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BT Group plc Message Board

  • oedd1159 oedd1159 Dec 30, 2009 2:43 PM Flag

    Am i right??

    moneyweek said ...
    "But the more our spendaholic government splashes out, the more it will have to borrow. And over time, that'll force gilt yields back up again, and pension fund deficits – including BT's - down once more"

    Straitforward conclusions from this

    Rates are at all time low...this means they can only go up in the short ..medium term...and this will lower the liability side of the balance statemment via less obligations for Pensioners ,etc.

    On the other hand i believe the transmision mecanism through wich BT will prosper while other stocks may crumble is this : higher uk inflation -higher yields- higher interest rates- decrease in liabilities obligations- improvement in BT balance sheet -increase in BT valuation.

    Am i right???


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    • your question is absolutely appropiate in the present economic environment ...

      In my opinion ; what made this stock fall to from higher prices present price was basically related to the increase in the pension fund valuation due to the decrease interest rates..
      Should the interest rise i see no reason why this stock cant recover part if not all of pre-financial crise level.

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