European equities to bounce back
European equities may well make a turnaround next year, ending more than two years of poor performance, according to Fidelity Investments global institutional business and asset management president Richard Horlick.
Horlick says the poor performance of previous years has painted pictures of doom and gloom for investors but the scene might change as soon as next year.
“We are cautiously optimistic, [but] won’t plunge in and say you’re going to make a fortune. Europe has performed well, with the potential to change next year,” Horlick says.
Horlick says Europe’s heavy slant towards growth stocks in the past two years, coupled with being damaged by the tech wreck of 2000 resulted in a downward spiral for the region.
“The market as a whole has seen many companies downgraded in Europe in the last few years. European small companies have underperformed [compared] to other euro companies,” he says.
Horlick says confidence in the European Central Bank (ECB) needs to return before Europe turns around. He says increased market confidence in the ECB will see inflation and fixed interest decrease, leading to better conditions in Europe for economic growth.
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