UK - Pension funds could see their UK equity portfolios rise by up to 15% by the end of the year, leading analysts predict.
JPMorgan Securities says overly gloomy prospects of earnings growth have led to cheap valuations in the UK, Europe and Japan, and overall global equities will rise 10-15% by the end of December.
Its report, The Big Picture, identifies healthcare, utilities and energy as sectors that became undervalued as markets nose-dived over the last three months. It blames these undervaluations on investors selling equities as an asset class rather than discriminating between sectors.
While JPMorgan’s outlook would take the FTSE100 above 5000, Merrill Lynch is predicting a more modest position of 4500 by the end of December.
European equity strategist Khuram Chaudhry said while the bear market may not have fully ended, there were several indicators of a market rally before the year end.
Cash levels at institutional investors have increased from 4.2% in July to 5.8% in August, a reliable sign, he said, that there is scope for investors to reinvest in the market.
He added that in recent weeks the number of buyers in the market has outnumbered sellers.
Many of the buyers are UK company directors, Chaudhry said, generally have a good track record of buying low and selling high.
The secretary of state for work and pensions has told MPs clawback and avoidance measures could be imposed for the people responsible for driving Carillion over the cliff.
Occupational pension provision has continued to grow in value, but there remains large variance in incomes across the pensioner age group, according to latest government data.
Defined benefit (DB) schemes could have an aggregate surplus by 2021 under Pension Protection Fund (PPF) projections, its strategic plan for 2018 to 2021 reveals.
Investment consultants are failing to recommend products that outperform net of fees, the Competition and Markets Authority (CMA) has said as its investigation into the market continues.