World view
US rebound
Financialplanners should look to the US for investment opportunities, according to Seligman International regional director for Asia, Joseph Lam. He says interest rates have halved in the past two years and are close to the previous downturn low of three per cent. This has in turn placed some pressure on inflation, but Lam points out that since 1926, whenever inflation has hovered around two per cent, the S&P 500 has returned an average of 12 per cent. Lam also says that commodity prices have dropped in the US and the promised tax rebate and reductions of US$1.36 trillion over the next 10 years will spur spending in the short-term.
Citigroup job cull
SalomonSmith Barney and Citicorp operations in Australia will emerge unscathed from the planned culling of 3,500 jobs internationally from Citigroup over the next year. Hong Kong-based Citigroup Asia region spokesperson Richard Tesvich says there are no plans to cut jobs in the Asian region. Citigroup, which boasts an international workforce of more than a 250,000, says it will be culling most of the 3,500 jobs in the US — about 2,100. The group is believed to be reacting to the deep slump in the investment markets, but there has also been speculation that the job cuts relate to the amalgamation process of the 1998 merger between Citicorp and the Travelers Group.
Super disatisfaction
Lessthan one US 401(k) superannuation plan investor has access to specific financial advice, according to a study by the Boston Research Group. Boston Group president Warren Cormier says super funds are reluctant to provide financial advice for fear that the fund members will sue them. And less than half of all fund members are satisfied with current investment education initiatives, according to the same study.
International surge
UK super funds are apportioning an increasing number of investments to the international sector. A recent survey by Dresdner RCM Global Investors found that more than two-thirds of UK consultants now believe as much as half of a superannuation fund should be invested outside of the UK. Currently 68 per cent is invested in UK equities and 32 per cent outside the UK. In Australia, exposure to overseas equities in super funds is forecast to grow from 23 per cent to 40 per cent.
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