Sterling unstirred

26 March2010

What with uncertainty about any recovery, likely government spending cuts and the high levels of government debt, plus almost zero interest rates on many accounts, are all making it difficult for investors to know where they should put their money. Also whilst in Italy this month, I realised how much less my sterling was getting against the Euro (just 3 roses cost me 10 euros).

Ideally the low value of the pounds against dollars and euros would should help the competitive nature of our manufacturing industry. However the reality is we have very little left to export, and those that do as with ICI and others are often 'bought up on the cheap'. Even our food industry imports huge amounts of agricultural products.
It wouldn't surprise me if more US and European companies don't take advantage of the bargains to be had (as with Cadbury's) and gobble up some more of our few remaining British based industries.

To my mind Tate & Lyle at £4.60 look to me to be vulnerable, for over 20 years the shares have languished,
I believe that the company will be either taken over in the next few years or make a resurgence – after all sugar is used in so many foods in the modern world.

Remember as 2008 has shown, shares and other financial assets can go up and down at frightening speed. Don't buy any, unless you know what you are doing and can afford to lose the money.