Selloff or Market Correction? Either Way, Here's What to Do NextSee Overvalued Stocks

Deutsche Bank joins growing swell of optimism for UK stocks

Published 23/04/2018, 13:50
© Reuters. The logo of Deutsche Bank is seen at its headquarters ahead of the bank's annual general meeting in Frankfurt
UK100
-
DBKGn
-
STOXXE
-

LONDON (Reuters) - Deutsche Bank (DE:DBKGn) joined a growing chorus of brokers becoming more positive on British stocks on Monday, upgrading its recommendation on UK equities to "overweight", citing cheap valuations and a predicted boost from a weaker pound.

"The UK is the cheapest country on our sector valuation scorecard," said Deutsche Bank's European equity strategy team in a note.

Concerns that Brexit would undermine the UK economy and the pound had discouraged a number of foreign investors from buying shares in British companies after the June 2016 vote.

The UK's defensive characteristics - with a heavy weighting in high dividend-yielding sectors - mean it tends to outperform in times when euro zone Purchasing Managers' Index (PMI) momentum, a gauge of economic health, is negative, the strategists said.

The German bank's move followed Citi which went overweight on UK stocks on April 5, while UBS Wealth Management closed its underweight recommendation on the market, moving it up to "neutral".

Britain's blue chip FTSE (FTSE) index is down 4.2 percent since the beginning of the year while the Euro zone STOXXE (STOXXE) is up 0.5 percent.

Deutsche Bank strategists in the same note downgraded Spanish equities from overweight to benchmark, saying the market would suffer from the Euro zone's negative economic growth momentum.

© Reuters. The logo of Deutsche Bank is seen at its headquarters ahead of the bank's annual general meeting in Frankfurt

The German bank remained underweight Italian, German and French equities, while it kept an overweight recommendation on Switzerland.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.