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Yahoo
19-06-2025
- Business
- Yahoo
Europe's stock markets are finally having their moment in the sun
When we reach the half-way point of 2025 it will be surprising if the regional equity market leader board is not topped by Europe. With a few days to go to the end of June, the Euro Stoxx index is up 20pc in the year to date, twice as much as its closest rivals – emerging markets and the UK. The US – both the S&P 500 and Nasdaq – are marginally under water, despite a spectacular V-shaped recovery from the 'liberation day' slump. It is Europe's strongest relative start since 2000. This was not what investors expected. Six months ago, US exceptionalism was alive and kicking and the European glass was half empty. Capital had flowed west for years as America accelerated out of the pandemic, buoyed by Biden-era fiscal spending. Europe, meanwhile, had flirted with recession in the wake of Russia's invasion of Ukraine and the energy-fuelled inflation that it triggered. Even after half a year of steady outperformance, in up markets and down, many investors are still struggling with the new reality. We have had a few months of inflows to European equity markets, but this has barely made a dent in an extended period of outflows. When the market pendulum swings, it tends to be a multi-year reversal. No one should fear that they have missed the boat. The first three months of 2025 was the first quarter of positive flows into European equity funds after 12 consecutive quarters of net outflows. The €26bn (£22.2bn) taken in has almost been matched by €22bn in April and May and the second quarter is, therefore, shaping up to exceed the previous record of €31bn, achieved in 2015 as the region emerged from the eurozone sovereign debt crisis. This embedded content is not available in your region. So, what has got investors so excited? The first point to make is that investment is a kind of zero-sum game. For money to flow into one market, it must flow out of another. And Europe's biggest advantage today is that it is not America. As I pointed out a couple of weeks back, there are good reasons to maintain an exposure to the world's biggest stock market – demographics, energy security, easier regulation and a huge domestic economy among them. But in the short run, policy uncertainty, recession risk, an inflationary trade war and punchy valuations make a rotation out of US assets an uncontroversial trade. There is plenty not to like about European politics. It is cumbersome, bureaucratic, over-keen on regulation and fragmented. It does not encourage innovation. It is more stakeholder than shareholder friendly. But it is predictable. It does not change its mind every five minutes. And that gets a tick from investors who, as a rule, dislike surprises. One of the advantages of Europe's political stability has been that the ECB has been able to anticipate continuing disinflation and cut interest rates accordingly, unlike the Fed which has been forced to sit on its hands to see whether on-off tariffs will be inflationary or recessionary. President Donald Trump may call Jerome Powell 'too late', but there is a reason why the Fed chairman is not rushing to claim victory over inflation. The ECB has halved its interest rate to 2pc, and monetary policy will contribute to the region's growth outlook this year and next. So, too, will fiscal policy, with the International Monetary Fund estimating that a looser tax framework will deliver a 1.6 percentage point stimulus in Germany and 0.8pc in France. At the heart of this is a blueprint to improve Europe's military readiness through higher defence spending. Member states will be able to deviate from the EU's fiscal rules to buy tanks, guns and military tech. Germany alone is planning to spend an additional €500bn. After years in which the engine of European growth sputtered along in second gear, there is the prospect of a multi-year period of turbocharged military-industrial investment. America's reluctance to backstop European defence has been a gift. There is a question mark over the speed and extent to which this feeds through into growth. There is further doubt as to which companies will ultimately benefit from the increased spending. There is many a slip 'twixt cup and mouth, and the soaraway share prices of businesses such as Rheinmetall may well come back to bite investors who have tried to get ahead of the curve. But earnings follow economic growth and, at the margin, analysts' forecasts for European companies are nudging higher at the same time as those for their US counterparts are in decline. Earnings expectations are important because, for years, the US's valuation premium has been justified by the greater profitability of US companies. If US and European valuations are to move closer, it will only be on the back of a narrowing earnings gap. Another important advantage that Europe has over the US is the greater income it offers investors. An average dividend yield of more than 3pc is twice that paid by US companies, and more European companies pay a dividend at all (93pc versus 75pc). Goldman Sachs expects European companies to return 5pc of their value to shareholders through dividends and share buybacks this year versus 4pc for US companies. Of course, there are risks with a shift away from the US towards Europe. A weakening dollar will reduce the value on translation of the quarter or so of European company profits that is earned in America. Trade uncertainty remains significant as we approach the end of the 90-day tariff pause. But after years in which investment portfolios have become over reliant on the US, there is scope for at least some of that money to find its way back home. Tom Stevenson is an investment director at Fidelity International. The views are his own. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Gulf Business
04-06-2025
- Business
- Gulf Business
Investing in 2025: Gulf Business panel to unpack UAE's hottest trends
Scenes from previous Gulf Business Breakfast Briefings. From booming IPO pipelines to surging interest in residence-by-investment schemes, the UAE remains one of the most compelling destinations for capital in 2025. To decode what's driving this momentum, Gulf Business will host its next flagship Breakfast Briefing panel event on June 25 at the Metropolitan Hotel Dubai, bringing together industry leaders for a morning of sharp analysis and forward-looking discussion. Under the theme 'UAE's hottest investment trends: what's driving growth in 2025' , the event promises a wide-ranging conversation on the forces shaping investor appetite — from shifting global mobility patterns and public listings to the impact of generational wealth transfer and digital disruption in finance. Set against the backdrop of the UAE's pro-investment policies and continued economic resilience, the panel will offer insights for both seasoned investors and new entrants looking to gain an edge in the region. A top-tier speaker lineup Among the confirmed speakers are: Yasmine Omari , head of wealth planning, Bank of Singapore Yogesh Khairajani , global market strategist, Century Financial Gemma Wild , head of global collaboration, MENA GPB, HSBC Manasvi Ghelani , associate director – customer engagement, Middle East Africa, Frost & Sullivan Muhammed Hassan , capital markets leader, PwC Dave Chaggar , sales director, Capital Club Limited Adel Mardini , CEO, Jetex Rahul Singh , managing director, Thrifty & Dollar Car Rental Claire Vuylsteke , director, Orbcom Karishma Hingorani , founder and podcaster, Karishma Konnect Three key sessions will headline the event: Global mobility & residence-by-investment Kicking off at 9:15am, this session explores how geopolitical uncertainty and changing tax landscapes are driving demand for alternative citizenship and relocation. Moderated by Orbcom's Claire Vuylsteke, the panel will discuss the role of residence-by-investment in securing personal freedom and capital diversification for HNWIs based in the UAE. IPO outlook: 2025 and beyond As Dubai and Abu Dhabi ramp up their listings strategies, this panel — moderated by Gulf Business Group Editor Gareth van Zyl — will explore what's next for capital markets in the region. Speakers from Century Financial, PwC and Frost & Sullivan will dissect the performance of recent IPOs, investor sentiment, and how the UAE stacks up against global exchanges. The great wealth transfer & new investment strategies With trillions of dollars set to shift hands globally over the coming decade, this final session looks at how family offices, private banks and platforms are adapting. Moderated by Karishma Hingorani, panellists from Bank of Singapore, HSBC and Capital Club will explore emerging investment behaviour among digital-native inheritors, and the future of wealth planning in the region. Invitation to investors and professionals The Gulf Business Breakfast Panel begins with registration and networking at 8:00am , followed by a welcome address and opening remarks. Attendance is free by invitation or registration, but places are limited. Whether you're a wealth advisor, entrepreneur, family office executive or institutional investor, this is a morning designed to help you make sense of the UAE's most powerful investment signals — and position accordingly.
South China Morning Post
04-06-2025
- Business
- South China Morning Post
Wealth Report
Wealth Report Your independent, authoritative guide to wealth in Hong Kong and Asia, providing insights on wealth management, investment trends, family offices, holistic wealth and the wider financial landscape across the region.
