View more on these topics

Odey rallies round the banks

Odey Asset Management founder Crispin Odey believes the upturn in markets in the past couple of weeks could be more than a rally, with banks at the forefront of the turn-round.

Speaking at the Cazenove Capital MultiManager Live event in London on Tuesday, Odey said he can understand why people are more bullish on banks and financials in general and he expects the areas that led the falls last year will lead a bounceback.

Odey said his views are based on the margins that banks have re-established.

He said: “The fact is that today the cheapest mortgage anyone can get today is 4.5 per cent over two or three years fixed and from that you can see that those net interest margins are correcting.”

Odey, who has recently topped up the bank exposure in his Odey European income MAC portfolio, said banks are now far from being “hospital cases”, with many operating at 1.3 to 1.5 times earnings.

“If we are going to see a turn-round from deflation to inflation quickly, we will get a change in asset preference and the rating of equities in banks has been out of favour in the UK since 2000 falling from price/earnings multiples of 25 to six as the market has flourished. Now if we move to a inflationary period in the future, you are going to need real assets and the fact these types of shares are trading so cheaply makes them much more real assets than they are financial assets.”

Odey’s views contrast with those of Invesco Perpetual income manager Neil Woodford, who recently said he did not see banks as an attractive asset for the next three years, stating that investors are unsure of the quantum of bad assets.


Variable annuity business doubles in a year to £1bn

Sales of variable annuities have doubled in the past year to over £1bn, according to research from Watson Wyatt.Variable annuity premiums grew from £539m in 2007 to £1.15bn last year while the number of policies sold rose by more than 80 per cent from 7,775 to 14,128.Watson Wyatt says the rise was a result of […]

Private lessons

When we look back in 2017, how will we decide if pen-sion reform was successful or not? Some may think it is only successful if 100 per cent of employers comply with their new pension respon- sibilities, others will be satisfied if 75 per cent comply. Some may deem it a success if it creates seven million new savers, others would disagree if that meant a further five million save less than they did before because employers level down their contributions to existing schemes.


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm