| Topic: |
Politics > Politics-USA |
| User: |
"Carlos Trevino" |
| Date: |
04 Apr 2007 10:11:36 PM |
| Object: |
Re: Europe tops US in stock market value - Bye Bye AmeriKan Pie |
"Möbius Pretzel" <M0bius_A_Pretzel@yahoo.com> wrote in message
news:1175671175.417335.249890@n59g2000hsh.googlegroups.com...
Europe tops US in stock market value
April 2 2007
Europe has eclipsed the US in stock market value for the first time
since the first world war in another sign of the slipping of the
global dominance of American capital markets.
The rise of the euro against the dollar, growth of east European
markets such as Russia and stock market outperformance spurred by
improving profitability have seen Europe close a long-held gap with
the US. Ian Harnett at Absolute Strategy Research, who identified the
move, said this marked a "seismic shift" in markets.
http://www.ft.com/cms/s/bf6a00e4-e14b-11db-bd73-000b5df10621,_i_rssPage=6700d4e4-6714-11da-a650-0000779e2340.html
Gloating I see?
Carlos Trevino
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| User: "Carlos Trevino" |
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| Title: Re: Europe tops US in stock market value - Bye Bye AmeriKan Pie |
04 Apr 2007 10:47:17 PM |
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By John Authers, Investment Editor Mon Apr 2, 3:06 PM ET
Europe, if you are a stock investor, is now bigger than the US. The
landmark, passed last week, has been achieved despite the retirement of a
net EU107.1bn (£72.4bn) in European equity over the past two years,
according to Citigroup (NYSE:C - news). Its import goes far beyond the noise
over the impact of Sarbanes-Oxley corporate governance rules.
That said, there are caveats. First, the definition of "Europe" is one that
economists, market analysts, or even geographers would not normally
recognise. It covers all of "emerging Europe" - including Turkey and Russia.
This is "Europe plus Siberia and Anatolia". By crossing the Urals, "Europe"
includes Russia's fuel reserves. By crossing the Bosphorus, it gains the
Turkish economy, currently growing at more than 6 per cent. The population
of this "Europe" is about 2.5 times that of the US. North America, including
Canada and Mexico, might be a better comparison.
Secondly, while the Thomson Financial/Datastream indices show this landmark,
the FTSE and MSCI indices, more widely used by international investors, do
not. MSCI shows the US as 37 per cent bigger than Europe. This is because
Datastream, unlike FTSE and MSCI, does not adjust for the size of free
floats, and hence gives European market cap full credit for formerly
nationalised companies where governments retain a stake. This better
captures underlying value, but MSCI and FTSE arguably better capture the
reality facing investors.
But Datastream still captures a secular trend. Europe's economy is growing
faster than the US. The euro has gained against the dollar for all of this
century. Germany out-performed all other big markets in the first quarter,
with the Dax up 4.85 per cent. The S&P 500 was flat.
Some of these factors could prove temporary. But the shift in corporate
culture looks deep. For decades, through boom and bust, US companies were
more focused on shareholder value, and delivered far higher returns on
equity than their European counterparts. Restructuring has turned that
round. According to Absolute Strategy Research, European companies managed a
return on equity last month of 17.5 per cent, compared to 16.5 per cent for
the US.
http://news.yahoo.com/s/ft/20070402/bs_ft/fto040220071525110763
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