St James Place : No lack of interest

A second consecutive week of positive returns from the emerging market economies was not enough to stimulate the fortunes of western equity markets. The US, UK, Europe and Japan all fell in a week when a heavy sell-off for technology and biotech stocks drove markets lower. The market has become increasingly nervous over what it perceives to be stretched valuations and this week saw a 17 per cent rise in the VIX volatility index, often referred to as the 'investor fear gauge'.

On closer inspection there was a chink of light for the eurozone, as many of the peripheral nations - Italy, Ireland, Spain and Greece , amongst others - continued the trend of positive growth which began at the turn of the year. Greece also enjoyed a successful return to the debt markets and took orders of €20 billion of its €3 billion of five-year bonds. Despite the well-publicised problems in the Greek economy, many commentators noted that poorly-rated Greek banks can now issue bonds at rates paid a decade ago on 10-year German bunds.

This week's bulletin also includes:

• Whilst the recent self-off of all things 'tech' has been the primary reason for the drop in global equity markets, long-term investors have identified selected opportunities amongst the mayhem.
• Residential property prices rose by almost 10% during 2013 on the back of increased mortgage lending, yet for buy-to-let investors the next few years could prove to be quite challenging.
• In the face of significant competition from low-cost European retailers share prices for many of the UK's supermarket chains have suffered, however Nick Purves of RWC remains confident that there are still plenty of reasons to maintain his holdings in a number of these businesses.

View this week's Market Bulletin, which contains thoughts and opinions of St. James's Place and our range of investment managers on the key issues affecting investors.