Outlook For 2003 Is Worsening, Says Merrill Lynch

The overall outlook for 2003 is now worsening, with concern about interest rates and consumer spending and further rationalisation required in the financial markets, according to analysts at Merrill Lynch.

“The rapid decline in stock markets in the last month, World Cup inertia and low activity is likely to trigger a further round of rationalisation among financial institutions.

“This has prompted further cost savings at Reuters, as they batten down the hatches for a period of accelerated decline, which we forecast to now continue into 2003 with a -3% to -4% revenue decline versus a previous 2.7% growth. Equally, DOW Jones has warned about accelerated declines again at the Wall Street Journal and the Financial Times at Pearson is experiencing similar trends,” says the brokers report.

Accordingly, Merrill is looking to scale back its advertising growth forecasts for 2003 from 5% to 2%-3%, ‘due to the more subdued outlook’.

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