- The FTSE 100 was one of the worst-performing major indexes in Europe in September. However, UK investment bank, Barclays, in a research note, said stocks in the UK region were cheap and under owned.
- The UK market is “foreign exchange sensitive” and with the GBP likely to be choppier due to Brexit uncertainty, Barclays predicts the FTSE 100 will improve, which could create opportunities for investors.
- Barclays outlines seven UK stock picks with catalysts in the fourth quarter and two stocks to sell.
- “Our seven OW-rated stocks have an average upside to our PT of 26%; whilst our two UW-rated stocks have an average downside to our PT of -27%,” said Barclays’ equity analyst, Richard Taylor, in the note.
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The FTSE 100, the UK stock index that tracks the biggest 100 companies on the London Stock Exchange, was one of the worst-performing major indexes in Europe in September.
UK assets were hit hard due to a surge in COVID-19 cases in Britain, along with tighter restrictions on movement and renewed concerns over Brexit.
However Barclays, the British investment bank, still sees opportunities within the UK.
Until last month, the bank had an underweight rating on the UK but this has now switched to medium-weight.
In an October 8 research note, the bank acknowledged that the uncertainty of Brexit combined with “waning” fiscal support could leave the UK with slower recovery. However, with the UK being a foreign exchange sensitive market, the pound is likely to be choppier due to uncertainty around Brexit, which could help with the FTSE 100’s poor performance and create opportunities for investors.
“The [UK] region is under owned, cheap