European mutual fund savers pulled €900 million from equity funds in August as fears of war with Iraq added to their gloomy view of stock markets, according to research published yesterday by UBS Warburg. It says nervous investors switched from stocks to money market funds and bonds in August as sentiment about equity investment dived.
In the year to the end of August Europe's savers had put just €6.1 billion in equity mutual funds, 34 per cent below the total for the same period in 2001, data from mutual fund associations around Europe collated by UBS shows. German investors were the most negative pulling €900 million from stock funds in August. Spanish and the Italian funds also saw outflows. British and French investors, however, were net buyers of equities.
The outflow in August was better than July's figures when investors withdrew a net €1.47 billion from stock funds. But there is little sign of a sustained recovery. - (Reuters)
Schering paints grim picture for 2003
Schering-Plough has warned that profits will be significantly below Wall Street's expectations this year and next as the US pharmaceuticals group struggles to make up for losing patent-protection on important drugs.
The group has painted a far grimmer picture for next year than analysts had foreseen. It faces less expensive rival versions this year for Claritin, the allergy drug that is its biggest product with $3 billion sales, and could face an introduction next year of a generic copy of its hepatitis drug. Its profit estimate of $1-$1.15 per share next year is up to 30 per cent below average forecasts. - (Financial Times Service)
New car registrations show 5.3% decline
The number of new cars licensed for the first time was 5.3 per cent lower in August this year than in the same month of 2001. Figures from the Central Statistics Office show that 10,044 new cars were registered in August, compared to 20,609 last year. Licensing numbers for second-hand cars fell further, falling by 21.8 per cent year-on-year to 1,012 and by 20.6 per cent to 8,835 in the year to date.
OECD and Deutsche Bank give warning
Economists monitoring the world economy's fragile health found new grounds for concern yesterday when the OECD, warned on growth and Germany's largest bank spoke of a "mini-recession".
A survey showing growth in the euro zone's vital services sector went into reverse last month added to worries that the global upturn seen earlier this year may prove to have been a weak, transient phenomenon.
The OECD confirmed the bad news with its August leading indicator which pointed to a loss of steam in the world's largest economies in late summer.
The indicator for the US, the world's number one, slid for the second month in a row, by 0.5 points to 118.3. It was down by 0.3 points to 113.1 for the euro zone, with heavy falls for Germany and France, the largest of the bloc's 12 countries.
Germany's largest bank, Deutsche Bank, cut its forecast for German growth this year to just 0.1 per cent from 0.5 per cent previously. - (Reuters)
Cigarette tax
In an article on taxation and cigarette in Thursday's edition, comments attributed to UCD economist Mr David Madden stated the optimum taxation on a packet of cigarettes was 60 to 70 cents. What Mr Madden, in fact, said was that an increase of 60-70 cents on current tax levels could be justified on purely economic grounds.
