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Zurich 4 June, 2010. The EURO crisis rolls on. Analysts are taking a stronger position on the effects of the Gulf oil spill on BP and contagion fears from the EURO bond crisis have spread into an unexpected area: corporate bonds. However, except for the real estate sector, China has reversed the negative sentiment of recent months and India and Brazil are slowly consolidating their media reputations in leading business media – India is even challenging China for leadership in terms of visibility. Media Tenor´s long-term study on the influence of cited analysts in the financial press, continues to show a growing positive sentiment towards gold, which runs contrary to overall commodity sentiment, and fears of a gold price bubble.

As journalists look to financial experts for comments on the alternatives to Europe and the U.S., the BRICs are rarely far from the discussion. For the most part of 2009 and 2010 this discussion was largely dominated by China. However, Media Tenor´s analysis of citations from financial analysts shows that India is steadily growing. The study also shows that the economies of both China and Brazil were rated significantly more positive in the first weeks of June, when compared with the yearly average. “India´s dynamism is difficult for journalists to ignore at the moment,” says Media Tenor Research Director Matthias Vollbracht, “and it is the combination of active business abroad and the growth potential being realized that journalists are asking analysts to comment on – India´s reputation is developing from alternative, to a key economic player”. Apart from the BRIC story, June has been notable for the large push for Africa in the FT.

The storyline around contagion fears in European debt markets took an unexpected turn at the beginning of June. Rather than seeing a drop in sentiment toward “core” European bonds, there was a large negative shift in analyst opinion towards corporate debt markets. The narrative in June has especially affected the financial industry. “When we think of contagion, we generally think on the sovereign level, but in this result we can see that there is a large amount of fear at all levels of the European debt markets, excepting perhaps German Bunds”, says Vollbracht. U.S. bond markets, on the other hand, have seen a slightly more positive sentiment in June.

Analysts have finally started to draw conclusions on BP´s future. As may be expected, the company has dominated analyst citations on the FTSE 100 companies so far in June, accompanied by a very large drop in ratings. According to Vollbracht, the political pressure on BP to drop its dividend payments is a clear factor for analysts. “Analysts were rather stand- offish until journalists started wanting to know their opinion on scrapping the dividend – financial observers don´t like to think a company will not pay out.” In a positive development for the FTSE 100, analysts seemed to be happy that Prudential´s Asian adventure has come to an end. The management issues have not affected the rating of the company too much, but the outlook without AIG and Asia is somewhat clearer in the citations.

Finally, gold is also benefitting from the sentiment drop in Europe, and has shaken off bubble fears of recent months. For metals markets in general, this is slightly against the trend, with platinum losing favorability. Copper has mostly dropped off the radar when it comes to analyst citations in June, despite being a hot point of discussion in April and May.

Media Tenor´s financial sentiment tracker will be released weekly at http//www.mediatenor.com. Next week: Johannesburg Stock Exchange, Agricultural commodities, African economies, and the Swiss currency intervention.

This analysis is based on, 63,390 statements by citied analysts in select business media: Financial Times, Les Echos, Expansion,Il Sole 24 ore, WSJ, Barron‘s, Mint, Financial News, Economist, Forbes.

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