IIp29_30Internaxx.qxd 20/5/09 15:53 Page 3
Market research | 29
Market research
from Internaxx
May 2009
This section is brought to you by the Luxembourg
based online broker Internaxx. Market analysis is
provided by Fortis Investments, the asset
management arm of the Fortis group.
Fog is slowly lifting (source: Fortis be short-lived. We expect the recovery to be quarter came in slightly positive. Bank loans in
Investments) bumpy and drawn-out. China surged after the government urged banks
The possibility of a global depression was a very to lend more. Industrial production recovered
real threat at the start of the year. The global Eurozone: improving, but less somewhat, while retail sales stayed strong.
economy was held hostage by a credit crunch, a clearly
collapse in global trade and a vicious inventory It is not unusual for the eurozone to lag Emerging markets
cycle. While the current economic situation developments in the US by a quarter or two. Though some eastern European countries had
remains weak, leading indicators have perked Indeed, leading indicators are moderately to be bailed out by international organisations,
up. positive. Confidence among purchasing the largest, Poland and the Czech Republic, have
managers in the manufacturing and services done relatively well. It remains the case,
US: improving, but will it last? sectors has bounced from record lows while the however, that the region’s main export
Leading US indicators, such as the ISM indices, German gauge of producer confidence has destination, western Europe, is in a severe
producer confidence, manufactured goods improved. Even the eurozone’s Economic recession. One of the main problems facing
orders and consumer confidence have stopped Sentiment indicator, probably the best leading eastern Europe is borrowing in foreign
deteriorating and some have bounced back. indicator, has shown signs of improvement. currencies. With its own currencies falling, debt
That said, most of these indicators still point to Looking ahead, the travails of the eurozone loads have risen sharply. The outlook for the
a recession and the Leading Economic Indicator depend largely on the global economy. The region is far from rosy.
has not yet signalled a bottom. region has always depended on exports to The fate of many Latin American economies
Typically, consumers should start spending emerge from recession. is still tied to commodities. Since it looks like
again by dipping into savings or borrowing. But commodities have bottomed, this could also be
consumers are busy rebuilding their depleted In Asia, Japan suffers the case for commodity exporters. However, it is
capital and credit is tight. Business investment Asian economies suffered heavily from the unlikely that the growth rates of recent years
is crippled by overcapacity, adverse financial collapse in global trade, caused by falling will return quickly.
developments and sharp falls in profitability. demand, a lack of trade credit and inventory
The cross-currents of weak labour and housing adjustments. Japan’s trade surplus turned to a Monetary policy: quantitative
markets, large losses of wealth and tight credit deficit, confidence among producers and easing
conditions on the one hand and massive consumers is weak and deflation has returned. The fear that the huge liquidity creation will
government stimulus on the other make the In Asia’s export-oriented economies, signs of cause runaway inflation is moot, as liquidity is
outlook highly uncertain. Our concern is that a improvement are emerging. Producer sentiment being hoarded by banks and is not boosting
near-term government-induced recovery could in Korea rebounded and growth in the first lending. We think the underutilisation of world
www.investmentinternational.com May 2009 Investment International
Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36