Bonds fall out of favour as equities gain

By midweek, the mini bull run was in full flow as encouraging news from retailer Next was supported by better than expected unemployment numbers.

Chris Bradshaw
shareprices.com - Wednesday, September 16, 2009

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This followed market soothing comments from both sides of the Atlantic on the state of the economy uttered by Messrs King of the Bank of England and Bernanke of the US Federal Reserve.

As shares prices gained in most major markets, investors shunned bond issues which have been popular throughout the recession as a safe haven investment. Interbank rates fell to record lows as central governments continued to pour money into the markets to help with liquidity. The cautious economic outlook, however, does nothing to improve confidence between banks and lending between them remains weak.

Shares in pig and bull semen company Genus rose after being tipped by The Daily Telegraph on Wednesday. They cited the unstoppable growth in the demand for food and the recovery of the US dairy market as reasons to buy the stock.

The battle for the takeover of the London Stock Exchange entered a new round after rumours that Deutsche Boerse was interested in the company.

Further oil finds, this time off the coast of Sierra Leone, helped Tullow Oil shares rise strongly in mid week. The find comes on the heels of the BP and Shell oil and gas finds last week and could herald the opening of a 1,100 kilometre wide channel capable of producing many billions of barrels of oil. Tullow Oil is one of a number of companies that will benefit as part of a consortium led by US company Anadarko.

 

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