Bid activity helps London equities
News that International Power is in talks with French competitor GDF Suez and a bid approach to Tomkins have helped to support the UK stock market this morning. However, there is still concern regarding the economic outlook for the UK, Europe and America with news that the Irish credit rating has been downgraded by Moody's. So will bid activity support markets in the short term?
As we have mentioned on numerous occasions, the relatively low UK exchange rate has attracted the attention of overseas investors looking to acquire UK assets at "reasonable prices". If as expected, the UK economy eventually recovers then the exchange rate should begin to strengthen and reduce the competitive edge which overseas investors have had for some time. Whether this is part of the reason for today's sudden flurry of bids is open to debate but there is no doubt that the relatively low exchange rate has had an impact.
It will be interesting to see if this flurry of activity continues in the short-term and whether indeed this is enough to support the stock market while the economy receives the attention of the UK government. It can sometimes be very difficult to rationalise the performance of the UK stock market against that of the UK economy.
Share this..
Related stories
What is ethical investing?
Over the last few years we have seen a substantial growth in the popularity of investment strategies such as ethical investing (otherwise known as socially responsible investing) but are the returns in the same league as non-ethical investment?
It is worth reminding ourselves what the term ethical investing actually relates to and the restrictions this can have on your investment de...
Are UK investors jumping back into the stock market?
The Investment Management Association (IMA) has issued a very upbeat report on the state of the UK investment market with confirmation that the second quarter of 2009 saw a net £7.4 billion invested in the sector compared to just £2.3 billion in the same period last year. This figure is the net investment in the sector after taking into account redemptions and withdrawals and is very positive fo...
Read MoreCould gold hit $1,300 an ounce?
Experts in the field of gold are predicting a rise in 2010 with the price set to hit as high as $1,300 an ounce. Interestingly it would appear that more gold is being scrapped through jewellers, pawnbrokers and gold trading companies than is actually being mined at the moment. This perfectly illustrates the pressure on the price of gold and the lack of ready supply to the main market. So why is go...
Read MoreBradford and Bingley Shares Plummet In Early Trading
Yesterdays announcement of a deal with US based investment house Texas Pacific, and a warning that profits for the first 4 months of the year are just under half of the figure for the same period last year, saw Bradford and Bingley shares plummet in early trading. Such was the selling pressure on the shares they had to be suspended for a 9 minute period to restore order and allow the company to a...
Read MoreFormer Belgo boss admits leaking price sensitive information
Former multimillionaire Tim Power has admitted leaking price sensitive information about the sale of the Belgo restaurant chain which resulted in a rise in the share price of suitor Lonsdale Holdings. During what investigators claim was revenge by a love rival, a lengthy investigation by the former Department of Trade and Industry has resulted in one of very few successful "inside dealing" prosecu...
Read More