FTSE opportunities for long-term investors

published 5 June 2006

Trading volumes in London are far outstripping those seen during the dotcom frenzy, despite share prices still being below their last bull-market peaks. Average monthly turnover in FTSE 100 stocks so far this year has been £187bn, 65% higher those seen in 2000. "Shares are simply being traded more often," explains Tony Tassell in the FT. A greater volume of purchases by hedge funds and other very active investors accounts for up to 50% of market volumes. Increased share buybacks and derivatives-hedging have also contributed. But the presence of many investors with short-term agendas is creating distortions, says fund manager Ed Burke of Invesco Perpetual. This will "present opportunities for investors who take a longer-term perspective".