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Mithril Asset management - Weekly Bulletin presented by Square Mile Financial Services


Weekly Finance Bulletin 25th of February 2013

Market Roundup:


Activity in markets was mixed for the week, after a very strong start to 2013.

Japan’s Nikkei advanced 1.9% whilst the Shanghai Composite slumped 4.9% and the Hang Seng Index gave up 2.8%. Concerns that policy makers in China might keep home prices controlled with additional tightening measures kept investor sentiment subdued for the week. Efforts from the Chinese central bank to recoup excess liquidity from the money markets signalled their intention to tighten monetary policy for the near term.

European markets ended the week flat. The good news was that banks in the euro zone have prepaid another €5 billion of the three-year loans issued by the European Central Bank in late 2011, reducing the volume of the balance sheet, a broad measure of risk in the single currency zone. Banks can now repay their loans early on a weekly basis. January 30th marked the first day that this was possible and banks repaid €137 billion, in a show of confidence that financial markets are returning to health. The FTSE 100 momentarily flirted above 6400 (a 5 year high) as Bank of England comments suggested willingness to launch more quantitative easing.

The mood was checked as investors took note of euro-zone consumer-confidence data for February showing a softer-than-expected improvement. Upbeat data out of Germany helped lift matters. The Ifo Business Climate index jumped to 107.4 in February, exceeding expectations of a 104.7 reading on Friday.

US markets broke a 2 day losing streak to advance later in the week, influenced by German business data and strong first quarterly revenue from HP lifted indices.



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