UK EQUITIES VALUATIONS NOT STRETCHED BUT...

UK EQUITIES VALUATIONS NOT STRETCHED BUT…

The outlook for the UK economy is not bright but the outlook for the UK equities could be bright despite public spending cut because improved corporate earnings and attractive valuations point to low but positive returns over the next twelve months accompanied by greater volatility. The “V “shaped recovery becoming “U” shaped as the impact of stimulus measures fade. But I think the economic recovery will continue albeit slowly and uncertainty over the strength of the recovery will keep UK equity markets volatile. UK commercial property still in a low rate environment and returns will be capped by a lack of lending to this sector. But I still positive about the outlook for UK equities in spite of the risks to the UK macroeconomic environment because more than 70 percent of FTSE 100 revenues are generated overseas so the index remains resilient to the any renewed downturn in the domestic economic outlook. I believe that indices that are set to deliver earnings growth of around between 15 to 20 percent over the next twelve months. I would view these forecasts are achievable. So it could create opportunities for long term investors.  

I favor some of the following stocks.

Amec                               -        1045.00 p

BAT                                 -        2461.00 p

National Grid                     -        582.00 p

Reckitt Benckiser                -        3416.00 p

Renishaw                          -        1212.00 p

An investment that has strong fundamental can never go wrong.