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Euro companies will "sink or swim" in battle for credit

Meet the man who says Peugeot will perish by the end of next year as companies either sink or swim in the newly established fight for cheap credit.
December 11, 2012

The battle for the survival of the fittest is getting fiercer among companies in today's hostile economy. That's why backing the right ones has never been so important if you want investment returns, according to Barry Norris, fund manager at Argonaut (http://www.argonautcapital.co.uk/).

At the crux of this new wave of competition is cheap credit. Companies on the stock market are going the same way as countries in the eurozone went when they fell prey to the unforgiving sovereign bond market during the eurozone crisis. While Greece struggles to borrow, Germany is able to borrow huge amounts very cheaply, and so continues to prosper while Greece suffers.

So with banks refusing to lend, access to cheap credit for companies has become an exclusive members-only club. Only a select number of the largest companies, which Mr Norris terms "uncommon" stocks, boast the strongest balance sheets and are therefore able to join.

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