By Daniel Hunter
In the run up to Christmas, investors were banking on consumers to eat, drink, and spend money during the festive season, as they highlighted food & leisure as the sectors expected to perform the strongest over Christmas period and the New Year sales.
The latest Halifax Share Dealing Market Tracker reports the majority of investors were anticipating a strong end to the year for food and leisure (54.5%) — which includes the supermarket and drinks industries — well ahead of both retail (44.5%) and technology (39.7%).
Data from the British Retail Consortium bears these predictions out as its figures show UK retail sales values were up just 0.3% on a like-for-like basis from December 2011i.
“Some retailers — especially online — have reported strong figures over the festive period, but it has been a mixed bag and investors believe the biggest winners will be the food and leisure industry," Damian Stansfield, Halifax Share Dealing, commented.
"Consumer services and consumer and retail products are popular sectors for investors around Christmas, but this year investors thought they would be topped by the performance of food and leisure."
Seasonal factors may also explain why energy and mining stocks slipped off the top spot as the most popular holding for investors in the run up to Christmas. This meant financial services ended the year as the top holding among investors, with more than two-thirds (67.9%) of investors invested in here in December.
Looking at the top two key areas for investors over the next six months, these two sectors are expected to continue to dominate portfolios, with 52.6% of investors planning to invest in energy and mining and 50.7% looking to invest in financial services.
Factors such as rising wholesale energy and network costs have been cited by the main fuel companies in the UK who have now announced rate rises for 2013. And many banking institutions saw a strong start to 2013 for their stock prices, following the announcement to push back the requirement to demonstrate the new liquidity coverage ratio until 2019.
Nevertheless, investors are not getting carried away and while 39.2% of investors see an increase in the value of the FTSE in the next six months, 42.6% see a flat market. However, over the course of 2013 the overall trend is optimistic, with a clear majority (58.4%) expecting the FTSE to end the year higher than at the end of 2012.
"Generally speaking, 2012 was a good year for investors; with nearly two thirds saying they have seen the value of their portfolio rise over the last six months," Stansfield added.
"But despite the avoidance of the fiscal cliff in the US at the start of the year, which caused a knock-on effect on global markets and saw the FTSE climb above 6,000 for the first time since 2011, investors are not getting carried away with the outlook for 2013."
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