Latest news with #riskaversion
Daily Mail
2 days ago
- Business
- Daily Mail
Embrace risk to boost growth, pleads boss of London's struggling AIM junior market
The boss of London's beleaguered junior market, AIM, has said the UK needs to 'embrace' risk to boost economic growth, as it marks its 30th anniversary today. Marcus Stuttard said that over the last decade British investors had become too 'risk-averse', which meant they were less likely to take bets on smaller companies and newer technologies. He told the Mail: 'We all recognise that we need higher [economic] growth rates. 'But in order to generate that we have got to celebrate and back the people who take risks – the entrepreneurs, the founders that start these companies and grow great businesses.' He added that investors needed to recognise that achieving 'much higher returns' from investing also meant the potential for losses. 'We need to accept that and embrace it,' he said. AIM – short for Alternative Investment Market – is a sub-division of the London Stock Exchange (LSE) that was founded in 1995. But it has struggled amid a sharp fall in the number of firms on the market. Some point to disappointing returns. At the same time the wider London market is facing an exodus of firms being taken over or moving their listings overseas. AIM has listing rules which are less strict than those of the LSE's main market. It means smaller companies with less cash can still list on the stock exchange. But after a peak of 1,694 firms on AIM in 2007, the number is now around 650 as the appetite for smaller and higher-risk companies among investors has declined in favour of fast-growing US tech stocks. It was also dealt a blow in October when Chancellor Rachel Reeves announced inheritance tax relief on stocks in firms on the market would be slashed from 100 per cent to 50 per cent from next April – discouraging people from holding shares in smaller companies to save on tax bills. 'You would think a Chancellor who talks often about 'growth mission' and wanting to see increased investment in UK domestic assets would be a full throttle champion of AIM, but this is not the case,' said Jason Hollands, managing director at wealth manager Evelyn Partners. He added that while AIM's anniversary 'might be considered a cause for celebration' – with the market raising £136billion for more than 4,000 companies since its inception – it is now seeing tougher times. Luke Barnett, head of tax advantaged investments at St James's Place, said: 'Recent years have been challenging as it has underperformed the FTSE main market and missed out on the broader market rebound. Despite attractive company valuations, investor appetite has waned.'
Wall Street Journal
16-05-2025
- Business
- Wall Street Journal
Dollar Faces Further Falls as Correlation to Risk Shifts
1336 GMT – The breakdown in the positive correlation between risk aversion and the dollar could lead to further weakness for the currency, Neuberger Berman analysts say. U.S. investors might no longer see the dollar as a safe haven currency or unhedged dollar exposures as a source of diversification, they say. Investors are therefore evaluating whether to partially or fully hedge their exposure to the dollar, they say. Any level of hedging puts downward pressure on the dollar as investors sell dollars and buy currencies of their domicile. 'Non-U.S. investors will have to factor the efficacy of hedging their USD exposure relative to costs and implementation.' The DXY dollar index falls 0.1% to 100.763. ( 0821 GMT – The euro could extend its current gains against the dollar slightly as speculators continue to bet against the U.S. currency, ING analyst Francesco Pesole says in a note. Markets and consensus forecasts seen to be aligning for two further interest-rate cuts by the European Central Bank this year, he says. However, the risks remain skewed towards a weaker dollar. 'We still see $1.120 as a good short-term anchor for the euro, although the bias seems to be for testing $1.130 rather than $1.110 in the short term on the back of lingering dollar strategic selling.' The euro rises 0.2% to $1.1208. (
