The fog of poor sentiment that has hung over the UK stock market for eight years is dissipating, offering the prospect of a decade of good returns, says Simon Gergel, fund manager of Merchants Trust (MRCH), who returns to Citywire on Tuesday 17 September to deliver a presentation entitled UK Equities: The start of something special.
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Unjustified valuation gap
Gergel believes the relative undervaluation of the UK compared with other stock markets, most notably the US, is not justified by economic fundamentals and ignores the global exposure of London-listed companies.
As the inflation shock passes, real incomes are growing and by the end of the year should be higher than they were in 2019. In addition, Labour’s landslide election win in July promises a period of stability that contrasts favourably with the US and Europe.
History suggests that from the current low valuations, UK equities could…
