- US Dollar Weakness likely to continue into 2008
- Fortis forcast 1.45 Eur/USD end 2007 and reaching 1.50 by 1st Half 2008
- Some signals from the US Fed could be interpreted as concern about a deteriorating economy
- In Europe indicators universally suggest that growth has peaked
- An interest rate rise is unlikely, however it is equally unlikely that interest rates will fall in the EU until the end of 2008
- US Weakness will harm EU export businesses
- OECD demand likely to disappoint in 2008. Growth will fall below trend as the global economy rebalances, but there will be no recession
- Developing Stockmarkets are offering a premium to investors.
Fortis Investments’ Managing Director and Chief Investment Officer, William De Vijlder, today in Dublin presented his overview of the international financial and investment climate. Fortis Investments is the autonomous global asset management arm of Fortis, one of the world’s largest banking groups. The firm’s sole business is asset management for institutional, retail and private clients and it has €131 billion in assets under management.
William De Vijlder has been Managing Director and Chief Investment Officer of Fortis Investments since 2000. He was previously CIO at Fimagen Belgium, part of Generale Bank, and Chief Investment Strategist, Asset Management at Generale. He is part time Professor of Economics at the University of Ghent in Belgium.
De Vijlder gives regular briefings to institutions and business media in international financial centres such as Brussels, Amsterdam, London and Paris. This is the first occasion on which these briefings have been extended to Dublin. At a presentation in Dublin today he said:
“The decline in the US dollar is expected to continue with an exchange rate of 1.45 €/$ by end 2007 and further weakness to 1.50 €/$ in the first half of 2008. Next year’s Presidential election suggests little US appetite to strengthen the US dollar. Emerging markets are still accruing US dollar reserves at a stupendous rate and this trend shows little signs of stopping. The pressure for US dollar depreciation against Asian and Middle Eastern currencies is also expected to intensify,” De Vijlder said.
“Inflation fears remain. Inflation is expected to remain low and stable in industrial countries, but to increase sharply in developing (BRIC) economies, driven by strong year on year Chinese food inflation of over 18 per cent. The recent Fed action signals concern about the US economy. The downturn in core inflation in the US gave the Fed room to cut rates,” he added
“The ECB, however, is not in the same position. Eurozone activity indicators universally suggest that growth has peaked. The ECB has started to change its view with a less upbeat economic outlook. The medium term outlook has deteriorated leading to a tightening of lending standards and problems in real-estate-driven economies. Due to weaker growth in the course of 2008 a rate cut is possible at the end of next year,” he said.
(SEE Finfacts report: ECB interest rate cuts in early 2008? Good to hope for if you would not be among the thousands of job losers)
Fortis Investments is the investment management company for the Sure Investor series of retail investment funds marketed and distributed by Postbank. The first fund in the series was launched in May 2007, with the second series of the fund launched yesterday and is open for subscriptions until Saturday, November 25th 2007. Postbank is the banking joint venture established by An Post and Fortis, one of Europe’s leading banks.
Welcoming William De Vijlder to Dublin, Margaret Sweeney, Chief Executive of Postbank, said the relationship with Fortis Investments allowed Postbank to offer the highest quality international investment expertise to retail investors in Ireland. “At Postbank, our goal is to offer straightforward products, accessible through our network of participating post offices. With as little as €500 to invest, members of the community can access our Sure Investor series 2 which is managed by Fortis Investments. We are now in our sixth month of operation and we plan to expand our offering of investment products in the future.”
Commenting on De Viljder’s views on international financial markets she said: “The Irish Stock market has suffered more than most due to recent periods of uncertainty. Even retail depositors have been impacted by financial volatilities and uncertainties, the most recent of which was fallout from the sub-prime lending market. Security and trust are at the forefront for most people when entrusting their savings to financial institutions. At Postbank, we have found that there is a renewed concern among the public, one that has attracted savers to bank with us, as we bring banking into an environment that they know and trust through our network of participating post offices.”
“Mr De Viljder's views on international financial markets are of direct relevance to Ireland as we operate in one of the most open economies in the world. In recent times there has been a change of attitude towards Irish economic prospects by international and local investors. In our view, the prospects for the Irish economy remain good. We have demonstrated our resilience as a nation over time. Our ability to respond to changing circumstances is well proven in a variety of sectors. We can be proud of the fact that we have created several world class businesses and that we have developed strong home grown industries. The fundamentals driving the Irish economy are solid.” Sweeney added.
Fortis Investments was founded in 1999 and since then has grown to become one of the Europe’s leading asset management companies. Investment activities are organised into 21 autonomous specialist centres each fully responsible for the management of a single asset class. These centres are located in Amsterdam, Boston, Brussels, Düsseldorf, Frankfurt, Hong Kong, Jakarta, London, Luxembourg, Moscow, New York, Paris, Shanghai, St Petersburg, and Tokyo. Fortis Investments has 988 staff, serves 970 institutional clients and 684 distribution partners (per end June 2007). Fitch has assigned an M2 (“strong”) asset manager rating to Fortis Investments.
The firm is a global asset manager with a reputation for innovative development of new investment solutions and new areas of growth such as China, Russia and Turkey. The firm’s investment philosophy favours an active, bottom-up approach based on systematic in-house research. Fortis Investments has recently launched a China fund and a Russia fund.
Sure Investor Series 2 fund
Postbank today announced the launch of Sure Investor Series 2 fund. The investment fund offers 100 per cent capital guarantee over five years and a potential return of 75 per cent on the performance growth of the fund. Customers can invest in the Sure Investor Series 2 fund with as little as €500 and there is no upper limit on amounts invested. Investments can be made through participating post offices or by contacting the Postbank customer contact centre (LoCall 1890 303040) from yesterday, Monday, October 15th for six weeks until Saturday, November 24th, 2007.
Postbank is the banking joint venture established by An Post and Fortis, one of Europe’s leading banks.
Commenting on the Sure Investor Series 2 fund which launched today, John Donegan, Head of Marketing at Postbank said: “Sure Investor offers customers easier access to the world of investment funds, and the expertise of Fortis Investments. It also aligns with our goal to bring straight-forward products that offer good value to our customers. And with Sure Investor, customers have a product that safeguards their capital while allowing them to benefit from the performance of the stock market.”
Investments in Sure Investor Series 2 are for a five year term at the end of which the investor is guaranteed to get back the full amount originally invested and 75 per cent of the performance growth of the basket of international stocks.* These stocks are held in a variety of industry sectors such as consumer goods, energy, utilities and health care, and include blue-chip companies such as Astellas Pharma, BP, Citigroup, Deutsche Telecom, Nissan Motor and Pfizer Inc. In the event that a market goes down, investors will still receive a minimum return of 2.5 per cent over the five years.
Sure Investor Series 2 will be managed by Fortis Investments, one of the world’s largest investment fund managers with an excellent track record, managing some €19 billion in structured products and more than 370 funds with capital protection.
The costs associated with the product are competitive with a 1.5 per cent annual management charge. The term of the investment is fixed at five years, but provision is made for early redemption in cases of necessity with some penalties. The maturity date is 3rd December 2012.
*Investments may fall as well as rise in value.
