Is the current strength in the performance of the FTSE100 Index almost disregarding potential political turmoil over the next few months?
I now ask – just how long will it take for the FTSE100 to break the 10,000 level?
Not Laughing Now
Way back in early February I wrote in these columns that the Index, then 7,644 was heading for 8,000 and even higher.
That brought forward a mass of guffaws about my comments, with several observers stating their incredulity that I could be so bold.
Up 15% Since October
Now having watched the Index having moved some 15% higher from the beginning of October last year – I suggest that the market’s omens are clearly pointing out that a strong move up towards the 10,000 level is more than possible.
The market is taking a quite positive view about better and more hopeful signs of business confidence, despite the continuing interest rate pressures.
The FTSE100 Index
Established on January 3, 1984, the FTSE 100 Index represents the largest and most tradeable companies listed on the London Stock Exchange.
Soon after its launch the index became the most quoted on radio and television news and the defacto gauge of the health of the UK stock market.
It comprises the 100 most highly capitalised blue-chip companies listed on London Stock Exchange.
Not Just UK But Overseas Too
While the FTSE 100 includes many UK-based companies, it also features several overseas-based companies that have significant global operations.
These international companies benefit from diverse revenue streams and exposure to various markets, with some 70% being generated overseas.
So perhaps the FTSE100 is also a significant signal of overseas confidence too.
Internationally our market is still considered to be fairly lowly valued in comparison to other leading markets.
Undervalued Constituents
The attractions of the ‘undervalue’ of UK-based groups has been clearly shown by the recent $43bn takeover bid for FTSE100 constituent Anglo American – the first approach has been rejected and the market is now waiting for a second bid to be boosted with cash.
Our market is cheap, our indices are destined to rise and despite imminent Elections in both the UK and the US.
It may seem to be inevitable and I am not laying out a timeframe for its achievement.
Without the use of my crystal ball – I am now forecasting a rise in the FTSE100 Index from Monday night’s close of 8,414.99 to 10,000.