Dividend forecasts up on sterling weakness

The UK equity market made meaningful gains in July with an increase in capital value of

low single digits. This was partly a consequence of a drop in sterling against the dollar

of a similar magnitude. Oil finished the month little changed from the start.

Given the decline in sterling it was to be expected that the forecasts for dividends to be

paid next year edged up a little, largely driven by the large international banks and oil

companies.

Within the market the largest gains came from tobacco and consumer goods

companies. However, house builders and advertising companies recorded significant

declines, probably a reflection of the continuing squeeze on personal finance.

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