Market Numbers & News 18th April 2014
The FTSE 100 closed at 6625.25 +63.55 points +0.97% on previous weeks close 6561.70
+381.58 points +6.11% against a year ago at 6243.67
“In House”, we regard the FTSE 100 index as being somewhat volatile so that direct comparison with more balanced or cautiously constructed portfolios will not always give an appropriate result although reviewing the index is useful as a general guide to market activity in the larger capitalised market.
Most sectors showed an increase over the previous week.
Sectors which performed well over the last week include:
Oil & Gas (Oil & Gas Producers, Oil Equipment Servicestion), which closed at
8734.63 +1.88% on the week
Utilities (Electricity, Gas Water & Multiutilities), which closed at 8555.55 +2.06% on the week.
Brent Crude closed at 109.53 (last week 107.46)
Bank of England Base (Repo) Rate at 0.50% (since 05/03/2009)
One Pound GBP buys 1.68098USD (lw 1.6722 USD) and 1.2149EUROS (lw 1.2041 EUROS)
Gold PM London Fix at 1299.00 USD per troy ounce (last week 1318.00)
UK FTSE Actuaries Indices 15 year Gilt Yield on 15th of the month approx. 3.09% (year ago 2.27%)
PENSIONS & ANNUITIES: In the wake of Chancellor Osborne’s Budget based Pensions reform, fund managers are reportedly poised to take on the UK annuities market with aggressive challenges to the existing status quo dominated by life insurers. Up until now fund management companies have found it difficult to enter this particular market because of the restrictive way in which pension based savings were channelled into more or less predictable “end of the line” products. In the end, it may be shown that many years of innovative possibilities have been wasted as a result of these reforms coming so late – then again, this is only a personal point of view…
Nevertheless, a significant number now feel that Chancellor George Osborne has done well to tackle this whole area as robustly as he has – ordinary people now have a better range of choices at retirement and, possibly more importantly, young self employed entrepreneurs starting out on their careers as well as individuals looking to bolster their retirement savings, may well find themselves less sceptical about tying up their money in what many viewed as an overly restrictive long term savings vehicle – this fact in itself may prove a much needed fillip to the much talked about “savings gap” problem.
There is some debate about the risk that pensioners will fritter away their savings. However, on the basis that most people will see that they need to be sensible about their retirement provision and many will indeed seek professional financial planning advice to make sure they and their lifestyle stay on track and “in the black”, it is more likely that the retirement savings market will grow and grow as more seek to hang on to their hard won pension based investments rather than buy an annuity which is considered poor value for money.
According to the Pensions Institute at Cass Business School, the value of defined contribution pension savings is forecast to grow to £1.7 trillion by 2030, making it one of the world’s largest and most lucrative savings markets.
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