Brighter outlook for world economy in 2013: report

By Romesh Navaratnarajah: Encouraging developments in the global economy seen at the end of 2012 has offered a brighter outlook for this year, according to a report by Henderson Global Investors.

Reduced expectations over economic growth and company earnings could make way for pleasantly surprising results rather than disappointment. Also, "tepid expectations for economic growth should also permit central banks to continue with accommodative monetary policy", the report noted.

Another development has been the gradual improvement of some economic indicators since mid-2012, including consumer confidence in the US and purchasing manager surveys in China. This boosted global real money growth for 2H2012 which points to stronger economic data in the early part of this year.  

"The big trend of 2013 could be a better environment for risk assets, such as equities. Companies have continued to repair their balance sheets, cash balances are strong and we would expect dividend payments to continue to rise. Companies are also likely to pursue share buybacks with excess cash, particularly in the US," said Bill McQuaker, Head of Multi-Asset, Henderson Global Investors.

Meanwhile, merger and acquisition activity is expected to remain below historical averages, as greater business confidence is necessary for its growth.

As for the recovery of equity markets, this depends on the extent of recovery of the global economy. A gentle recovery is favoured as this will permit equities to advance without unsettling bond markets.

"In summary, it is possible that 2013 is the year in which we see more convincing evidence of the global economy emerging from the financial crisis and moving into a different phase," added McQuaker. Romesh Navaratnarajah, Senior Editor of PropertyGuru, wrote this story. To contact him about this or other stories email romesh@allproperty.com.sg Related Stories: Singapore Asia's 8th most expensive city

Economy to grow slowly this year and next

Singapore a favoured spot for millionaires

More from PropertyGuru:
Singapore Asia's 8th most expensive city
Economy to grow slowly this year and next
Singapore a favoured spot for millionaires
Singapore tops quality of living in Asia: survey

  • Wednesday #sgroundup: More than 300 people missing after South Korean ferry sinks - coastguard 2 hours 23 minutes ago
    Wednesday #sgroundup: More than 300 people missing after South Korean ferry sinks - coastguard

    Here are the top trending stories of the day in case you missed them:

  • 2015 Chevrolet Trax small SUV rolls back to America 14 hours ago
    2015 Chevrolet Trax small SUV rolls back to America

    For the past two years, car shoppers from Acapulco to Winnipeg could wander into their Chevy dealers and kick the tires on a city-sized sport utility vehicle named the Trax — and about 90,000 have done so. Today, Chevy revealed the version of the Trax it will bring to the United States, for those less well-heeled buyers who want the shape of an SUV without the window sticker they usually carry.

  • Ford Transit Skyliner concept revives the ultra-luxury van 16 hours ago
    Ford Transit Skyliner concept revives the ultra-luxury van

    “Once you do stand-up, you don’t want to go back.” No, we’re not talking about comedy, but rather an emerging trend in luxury transport that’s bringing us ever taller, more capacious, more pimpdillyicious limousines. The quote came from a Ford designer, Tim Stoehr, predicting an increase in interest in limos based on big vans like the new Transit. Of course, these are nothing new; up-fitters have taken quite kindly to the Mercedes-Benz Sprinter, and apparently Ford is chomping at the bit to get in on the action, too. So Ford enlisted the help of the largest Ford dealer in the world, Galpin Auto Sports in Van Nuys, Calif., to help design and build its first super-lux Transit concept, dubbed the Skyliner.

  • Amazon to release smartphone later this year: report
    Amazon to release smartphone later this year: report

    Amazon is preparing to release a smartphone in the second half of 2014, thrusting itself into a market already crowded with Apple and Samsung models, The Wall Street Journal reported. The company aims to announce its new product by the end of June and ship to customers by the end of September in time for the holidays, the Journal said in a Friday report, citing unnamed people briefed on the matter. Amazon, it said, hopes to differentiate its phone from other models with a screen that displays hologram-like three-dimensional images, which can be viewed without special glasses. Earlier this month the retailer unveiled a new media streaming device, Amazon Fire TV, which it touted as simplifying the experience of watching video online.

  • Supermodel Qi Qi is afraid of flying
    Supermodel Qi Qi is afraid of flying

    The supermodel said that she will take her daughter in a vacation but will try to avoid boarding a plane

  • One dead as S. Korea ferry with 476 passengers sinks
    One dead as S. Korea ferry with 476 passengers sinks

    South Korea's coastguard said Wednesday one person had been killed as it struggled to rescue 476 people -- mostly high school students -- aboard a ferry that ran aground and sank off the southern coast. "The ferry is almost completely submerged," Lee said, adding that a detachment of South Korean Navy SEALS were taking part in the rescue. Of the 450 passengers on board the ferry bound for the southern resort island of Jeju, 325 were students from a high school in Ansan, south of Seoul. The 6,825-tonne ferry, which had sailed out of the western port of Incheon on Tuesday evening, ran into trouble some 20 kilometres (13 miles) off the island of Byungpoong.