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FTSE will surge above 6,500 next year, say experts

As 2012 draws to a close, fund managers and investment analysts tell FE Trustnet where they think the FTSE 100 will be this time next year.

By Alex Paget, Reporter
Friday December 21, 2012


Investors will easily surpass its current levels by this time next year, according to industry experts, with some estimating the index will climb as high as 7,000.

At the time of writing, the FTSE 100 index is at 5,966 points. With this in mind fund managers and investment analysts told FE Trustnet that they think this progress will continue over the next 12 months.

Though all the experts were light-hearted in their forecasts, they say UK equity markets should perform strongly in 2013, with three of the five saying it will surpass 6,500.


FE Alpha Manager Chris Burvill (pictured right), manager of the Henderson Cautious Managed fund

“I’m going to for the FTSE 100 exactly at 6,623 this time next year – it is so specific because I have cleverly worked it out and the conclusion was drawn as a result of complicated mathematical calculations,” he joked.

“In all seriousness, I think we can expect 10 per cent return on equities next year – I think that is reasonable.” 
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“I think the economic outlook could improve in the short term. In Europe, people tend to ignore the underlying positives coming out.”

“Yes, there are problems going on in China and the US, but there are always going to be problems in global markets.”


Mike Jennings (pictured left), manager of Premier Global Alpha Growth

 “The problem with predicting the FTSE at the moment is that markets move about so much, so if you are out a by a week you could get it massively wrong,” he said. 

“I think he FTSE could be near the upper end next year so possibly 6650, because what we have seen is the regular misconception that we are in a very negative environment. The bull case is that we should see a small amount of growth next year.”
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“We will see a continuation of ultra-loose monetary policy on the part of the central banks. Also, corporate margins remain as strong as ever and corporate balance sheets are similarly as strong. This means they can raise earnings at historically cheap levels”

“In terms of asset allocation, I think equities will continue to provide an unnatural home for income investors next year,” he added.


Ross Henderson, manager of EFM OPM UK Equity

“I am going to go for a very bullish prediction – 7,000 this time next year,” he said. “Why not? I think equity markets will continue to gain support from troubles in the fixed income market. “

“There is plenty of cash sitting on the side-lines and I think we can expect some sort of growth next year.”

“So yes I’ll go for it, the FTSE will be at 7000 at the back end of December 2013.”


Tim Cockerill (pictured right), head of collective research at Rowan Dartington

“I think the FTSE will be higher than it is at the moment, but not by a lot,” said a more cautious Cockerill. ALT_TAG

“I would say somewhere between 6300 and 6400. I think in 12 months time we will be closer to having all aspects sorted in the eurozone, and the US should have got to grips with their fiscal issues. Even if they do fall off the fiscal cliff, we will know what the impact of the enforced spending cuts and increased taxes will have.”

“All in all, I think the outlook for next year is quite positive.”

“The FTSE will be slightly up but I don’t think it will race away, because I don’t think equities are particularly cheap at the moment.”

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Richard Troue (pictured right), investment analyst at Hargreaves Lansdown

“I am reasonably optimistic going into next year,” he said. “Although there are certainly risks on the horizon for the stock market, I think we have and will continue to make some progress.”

“With that in mind I think that the FTSE 100 will be a little bit higher, so probably in and around 6350 points.”

“That isn’t an amazingly bullish prediction as there are a number of potential headwinds for markets to deal with. I think investors can expect a pretty up and down 2013, like we have seen this year.” 

“However, obviously there are no guarantees in the market so who knows what will happen.”



 
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Tony Burns Dec 29th, 2012 at 02:43 PM

Meant 6300 for end of 2013!

Reply
Tony Burns Dec 29th, 2012 at 02:41 PM

Well it is ten year's since the FTSE 100 reached these sort of levels so guess it must happen soon. However we need to be carefukl as probably see a much higher market up to end of tax year as money goes into ISA's but then a fall. My view end of 2013 will see us about 5300.

Reply
Tony Burns Dec 29th, 2012 at 02:42 PM

Meant 6300 for end of 2013!

Reply
William Griffith Cirencester Dec 23rd, 2012 at 11:22 AM

It's a more than usually futile game: Us fiscal cliff, post Libor compensation claim effects, bond market implosion, Europe, Iran yo name it. Just get out of bonds and into equities and pray.

Reply
RJACapital Dec 23rd, 2012 at 02:43 AM

I predict the BULL market will commence!!! Moooooooooooo

Reply
roy Dec 22nd, 2012 at 11:28 PM

I predict it will end next year between 5000 and 7000 .....but that assumes average volitility,historic low interest rates and of course continued money printing( oops ..sorry QE ).

Reply
Barcap Dec 22nd, 2012 at 04:25 AM

why not? governments around the world are printing money none stop.. look at the money supply compared to the last time the ftes was 6900.. it should be going up with inflation anyway..

Reply
hurley Dec 21st, 2012 at 05:17 PM

When do fundmanagers ever say they think the indices will fall?

Reply
Derek Dec 21st, 2012 at 04:26 PM

What a waste of a minute of my life, reading some guesses. Why do I bother looking at this website? At least chicken guts make good gravy :)

Reply
Jeremy Wright Dec 21st, 2012 at 02:05 PM

Optomists one and all.

Reply
David H Richardson Dec 21st, 2012 at 01:14 PM

Lets hope they are right

Reply
Peter Radcliffe Dec 21st, 2012 at 10:25 AM

I can predict the courses of the moon, stars and planets but not the madness of men!!
Sir Isaac Newton

Reply
DavidStephen Dec 21st, 2012 at 09:11 AM

Richard Troue investment analyst at Hargreaves Lansdown concludes by saying 'so who knows what will happen'.
Has he just convinced HL that they have no need for an investent analyst?

Reply
valiant Dec 20th, 2012 at 03:53 PM

There is a graph on the Bloomberg website that shows the increase in stock markets and the money printing of world banks. Of course both graphs go in the same direction.
There is a saying in the US which says don't fight the Fed.
At some point though this will all go pear shaped. At what point the Footsie or S&P will be then is anyone's guess.

Reply
John Clark Dec 21st, 2012 at 09:36 AM

If you have £100 to save you can put it into a building society, but if you are managing £100 million you have to put it into a major asset class - bonds, equities or property.

The money has to go somewhere - leaving it on overnight deposit gives a poor return, so its either expensive bonds, expensive commercial property or reasonably priced equities.

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