Are you Planning on Purchasing UK shares?

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Shadrach   in Stocks & Shares

Last updated: 08 January 2020, 04:22 GMT


 

The continuing uncertainty means investors of almost every stripe remain cautious about buying UK equities 

Some overseas buyers of UK-quoted companies have not lost their appetite. Overseas private equity (PE) or PE-backed buyers are particularly hungry. These are investors who target private companies.

Such deals have contributed to a sharp pick-up in announced UK PE activity, which is now at 10-year relative highs. In addition, we’ve seen overseas companies bid for mass media group Entertainment One as well as the London Stock Exchange and food delivery platform Just Eat.

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So, what is driving this interest when other investors in UK publically-quoted shares remain highly circumspect?

UK shares could be at an important juncture

This overseas corporate and PE interest is further evidence of the opportunity offered by UK shares. It comes at a time when they are trading at a 30 per cent valuation discount to global peers, close to a 30-year low.

While UK shares look compelling, many investors crave certainty in order to back them. Such certainty is unlikely until we know the shape of the next government, and a path towards resolving Brexit becomes clear.

At what could be an important juncture, we suggest investors carefully review their UK exposures.