Equity warning from index-linked gilts

Article Abstract:

UK government securities (gilts) yields compared with dividends indicate that UK share prices are expensive. The gap between the two has fallen to a yield of 0.1% for equities above gilts compared with a normal average of 0.5%. With an estimate of a future inflation rate of 3%, this gives a yield for index-linked gilts which is higher than equities. Equity prices have dropped on previous occasions when gilts yields rose above equities. It is not clear whether investors should sell, since equity yields could rise.

Government securities

---

On the make at the margin

Article Abstract:

Investors may use a stock portfolio to borrow in order to invest in more stocks. This practice was linked to the collapse of the stock market in the 1920s, but has since become more closely regulated. Margin accounts could become more common in the UK. They are already offered by Shore and Co, Fidelity Stockbrokers and Killik and Co. The arrival of the US firm, ED Jones, in the UK market could make margin accounts more common in the UK as could the move to Crest, the electronic trading system.

Margins (Security trading), Margins (Securities trading)

---

A new-issue slowdown

Article Abstract:

New share issues in the UK are tending to slow down in Oct 1996. Over 81 billion pounds sterling was raised through 81 flotations in the first three quarters of 1996 and the total for the main market in 1996 could reach record levels. The market has seen such an influx of new entrants that institutions have become less enthusiastic. Flotation price tags have had to be lowered as a consequence, affecting companies such as Allied Carpets and Somerfield.

Similar abstracts:

• Abstracts: Equities shrug off lower output figures. UK equities: a positive outlook. UK equities: pensive peaks
• Abstracts: Index-linked gilts to stay the odd man out. A shock in store
• Abstracts: Index tracking funds. A lifetime guarantee
• Abstracts: Christmas comes early. The next big move will be down
• Abstracts: Through the looking glass. Tessas step out

This website is not affiliated with document authors or copyright owners. This page is provided for informational purposes only. Unintentional errors are possible.