Themen:
Insights
17 April 2025
The last few weeks have been some of the most unpredictable for equity markets in living memory, with the world hanging on every social media post from Donald Trump and markets being whipsawed back and forth. Deutsche Numis’ Head of Trading, Simon Gandon, tackles the key questions facing companies and investors.
How does the recent volatility compare with other periods of turbulence?
The 5%-plus intraday movements we have experienced are unlike anything outside other major events, such as the global financial crisis or the covid-19 pandemic.
Many fund managers have been sitting on their hands, understandably wary of investing when fundamental analysis is all but useless. The historic fundamentals of companies are, of course, unchanged, but without a stable environment and with such extreme uncertainty around the terms of international trade, it is challenging, to say the least, to assess future value.
What have been the main concerns and needs of clients?
Our clients have been looking to us to provide reassurance and the capability to manage this scale of volatility. Fortunately, our high-touch traders and sales traders are experts, who have experienced, and successfully navigated, similar crises. That experience, combined with our established relationships in the market and our high-touch service, has proved invaluable.
In these conditions, a key capability we have been able to deliver to clients is access to liquidity, enabling them to continue to execute orders. Even at the height of uncertainty, our high-touch service and the established relationships we have in the market have allowed us to place significant blocks of equity on behalf of clients, without putting
unnecessary pressure on market price.
I would not want to suggest it’s been easy. Our team has been put on their mettle over the last few weeks, but I am pleased to say that Deutsche Numis’ investment in talent and market relationships has proved its worth.
What is the outlook for equity markets?
In the months ahead, the crucial factors that will drive sentiment and allow effective analysis will be whatever trade agreements can be struck. Even the first such deals will serve as an indicator of the direction of travel, and as more deals are agreed, the picture will become progressively clearer.
The actual terms of those deals will matter, but whatever the terms, any trade agreements will at least remove the radical uncertainty that currently prevails and allow companies and investors to make rational assessments of value and opportunity.
Are there any positives to be found in the current state of the market?
The wild swings will undoubtedly have created investment opportunities as some companies will have been oversold. Identifying those opportunities will, however, be difficult until some certainty returns.
In the medium to long term there may also be some positives for the UK equity market. The uncertainty over US policy has prompted a search for safe havens and value. The UK now looks to many investors as one of the more stable global economies and potential investment safe havens. This may lead to a long overdue reappraisal by international investors of the value in UK equities, which following recent falls will be even more apparent.
For the time being, however, the storm of uncertainty remains, and we are on hand to help our clients through.