Heady headlines power overseas players’ gains - City Comment
16 May 2013
It’s been a heady week for press headlines, equity markets and global economic recovery. ‘Wall Street stocks powered to fresh record peaks as economic doubts fade’ - ‘Euro-Area Recession Extends to Record as Germany Cools’ - ‘UK growth forecast raised as recovery is in sight’.
Thu, 16 May 2013 | By Kean Marden, head of business services equity research, Jefferies International
It’s been a heady week for press headlines, equity markets and global economic recovery. ‘Wall Street stocks powered to fresh record peaks as economic doubts fade’ - ‘Euro-Area Recession Extends to Record as Germany Cools’ - ‘UK growth forecast raised as recovery is in sight’.
Personally, we found the last headline, which was prompted by Sir Mervyn King’s declaration that a recovery is now in sight and prediction that economic growth would accelerate to 0.5% in Q2 (equivalent to an annual rate of 2.0%), the least surprising.
After all, only last month we noted that it had been five years since Hays had referred to “good growth” in Yorkshire, Scotland and the Midlands, and almost three years since it claimed “modest sequential growth” in the UK. Perhaps the next Governor of the Bank of England should install a hot line to Hays boss Alistair Cox?
Against this backdrop, the FTSE100 index of leading London-listed shares has soared by 4% over the past two weeks and is now only a whisker away from the pre-credit crisis high (6,732) but remains below the all-time peak (6,930 in late 1999).
Within the recruitment sector, overseas players posted the greatest share price gains with Robert Half, Adecco and Manpower all up 11-12%. The UK leaderboard was headed by Empresaria (+9%). Fallers include Harvey Nash (-6%) and Robert Walters (-4%).
Recent trading updates have largely been limited to Q1 results from Adecco and Randstad. The consistent message from both companies – that European labour markets are starting to bottom out – is a perplexing one for many investors, particularly in the context of triple-dip recession in France and weak economic growth in Germany. Yet Randstad went one step further and noted “some signs of improvement” with its Iberian division reporting revenue growth in March, the first time for almost two years.
Conversely, momentum on the other side of the world may have started to move in the opposite direction. An Australian recruitment agency recently warned of subdued business confidence and price pressure from large customers and in April, a key survey of manufacturing activity fell to a four-year low.
Finally, I would like to add my congratulations to all of you who received awards at the Recruiter Awards for Excellence 2013, sponsored by Eploy, earlier this month, including the team who had ‘celebrated’ to such an extent that even lining up to be photographed seemed to be a struggle.
It’s been a heady week for press headlines, equity markets and global economic recovery. ‘Wall Street stocks powered to fresh record peaks as economic doubts fade’ - ‘Euro-Area Recession Extends to Record as Germany Cools’ - ‘UK growth forecast raised as recovery is in sight’.
Personally, we found the last headline, which was prompted by Sir Mervyn King’s declaration that a recovery is now in sight and prediction that economic growth would accelerate to 0.5% in Q2 (equivalent to an annual rate of 2.0%), the least surprising.
After all, only last month we noted that it had been five years since Hays had referred to “good growth” in Yorkshire, Scotland and the Midlands, and almost three years since it claimed “modest sequential growth” in the UK. Perhaps the next Governor of the Bank of England should install a hot line to Hays boss Alistair Cox?
Against this backdrop, the FTSE100 index of leading London-listed shares has soared by 4% over the past two weeks and is now only a whisker away from the pre-credit crisis high (6,732) but remains below the all-time peak (6,930 in late 1999).
Within the recruitment sector, overseas players posted the greatest share price gains with Robert Half, Adecco and Manpower all up 11-12%. The UK leaderboard was headed by Empresaria (+9%). Fallers include Harvey Nash (-6%) and Robert Walters (-4%).
Recent trading updates have largely been limited to Q1 results from Adecco and Randstad. The consistent message from both companies – that European labour markets are starting to bottom out – is a perplexing one for many investors, particularly in the context of triple-dip recession in France and weak economic growth in Germany. Yet Randstad went one step further and noted “some signs of improvement” with its Iberian division reporting revenue growth in March, the first time for almost two years.
Conversely, momentum on the other side of the world may have started to move in the opposite direction. An Australian recruitment agency recently warned of subdued business confidence and price pressure from large customers and in April, a key survey of manufacturing activity fell to a four-year low.
Finally, I would like to add my congratulations to all of you who received awards at the Recruiter Awards for Excellence 2013, sponsored by Eploy, earlier this month, including the team who had ‘celebrated’ to such an extent that even lining up to be photographed seemed to be a struggle.
- Click to read previous comment from Marden and other recruitment equity specialists on recruiter.co.uk
