Morley says equity market fall will create attractive opportunities

Article date: 27 July 2007

Morley believes that equity markets are likely to fall further in the near-term but this is not the start of a bear market. Despite significant weakness in the US housing market the US economy does not appear to be heading for recession. Profit growth has moderated but is still positive, profit margins remain high and corporate balance sheets continue to be strong. These factors should sustain investment spending and activity in the wider economy, especially if the US Federal Reserve were to cut rates. On the debt markets government bonds are likely to benefit as interest rate expectations change in response to central banks switching out of hiking mode.

Froth taken out of equity markets

Global equity markets tumbled on Thursday as investors' fears of an end to the leveraged buy-out boom sparked a sell-off. In the US the Dow Jones Industrial Average was down 2.3% and European indices followed suit with the FTSE 100 down 3.2%, its biggest one day slide for four years, and the FTSE Eurofirst 300 Index was 2.8% lower. The sell-off was also underpinned by investor anxiousness after weak housing numbers in the US that came in lower-than-expected and rising oil prices.

Investors flee to government bonds

Government bond yields were significantly lower with 10-year US Treasury bond yields at 4.78% having been at 5.20% earlier in the month as investors sought safety. On the debt markets the financial sector and banks in particular suffered and sentiment in the credit markets was firmly negative.


Source all figures: Bloomberg and Financial Times as at 27/07/07

Any opinions expressed are those of Morley and should not be viewed as a recommendation of any nature.

For more information contact:
Beth Saint - Corporate Communications
Telephone: 020 7809 8125

Notes to editors

  • Morley is the UK-based asset management business of Aviva plc. Firms within the Morley group of companies manage £169bn (€247bn) from offices around the world as at 30 April 2007.  

    Morley manages both institutional and retail funds. It also acts as investment manager for a range of retail investment funds, marketed in the UK under the Norwich Union brand and in Europe under the Morley name.
  • The property team manages in excess of £29bn (€44bn) of UK and European property assets.


  • Morley ranks no.1 fund manager in the Thomson Extel SRI Survey, 2007
  • Property Manager of the Year, UK Pensions Awards 2007
  • Morley's G7 Fund awarded Fixed Income Hedge Fund of the Year, Eurohedge Awards 2007
  • Equity End User of the Year - Derivatives Week DEAL Awards 2006
  • Property Fund Manager of the Year, Pensions Management Awards 2006
  • Best Commitment to Raising Standards of Trustee Education, Engaged Investor Awards 2006
  • Property Fund Manager of the Year, Property Week Awards 2006
  • SRI Provider of the Year, Global Pensions 2006
  • Central European Property Awards 2005 - Outstanding Company of the Year & Investor of the Year
  • UK Pensions Awards 2005 - Property Manager of the Year
  • Property Week Awards 2004 - Best Property Fund Manager

Further information about Morley can be found at

Morley Fund Management Limited

No. 1 Poultry, London EC2R 8EJ

Phone      +44 (0)20 7809 6000

Fax          +44 (0)20 7489 7940




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