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Experts predict revival for equities: all the signs are there for a strong comeback next year.

Document Cited in Related
Vincent
AuthorHayward, Cathy
PositionInvestments

Despite the decision by many companies to move their pension funds from equities to bonds, the outlook for global equities is extremely positive, a leading fund manager has told Financial Management.

Earnings estimates are on the rise around the world, according to Chris Lees, fund manager of the Baring Global Growth Trust, who attributed the increase in second-quarter earnings to improvements in cost control and a more cautious approach from directors when forecastings sales and profits.

He added that growth in the UK was improving on the back of increasing consumer confidence and an upturn in retail sales. Although Europe had suffered a poor tourist season, the leading indicators were now starting to look good.

"The most positive story in global equities is Japan, which continues to surprise people with its strong industrial exports and an improving domestic economy," Lees said. "Japanese companies have had a decade to get their costs down, and top-line growth will be converted into earnings-per-share profit, with stronger growth figures expected next year."

The experience of the Alternative Investment Market (AIM) over the past quarter backs up his view. In the third quarter the number of new admissions increased more than 50 per cent on...

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