Fund Management

APCIMS Annual Conference Concentrates on the Big Themes

Contributing Editor, 18 October 2005

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Heavyweight speakers such as Sir John Bond, chairman of HSBC, Ivan Lewis MP, Economic Secretary to the UK Treasury, and John Tiner, chief ex...

Heavyweight speakers such as Sir John Bond, chairman of HSBC, Ivan Lewis MP, Economic Secretary to the UK Treasury, and John Tiner, chief executive of the Financial Services Authority, talked about some of the major themes affecting private client stockbrokers and asset managers at the annual Association of Private Client Investment Managers & Stockbrokers conference held yesterday in London.

Sir John said the financial sector was still dominated by local players, despite globalization pressures, which are more keenly felt in manufacturing. He said most stock markets are geographical in their make up, despite many of the major constituent firms earning their money from around the world.

Stock markets based on industrial sectors, rather than geographical divisions, would appear more logical, said Sir John.

“Twenty-nine stock markets in Europe could be managed efficiently by three,” said Sir John.

The chairman of Europe’s largest bank in terms of market capitalisation saw the financial sector polarizing in 20 years time between a few large global players and firms concentrating purely on their domestic markets. “For those in the middle it will be uncomfortable.”

Other themes discussed were the importance of broadening financial knowledge among the wider public, which was touched on by Mr Tiner and Mr Lewis.

The head of the FSA saw the importance of working closely with the government and industry to ensure a more financial literate UK public.

Mr Lewis said the government was prepared to work closely with APCIMS members on areas of regulatory concern. Although pressed by a question from the floor on stamp duty costs on trading shares in the UK, compared with continental Europe, the government official was unprepared to give an answer.

Chris Gibson-Smith, chairman of the London Stock Exchange, saw the importance of a shareholding democracy, where almost the entire UK adult population had direct or indirect interest in the equity market.

A mature equity market was considered an efficient distributor of capital, Mr Gibson-Smith argued, which was not so apparent in much of continental Europe.

Rachel Lomax, deputy governor of the Bank of England, said inflation expectations in major oil consuming nations have been well-anchored for the best part of a decade but added there is no room for complacency.

“The unfamiliar experience of higher inflation might well dislodge those expectations, if there was any wavering in central banks' perceived commitment to keep inflation low,” said Ms Lomax.

Sir Robert Worcester, chairman of the opinion polling company MORI, who spoke at the afternoon session, predicted David Davies would be the next leader of the Conservative Party.

“But Gordon Brown would be the next prime minister of the country – after being elected through proportional representation in June 2009.”

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