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MARKET BULLETIN 4 April 2014

This Market Bulletin has been produced in association with BNY Mellon. Its intended to provide you with a look back at the events that have affected the performance of global equity markets in the last fortnight. This is a general market update and should not be considered a comprehensive or sufficient basis for making decisions.

CURRENT VALUE

10 DAY % CHANGE

FTSE 100 Dow Jones Nikkei 225

6,695 16,526 15,063

+2.10% +1.37% +5.78%

Weekly Statistics (source: FT) Key performance indicators (as at Friday 4 April 16:34 GMT)

Day-by-day analysis of FTSE 100 Index

Markets were dominated by tensions between Russia and Ukraine, which went from being a local dispute to broad international tension. The fast moving events culminated with Russia taking over the Crimea region, leading to sanctions being placed on members of the Russian government by the US. Some European countries such as Germany were more reluctant to engage in sanctioning Russia. Russia remains continental Europes main source of gas, and it was feared President Putin would use this to his advantage. Indeed, state energy firm Gazprom first increased gas exports by 44% starting 01 April, then by 26%, and demanded Ukraine pay $2.2bn in debt. The wider effects of the tension include a tumbling Russian stock market, which has fallen around 18% so far in 2014, while anecdotal evidence suggests fund managers are not as keen on investing in the country resulting from the crisis. Meanwhile, Chinese data has been giving markets some cause for concern because of the countrys high levels of debt. The US Federal Reserve said the freakishly cold winter experienced in the country which saw negative temperatures recorded across nearly all states may have impacted short-term growth. According to the information released by US Department of Labor on 4 April, the US economy created 192,000 jobs in March 2014, and the unemployment rate remained static at 6.7 per cent.

A landmark European law was initiated to ensure net neutrality consistent internet speeds regardless of what a user is doing on line. This has implications for investors in technology and telecoms companies. Telecoms companies, who typically pay for internet infrastructure costs, are losing income as free internet companies have innovated with free web-based technologies for users. Speaking recently at the BNY Mellon Global Investment Conference, on the 25th anniversary of the founding of the web, Sir Tim Berners-Lee, the British computer scientist who invented the World Wide Web in the late 1980s, said: In the countries where the web is open and neutral, innovation will be led by companies boasting a spirit that enables experiment and failure. Innovation will be achieved by all kinds of people, in companies big and small, and in university labs, so long as they have time to pursue an interesting idea without the demands of an immediate and demonstrable return on investment. History suggests that the larger a company is, the harder it is for it to undergo a paradigm shift (a change in the basic assumptions). Bill Gates managed, after several years of lag, to change the direction of Microsoft and respect the internet rather than treat it as something foreign. It seems the need for people within an organisation to protect the ideas with which they are associated can be a threat to innovation, especially innovation which requires a change of framework when it comes to reference and vocabulary.

Pia Financial Solutions is an appointed representative of Openwork Limited, which is authorised and regulated by the Financial Conduct Authority. The content of this bulletin, including the figures, is amalgamated from various sources and represent a snapshot of the market. Stock market and currency movements mean the value of your investment can go down as well as up and you may not get back the orginal amount invested. Past performance is not a guide to future performance.

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