Newspaper article The Evening Standard (London, England)

'No Sector Spared' Is the Grim Warning from Caz

Newspaper article The Evening Standard (London, England)

'No Sector Spared' Is the Grim Warning from Caz

Article excerpt


THE collateral damage to shares caused by the banking crisis and subsequent global economic collapse has been laid bare for stock market investors by Cazenove in its latest UK strategy briefing.

It makes grim reading, and shows little scope for short-term improvement.

The FTSE 100 index has fallen 41.3% in the past 10 months, having risen almost 4% last year. That highlights the kind of beating most investors' portfolios have taken. The value of the companies that make up the index is now at ?966 billion, but the survey from the Queen's stockbroker also sets out the idea that there are defensive stocks able to withstand a global economic slump.

It seems no sector has been spared by the fallout from the banking crisis and global economic slump.

The worst-performing sector has been the housebuilders, which have this year lost almost 70% of their collective value after the worst collapse in house prices in 20 years. Next comes the mining sector, down 58.1% since the start of the year, followed by general retailers (50.4%) and life assurers (53.6%). The banks' losses are a mere 47%.

The miners' performance makes toecurling reading. They led the market higher until a year ago, fed by strong demand from countries such as China and India, which sent the cost of raw materials soaring. The subsequent slowdown in those economies has taken a heavy toll on the miners.

Xstrata, 96p lower at 744p, is down 74%, having gained almost 40% in 2007.

Rio Tinto, 105p adrift at 2135p, has lost nearly half its value this year, having almost doubled in 2007. Kazakhmys, off 11p at 228p, is down 81%, and Lonmin, 28p cheaper at 1134p, has lost 61%.

Oil companies have also taken a beating.

BP, 31?p lower at 433?p, has fallen 28% with BG Group, 69p lighter at 705p, down 33%. The subprime crisis has left Royal Bank of Scotland, 5.8p easier at 61.2p, diving by 90%.

Among retailers, Marks & Spencer, off 10?p at 211?p, has lost 60% of its value while J Sainsbury, 5?p softer at 249p, is down 41%.

Meanwhile, investors were again running for cover today as any lingering hopes of a bear-market rally went up in smoke following publication of GDP figures. …

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