He points to the success of the London Stock Exchange in convincing several international companies to have a main listing for their shares in the UK. He believes this is due to the UK’s “light touch” on regulation.

Ashby says the UK equity market is likely to remain volatile for the next couple of months, with the spread between the winners and losers in the market set to widen.

He believes the current depressed level, coupled with resilient attributes of the FTSE100, mean the UK equity market offers value and should be beneficial to investors, although further falls may be seen before recovery.

He says: “As Warren Buffett said in a recent interview on CNBC: “Markets will do very wild, unpredictable things and you will see things you haven’t seen before in markets. That’s the way – people make markets and they’re not rational much of the time.”

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