FTSE100 rally driven by hunt for yield, Is Deutsche Bank too big to fail? – Panmure Gordon [Video]
|FTSE100 is trading above 7000 levels at a time when Pound is at 31-year low, while Deutsche Bank is in a mess and the banking sector in Europe is under fire.
David Buik, Senior Market Commentator for Panmure Gordon believes the major part of the rally in the UK's mining heavy FTSE100 index represents hunt for yield... meaning investors have little option other than equities given the low/negative rates on other assets. He does acknowledge that part of the rally is also due to weak GBP boosting earnings of FTSE100 constituents.
Meanwhile, Deutsche Bank rekindled memories of ‘too big to fail' banks across Wall Street. Buik states the back would eventually be saved and the relief rally in shares seen in the last couple of days is soothing but still warrants caution till the government officials do not come out with a supportive statement in favor of the lender. Buik is joined by Tip TV's Zak Mir and Alan Green, CEO of Brand Communications.
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