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Forex Flash: Dividend-rich equities yield effective rate of return in Europe – Goldman Sachs

FXstreet.com (Barcelona) - As the risk premium has started to moderate, the desire to hoard cash on balance sheets should start to decrease. The incentives to either return cash to shareholders or invest in future growth are rising. A number of companies have increased dividends or paid special dividends this year and dividend expectations are rising.

According to the Economics Research Team at Goldman Sachs, “We find that companies that are increasing dividends have performed well. At the same time there is some evidence that companies that are increasing capex (or are direct beneficiaries of this spending) are also outperforming, a marked turnaround from the pattern in 2011. Unlike in the US, buybacks and M&A are much more muted as uses of cash so far in Europe.” Nevertheless, the pattern of improved performance for companies that are being more proactive with their cash is an encouraging trend and one that should continue to support rising shareholder returns.

Forex: EUR/USD retreats to the area of 1.2930

The single currency is intensifying its correction lower after climbing to the boundaries of 1.3000 in the European midday. At the same time, pessimism surrounding the euro remains intact, as the situation in Cyprus is far from solved...
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Wall Street closes lower on Cyprus concerns

The US stocks market has finished Monday with losses as investors was concerned by the news about Cyprus bailout and levy. Financials, and specially banks, has pressured down the indexes.
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