2009 Market Outlook - Half Year Update

The trend's been our friend 

Since the launch of the HB Markets Market Outlook in January, our stocks tips – and we do not suggest it is an investment portfolio - returned an average of 35% between 29/01/09 and 15/06/09.

This edition has 36 stocks reviews, spanning the FTSE 100 to AIM, which include 8 further BUY/SPEC BUY recommendations and 8 downgrades.

The good news 

Banking has stabilised, quantitative easing and troubled asset release programmes have shored up bank balance sheets and liquidity is improving. Low interest rates have aided a surprisingly robust consumer in certain areas.

The bad news 

The housing market outlook remains grim, large capital spend has been challenged, profit warnings, bankruptcies and difficult credit markets persist for small companies and individuals.

There is value to invest in, and we remain very selective in our choices.

With the market stabilizing, we envisage signs of recovery for the real economy in Q1 2010. That is of course if fears of double dip recession do not materialise. In our view inevitable public sector spending cuts will at the very least hamper recovery.

Traffic lights 

A simple traffic light system for our sector analysis shows the current state of thinking but also the next step. For example, a green light and an amber light indicates we currently like the sector but investors should become increasingly cautious - a good example is the Pharmaceuticals sector which in our view are defensive but will offer little recovery potential.


Plus these additional features... 


Stocks featured in this report include... 

1PM, Afren, Alkane Energy, Antonov, ARC International, Asian Citrus, ATH Resources, BHP Billiton, Carillion, China Shoto, Carillion, Cineworld, Clear Debt, EAGA, Energetix, Game Group, GlaxoSmithKline, Gold Oil, Goldplat, Hill and Smith, JKX Oil, Leisure and Gaming, Oxford Catalysts, Porvair, SCOTTY Group, Southern Bear, STM, Superglass, Synchronica, Tanfield, Torotrak, Tower Resources, Verona Pharma, Victoria Oil and Gas, West China Cement, William Hill 

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NOTE TO THE READER 

HB Markets provides this communication to subscribers to our research notes as and when the information is available.

These are flash views based on technical and/or fundamental analysis. They are not investment advice. In these volatile markets, all investments are speculative and prices may change quickly and go down as well as up. Investing in smaller companies may reward in terms of growth, but it carries a greater degree of risk. You should discuss with your adviser prior to acting upon this information to ensure decisions are suited to your investment profile. Please ensure that you read and understand our risk warnings at the end of the document.

DISCLOSURES OF MATERIAL INTERESTS 

  1. The analyst may have a personal holding of the securities issued by the company, or of derivatives related to such securities.
  2. HB Markets plc or an affiliate may own more than 5% of the issued capital of the company.
  3. HB Markets plc or an affiliate may be party to an agreement with the company relating to the provision of corporate broking services, or has been party to such an agreement within the last 12 months. Our corporate broking agreements include a provision that we will prepare and publish research at such times as we consider appropriate.
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RISK WARNING NOTICE:All investments are speculative and prices may change quickly and go down as well as up. Past performance will not necessarily be repeated and is no guarantee of future success. There is an extra risk of losing money when shares are bought in some smaller companies including “penny shares”. There can be a big difference between the buying price and the selling price of these shares and if they have to be sold immediately, you may get back much less than you paid for them or in some circumstances, it may be difficult to sell at any price. It may also be difficult for you to obtain reliable information about the value of this investment or the extent of the risks to which it is exposed. Where a company has chosen to borrow money (gearing) as part of its business strategy its share price may become more volatile and subject to sudden and large falls. This investment may not be suitable for all investors, and clients should carefully consider their own personal financial circumstances before dealing in the stock market, particularly those on fixed incomes or approaching retirement age. If you have any doubts you should seek advice from your investment adviser or your broker at this firm.

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This document has been prepared and issued by HB Markets plc on the basis of publicly available information, internally developed data and other sources believed to be reliable. Whilst all reasonable care is taken to ensure that the facts stated are accurate and the opinions given are fair and reasonable, neither HB Markets plc nor any director, officer or employee shall in any way be responsible for its contents. This communication is intended to provide clients with information and should not be construed as an offer or solicitation to buy or sell securities.