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2006 Investor Outlook: ‘The Glass Is Half Full’ Says Broadgate Consultants
DALLAS, Jan 7, 2006/ --- Making an optimistic prediction for 2006, Broadgate Consultants, a capital markets research firm says that ‘despite gloom and doom predictions from some corners of the market, investors have a generally positive outlook for economic trends in 2006.’
Basing this statement from a survey of 130 institutional investment professionals, the consensus is that the market is not as bad as it looks, with 85% of the respondents saying that the probability of recession in 2006 is less that 50%, with over 33% of those surveyed rating the likelihood of a recession as ‘almost nil.’
"Cautious optimism seems to mark investors' overall outlook for 2006," commented Thomas C. Franco, Chairman and Chief Executive of Broadgate. "Although sentiments are subdued with regard to certain segments of the economy, on the broad issues, investors seem to feel positive -- and above all, safe."
From the same survey, it was found out that investors have a sanguine outlook towards many key trends:
75% believe that the Dow Jones Industrial Average will rise in 2006
25% deem that the average will increase dramatically – to 12,000 or higher
92% estimate that mergers and acquisitions activity will at least be at par with 2005
72% reckon that the number of IPO will at least keep pace with 2005 levels
66% say that the number will actually increase in 2006
Over two-thirds (68%) of survey respondents expect that 2006 energy prices will remain steady or decrease from their current levels.
Investor sentiment on the real estate market was tempered: 58% of survey participants believed that it will weaken, if only in certain locations, while 17% said that they foresee broad price declines throughout the U.S.
Views on the prospect of near term interest rate reductions were nearly unanimous: only one percent of survey respondents said that the Bernanke Fed's likely first move would be to lower interest rates.
Remarkably, 86% of investors said that the probability of a major terrorist attack on U.S. soil in 2006 is less than 50%, and almost a third of those believe that the likelihood is close to nil. Similarly, a majority of investors believe that the long-term outcome in Iraq will be positive in terms of its effect on U.S. interests.
For more information, please log on: www.broadgate.com
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