Sergo Capital Follows The Smart Money in 2018

Sergo Capital
Sergo Capital Follows The Smart Money As Equity Markets Rise And Fall In UK For 2018.

Jonathan Nehring a senior analyst with Sergo Capital said today, “asset managers are well aware of the fact that it is easy to forget the rollercoaster that many more equities than usual have been on this year. From the fall of Carillion to British high street casualties, investors in the UK have been taken by surprise more often in a period of short, sharp moves for shares across the broader FTSE 350”

Forecasting where the UK stock market will go next is as risky as predicting the weather. Few would have predicted that a cold snap would show up in retailer results as the prime culprit for reduced sales. Investor sentiment is as unpredictable as the weather — from optimism in January to negativity in February and March and back again. Similarly, with economic growth near standstill, together with the ongoing Brexit fiascos and carnage on the high street, no one anticipated the FTSE 100 to be marching towards 8,000 when just a few weeks ago it passed 7,000 going in the opposite direction.

With UK stocks still trading near record highs, Jonathan Nehring a senior analyst with Sergo Capital said today, “asset managers are well aware of the fact that it is easy to forget the rollercoaster that many more equities than usual have been on this year. From the fall of Carillion to British high street casualties, investors in the UK have been taken by surprise more often in a period of short, sharp moves for shares across the broader FTSE 350”. According to data compiled by Olivetree, “124 stocks in the FTSE 350 fell more than 5 % in a day during the first quarter, up from 77 in the same period of 2017”. So far this year descents of this scale have occurred many times, compared with a few less occasions in 2017. UK equities have also had better daily gains more often, though with a less prominent increase from last year.

The comparatively reliable amount of stocks having rebounds of more than 5 %, 123 did in the first quarter compared with 99 in the same period in 2017, which reflects partially constant levels of inbound M&A as weaker pound made UK businesses more attractive for foreign buyers. In some cases, and mostly for businesses whose shares have suffered quick drops in a day, experts at Sergo Capital suggests that it is worth asking whether the money driving these drops is simply less intelligent.

There are some strong reasons why some share prices have had such a roiling this year, with the consumer and retail segments yielding a series of revenue cautions. Tobacco, food and beverages, alongside media, are among the industry groups that have struggled this year. However, beware. “The FTSE peaks are also a danger for stock pickers, who can now just as easily get crushed when trying to box clever with momentum-led trading”.

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