Broker report: February

Finance | Fri 17 Feb | Author – Business & Finance Degiro office

Paul Laverty, head of Business Development at DEGIRO Ireland discusses the major market stories for February.


FTSE HIGH
British stocks are at an all-time high. With the pound weakened since last summer’s Brexit referendum, Euro investors are finding it more attractive to invest in UK companies.

After a historic run throughout the first few weeks of 2017, the FTSE 100 index has hit a record high boosted by strong performance by the building and pharmaceutical sectors. FTSE 250 stocks, the index more representative of UK firms than the international heavy blue chip counterpart, has also showed strong growth early in the year.

US PHARMA
US stocks have been performing well since November’s election but recent talks of proposed patriotism policies have made investors weary.

One industry hit the hardest is healthcare. While analysts had originally predicted that Trump’s victory would be good for the pharmaceutical industry – drug stocks initially jumped following the election result – the hard-lined stance Trump has now been taking against drug manufacturers has dampened investor spirits.

Recent comments that drug companies “are getting away with murder” at a press conference leading up to Trump’s inauguration have sent drug stocks down, causing the sharpest drop off for the sector since October.

TRACKER TAKEOVER
A recent report by Credit Suisse Group shows that individual shares are no longer the most traded products in markets. Oddly enough, of the 15 most heavily traded American securities in 2016, only three were individual stocks with the remainder being equity based tracker funds.

2016 say ETFs take in a record $400bn to an already thriving $3.8tn industry. Exchange-traded funds have been growing in popularity in recent years and have become an alternative to individual stock picking or expensive actively managed funds for many investors.

Over the past two years, daily trade volume for trackers has grown by 50%. This is compared to only a rise of 7% for individual shares during that time.

Paul Degiro

Paul Laverty, DEGIRO

GAME ON OR GAME OVER?
Japanese video game retailer popular stock with DEGIRO investors, Nintendo, has had a bumpy few months.

After the success of last summer’s hit Pokémon Go, Nintendo started off 2017 with the release Mario Run, the firm’s second foray into mobile gaming.

A high price point of $10 for the full game held the game back despite a record 2.8 million downloads within the first 24 hours of release.

After recent announcement that the firm’s next home console, the Nintendo Switch, is to be priced higher than analysts were expecting, Nintendo share prices dropped nearly 6%. 

ABOUT DEGIRO

Offering fees 95% lower than competitors, DEGIRO clients trade with the lowest share dealing costs in Ireland. With low transaction costs, no minimums, and no annual or custodian charges, we don’t consider DEGIRO to be the cheaper alternative to investing so much as we see our competitors being needlessly expensive.

Clients of DEGIRO have access to over 60 markets across the world, can trade 700 ETFs commission free, and now have free real time price feeds to US stocks.

Originally from The Netherlands, DEGIRO started as an institutional broker in 2008 and began offering services to retail clients in 2013.

DEGIRO is now one of the ten largest broker in Europe and has won broker awards from the Financial Times and Investors Chronicle (UK), Beleggers Belangen (Netherlands), Investir (France), and Handelsblatt (Germany).

The information above does not constitute a public offer or a solicitation to purchase any securities or financial instruments. Any investment decision regarding financial instruments should be based on individual, professional advice and a prospectus published by an authorised body. In creating this analysis DeGiro is not doing so as an investment adviser or due to some duty conferred by law. The information has been provided with due care and attention but DeGiro is not liable for the correctness / completeness of exchange data and economic information, exchange rates, or general market data. This information and opinion is representative of the time of publish and does not project future performance.