Doctor at work

Outlook for the global equity market 2012

By Ben Hedenberg
last updated Sunday, February 12, 2012

Opportunities exist despite a dim outlook for the global economy

Despite increasing concerns about the solvency of some of the world’s largest economies, a festering European sovereign debt crisis and slowing global growth, the current risk environment continues to provide opportunities that stand out from the dark outlook. Last year 2011 the winning sectors were those traditionally thought of as "defensive" – utilities, consumer sStaples, and health care are often among the best havens in a weak economy. Will 2012 be the same? There some clues to how the year might develop. Utilities had a big rally in the end of last year. Once the calendar turned, buying interest dried up and the utilities sector fell. Health Care, on the other hand, has shown much steadier recent results. We should expect that health care will continue to outperform. The current period of deleveraging (paying off existing debt on the balance sheet) will lead to weaker economic growth and, resulting to slower growth or contraction in corporate revenues and earnings.

Safety first

The European debt crisis and slowing global growth are poised to be the principal drivers of return in the fixed income markets. Investors will look for high-quality fixed income assets and long-dated debt that feature superior market liquidity. The fundamentals are solid balance sheets, strong liquidity and managements seeking to pay down debt and raise the credit ratings.


Major investment bankers like the long-term outlook for gold. With major central banks engaged in unprecedented and experimental money base expansion, the fixed supply of gold is a relative advantage. With economic growth slowing in the emerging world, food prices and industrial metals may well continue to underperform in 2012.

Changing landscape of venture capital

The way companies are getting financed is changing, from start to finish. There are many new financing options for growing companies that weren't available a decade ago. Crowdfunding and accelerators are helping companies get off the ground. The venture capital it is completely reconfiguring and will help the entrepreneurial companies grow up.
Companies are delaying their IPOs, which has led to a new kind of late-stage venture investing, and the rise of secondary private markets. The trend is that they make their investments in more mature private companies. Therefore these investments have all the upsides of IPOs in terms of capital raising, dilution, control and liquidity, without the downsides of regulatory compliance costs and unwanted transparency. Mega-funds are therefore basically turning into hedge funds. In its turn this has led to the rise of secondary markets. These markets are not very regulated, but are her to stay.The necessity of secondary markets for private company shares is real as companies stay private longer. Some companies may opt to stay private for a longer time, and as the IPO window narrows ever further. Overregulation has certainly played a role, since the compliance costs are unproportionally high. Many entrepreneurs don't want to go public, due to enforced transparency and fear being shoved around by short-term-focused Wall Street.

Venture capital outlook

The outlook for venture capital this year has its bright and dark spots, according to National Venture Capital Assn. president Mark Heesen. VC backing of new life science startups is in decline due to an uncertain regulatory climate, according to Heesen. First-funding deals in the sector fell by nearly 43% last year, to 153 deals from 268 in 2006. More and more companies are setting up their own in-house VC shops. Bryan Pearce and Dr. Martin Haemmig believe that the venture capital model is not fundamentally broken – it continues to be an essential source of funding and a catalyst for the innovation, entrepreneurship, job creation and economic growth needed to lead the world economy into recovery.

Capital Rasied untill 2011

Business Plans
Bank, Angel, Private Investor, Venture Capital, or Institutional

All our business plans include financial projections, cash flow, projected profit and loss, balance sheet and charts.


Time: 7-21 days


Let Us Write Your Company's BusinessPlan - Together we plan for your success

10% OFF Get a Free Quote No Thanks