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Esure and Countrywide flotations enjoy stock market boom Esure and Countrywide flotations enjoy stock market boom
(6 months later)
Esure and Countrywide this week became the latest companies to take advantage of a booming stock market and launch their flotations.Esure and Countrywide this week became the latest companies to take advantage of a booming stock market and launch their flotations.
Despite the continuing eurozone crisis, not least the financial drama now playing out in Cyprus, and the uncertain political situation in Italy, investors have seen share prices soar so far this year. The FTSE 100 has climbed nearly 9% since the end of December while in the US, the Dow Jones industrial average recently hit a record high. The main reason for the market strength can be summed up in two words: central banks. The Bank of England, the European Central Bank and the US Federal Reserve have all put in place bond-buying programmes to help boost the global economy, while in Asia, Japanese and Chinese policymakers have also unveiled stimulus measures.Despite the continuing eurozone crisis, not least the financial drama now playing out in Cyprus, and the uncertain political situation in Italy, investors have seen share prices soar so far this year. The FTSE 100 has climbed nearly 9% since the end of December while in the US, the Dow Jones industrial average recently hit a record high. The main reason for the market strength can be summed up in two words: central banks. The Bank of England, the European Central Bank and the US Federal Reserve have all put in place bond-buying programmes to help boost the global economy, while in Asia, Japanese and Chinese policymakers have also unveiled stimulus measures.
As long as the money taps stay turned on and interest rates and bond yields remain at low levels, equities will provide one of the few prospects for a decent investment return. A more optimistic outlook for the global economy – despite the eurozone crisis – has helped international businesses such as mining groups that populate the UK market. At the same time a weak pound has helped British exporters. Companies have also been building up their own cash reserves, and are starting to use them either for acquisitive expansion or to fund special dividends or share buybacks.As long as the money taps stay turned on and interest rates and bond yields remain at low levels, equities will provide one of the few prospects for a decent investment return. A more optimistic outlook for the global economy – despite the eurozone crisis – has helped international businesses such as mining groups that populate the UK market. At the same time a weak pound has helped British exporters. Companies have also been building up their own cash reserves, and are starting to use them either for acquisitive expansion or to fund special dividends or share buybacks.
So far, nothing has been able to derail the rollercoaster as it heads ever higher. But the thing with rollercoasters is, they tend to come back to earth with a sudden and sickening lurch.So far, nothing has been able to derail the rollercoaster as it heads ever higher. But the thing with rollercoasters is, they tend to come back to earth with a sudden and sickening lurch.
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