Jan 15 - Signs the global economy is finally moving up a gear are prompting world share markets to surge, with Germany's DAX hitting an all-time high. But as Ivor Bennett reports, it's a double-edged sword, with fears over capital flows to emerging markets.
Over 7000 points and rising. The last time Egypt's stock exchange hit such heady heights, Hosni Mubarak was still in power. With the country going to the polls to vote on a new constitution, investors are feeling flush. Prompting the biggest index increase in more than three years. Stock trader Naglaa Farrag. SOUNDBITE (Arabic) STOCK TRADER, NAGLAA FARRAG, SAYING: "During the past two sessions before the referendum, investors were worried that the referendum might be disrupted or there may be a lack of security. However, after seeing that the process was stable, investors felt secure about the coming phase and the current available shares." It's a picture repeated in Europe too. The FTSE Eurofirst powering to levels unseen since mid 2008 - and Germany's DAX hitting an all-time high after its biggest rise of the year. The surge comes after the World Bank upgraded its outlook for the global economy - forecasting growth of 3.2 percent this year. Baader Bank's Robert Halver. SOUNDBITE (German) TRADER WITH BAADER BANK, ROBERT HALVER, SAYING: "The future looks brighter, meaning the forecast for the world economy is better than expected. And that is great for German shares, which are having fantasies about exports." As ever though, there are pitfalls. The World Bank again shaving its forecasts for developing countries, down to 5.3 percent. The last two years has seen emerging markets grow at their slowest pace in a decade. With central bank support drying up in advanced economies, there are fears capital flows could contract. Saxo Bank's Nick Beecroft says that's not all. SOUNDBITE (English) NICK BEECROFT, CHAIRMAN & SENIOR MARKET ANALYST, SAXO BANK, SAYING: "My main concern is this rebalancing, especially in China, from export-led growth to consumption. That's a tricky game to play, it's a long game, and the real danger is we'll see a depression on growth more than we expect." Overall though, things are looking up - with even faster global growth predicted for 2015 and 2016.