An investment company leader has admitted that predicting the global outlook has become “impossible’ and could impact on decisions around the companies it backs.

Neil Rogan, chair of the Murray Income Trust, said the current geopolitical uncertainty and need for strong leadership is affecting confidence.

He warns that the potential for stock market turmoil poses dangers for the trust’s managers.

“We find ourselves in a scarcely credible era of uncertainty and without strong political, economic or social leadership,” he says in a statement with the trust’s figures to the end of June. The trust invests principally in UK equities.

“Domestic politics, geopolitical tensions and war, inflation, labour shortages, recession, strikes, energy shortages; all these factors have the capacity to heavily affect the outlook for the companies in which we invest.

“Every one of them is impossible to predict with confidence at the moment. So what is the outlook? In truth, we can’t be sure.

“All the issues are fixable but not without strong leadership. That’s the most concerning thing this time around.

“After similar issues in the 1970s, the 1980s saw Margaret Thatcher, Ronald Reagan, Mikhail Gorbachev and, perhaps most importantly, Paul Volcker (chairman of the US Federal Reserve from 1979 to 1987) provide very strong leadership and guide their countries to recovery.

“I’m a naturally optimistic person so I scour the TV news and politics programmes for the world’s new generation of strong leaders which will take us towards recovery. I’m still looking. Full recovery may take a long time. 

“If you think about the headlines we’ve been reading these past six months, it is possible to make a case that much of the bad news is behind us. But note that this is a valuation measure based on the previous 12 months of earnings.

“If corporate earnings are about to tumble, then stock markets could move down in parallel and still give the same valuation. That’s the real danger, so not surprisingly the investment manager is analysing our holdings’ earnings prospects with extra vigilance.

“One of the main reasons behind the investment manager’s quality philosophy is that the companies selected should be sufficiently robust and well managed to withstand turbulent times like these. We have great faith in the investment manager’s long-term investment approach.   

“In theory, it should be a good moment for quality. In reality, we will have to wait and see.”

Total dividends per share at the Trust increased by 4.3% to 36p, the 49th consecutive rise.

It said it “modestly outperformed” in the first and second quarters of the year followed by underperformance during the third and final quarters leading to a negative net asset value per share total return of 4.0% overall.

This compares to a strong 20.6% rise in the prior year. The benchmark FTSE All-Share Index increased by 1.6% over the year.