UK Equities Still Hold Attraction to Investors

Negative sentiment surrounding Europe has put some investors off the region, but analysts told CNBC U.K. equities still offer an attractive bet.
Ian Harnett, co-founder of Absolute Strategy Research, told CNBC Asia’s “Squawk Box” that he had recently re-jigged his global portfolios to reflect an underweight position in European equities, but said it was not necessary to dismiss European equities altogether.

“We would say the U.K. market is the best placed in the European spectrum at the current time, you’ve got some interesting value plays there,” said Ian Harnett, co-founder of Absolute Strategy Research.

Harnett was bullish on global equities overall and said he expected 10 to 15 percent gains this year. He argued that as global stocks start to look more expensive, investors will start seeking out value in places like the U.K.

“And if you look at the U.K. you’ve got those value stocks… basic resources that are looking very attractively valued and you’ve also got some nice financial services plays, which is another good way of playing the upside there,” he added.

The U.K.’s primary stock market – the FTSE 100 – has been on a rollercoaster to nowhere this year. Performance has been extremely volatile and stocks are now down around 0.5 percent year to date. Meanwhile performance on the EuroStoxx 50 – the euro zone’s leading blue chip index – has been poor in recent months amid the escalating Ukraine crisis and weak economic data out of Europe. Stocks are down 7 percent since June 10, although they are up 0.5 percent year-to-date.

via CNBC

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