david.fm

- Fear is now leaving the European markets and Europe is still a good buy.
Despite the investor caution and recent downgrade of Greece the emergency package should have a positive impact on the market. I maintain that both the Euro and most European markets have still attractive valuations.

- The acceptance of the 20 Billion BP Escrow Fund should fuel market optimism but by end of the year Oil should be at an higher level than now: supply and demand fundamentals are still in favor of higher prices and, despite the good intentions, alternative energy solutions will take time to implement.

- British Banks risk to lose part of their competitiveness in the market: British Chancellor Osborne is expected to
propose the introduction for a substantial bank levy. This is to be announced next Tuesday during the new budget.
While politically this move it might be very popular and lucrative in the short term such a levy might have a strong effect on British banks competitiveness. This will come to an advantage to other jurisdictions like Switzerland, Singapore and some middle eastern ones like Bahrain.

Traditional retail banks (e.g. Swiss ones) are now well ahead in offering private banking services too. They will probably enjoy an higher degree of competitiveness.

- In the specific case of UBS the Swiss lower house could possibly win with their resolution to introduce an optional referendum. Same referendum will not only delay the provision of 4,450 account details but might have a negative outcome that might put UBS in further danger. This might drive more volatility into the market.

Summary: Positive on European markets and the Euro, positive on Oil and commodities and several interesting sectors in Europe. Banks have to be selected carefully preferably small mid-size banks focused on managing asset AND in jurisdiction where taxes and government intervention will provide an ideal climate to remain competitive (e.g. Swiss Cantonal Banks and Private Banks).