From Morningstar: 2024-10-09 05:13:00

The FTSE 100 has remained resilient in 2024 despite uncertainty, largely due to increased M&A activity. Clive Beagles of JO Hambro Capital Management discusses the implications of ongoing takeovers on UK equity markets. He believes the pace of takeovers will slow as valuations adjust, preventing the market from dwindling.

Beagles suggests legislative action may be needed to make the UK a more attractive place to list companies. He also highlights the low domestic allocation to UK equities and predicts a potential mandate to increase these allocations in tax-advantaged wrappers. This could benefit the country and stimulate investment in domestic markets.

Despite ongoing uncertainties, Beagles believes the FTSE 100 could reach record highs by the end of the year, with more potential upside in the small cap and 250 indices. He dismisses the idea that investors are overly reliant on M&A for portfolio growth, noting that constant outflows have slowed in the UK.

Looking ahead to next year, Beagles anticipates a shift towards value stocks, including UK dividend-paying stocks. As interest rates adjust and a more balanced environment emerges, he suggests investors consider a more balanced approach to investing.



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