Sunday, 5 April 2009

Spring in the Air?

(By Richard Holway 6.00pm 5th Apr 09) On Saturday I registered a few firsts for the year. I needed to find my sunglasses, the pots on the patio needed watering and we had our lunch outside. It was difficult to feel anything but positive.

I’d been reading the Saturday papers with articles about RIM (Blackberry’s) Q4 results with a mega 84% increase in revenues to $3.4b. It caused a 21% bounce in RIM's share price. The bit that made me sit up in the announcement was reports of a “big rebound in consumer demand in mid-Feb”. Obviously I wasn't the only person who felt the need to buy a new Blackberry Bold this year!

There was also encouraging news which included the UK’s manufacturing index declining more slowly than expected and a rise in the Purchasing managers Index. There were even reports of house price rises and the possibility of the BoE having to ‘increase’ interest rates to stop this.

Then we had the G20 with Gordon Brown ‘Saving the World’…again.

It truly was a week of positives. Reflected in a 5% rise in NASDAQ, a 3.4% rise in the FTSE100 and a 5% rise in FTSE UK SCS Index. FTSE UK Mobile was up 7.5%.

So what does it all mean? Are we through the worst? Is everything OK again?

I doubt either! Although I live by the mantra “Hope is not a Strategy” I do subscribe to the mantra ‘Confidence is All”. If enough of the population believe that things will get better – they probably will! It’s Confidence not Cash that makes people spend (or save).

My own view is that I suspect that we might have reached the low point in confidence. Things just might have started to stabilise. But the effects of the last year’s disasters have still to work through in GDP declines, jobs lost, profit warnings, company bankruptcies and personal anguish. But there is a ‘light at the end of the tunnel’ feeling – but the tunnel end is still a year or 18 months away.

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