Saturday, 26 December 2009

Season's Greetings - Never the Same Old Line

To One and All.

investment-auto-motives prides itself on its hard fought independence to provide objective advisory.

It is an independence which allows it sit centrally, and be triple-facing, toward the arenas of:
- the investment community
- government
- the auto-industry

The investment decision-making process toward either a singular project, an enterprise, a conglomerate or the breadth and depth of the auto-sector itself, requires that investment banks, private equity, trade-buyers and official authorities consider a broad spectrum of issues, levels, conflicting forces and alternative approaches.

The macro-economic investment waters have calmed greatly, the battering storms of 2007/8 subsiding whilst 2009 created a welcome, yet perhaps over-enthusiastic, rebound. 2009 was largely a sentiment driven market: cost-savings, retained liquidity and inferred 'good news' data ruled.

Governments provided QE reprieve. Auto-demand was much massaged. Sector winners & losers availed. Now all investors require insight, to see through the emerging mist created by enthusiastic over-reaction. The speedy turnaround from 'famine to feast' and starvation to over-indulgence can create systemic sickness if the process is not managed with restraint and objectivity by all 3 structural players.

2010 will prove tougher. Quantitative Easing diminished, consumer incentives withdrawn, the need for the banking sector's continued re-capitalisation for health and now the question of sovereign debt stability will continue to create squeezed credit conditions, engender risk-premiums and so marginally raise the cost of capital.

Yet, positively, large swells of liquidity seek safe-haven homes in these still-water times.

The economic mechanism is being largely re-set via the re-balancing of bonds & stocks, assisted by the assistive intermediate hybrid instruments (old and new), to give new growth platforms which in turn will encourage 'early cycle' M&A activity.

In short, the optimism of a still tentative, very slow yet welcome new beginning.

Upon this sentiment, as corporate balance sheets themselves, in time, start to re-gain content over style, far more than 'Good Will' to one and all.

investment-auto-motives... 2010 and onward.

Best Regards