The lack of credit for companies has led to more generous shares being offered and increased investments to help them reach their goals, according to one expert.
Kevin Lilley, fund manager at Royal London Asset Management, said that share price performance has been boosted by the peak in credit spreads, which occurred in March.
While it is expected that releasing more equities for investment in order to repay debts will hamper new projects and share price growth, Mr Lilley has found that opposite has happened.
He said: "I believe therefore that we have switched from a vicious cycle to a virtuous cycle, with loosening credit conditions at the heart of improving share price performance .
"This continues to be fed by the current results season which is demonstrating improved cashflows and balance sheet repair."
Cater Allen recently announced its new Capital Guaranteed Defined Return Plan investment product which could lead to returns of up to 37 per cent based on the performance of the FTSE 100 .
Investments helped by tightened credit, expert claims
Investments helped by tightened credit, expert claims
Thu, 30 Jul 2009
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