The veteran manager of AXA Framlington UK Select Opportunities Fund also expects to see further M&A activity across the market as “in a low growth world, to acquire businesses is one way to increase your revenues and thereby enhance your earnings.”
The FTSE 100 has today breached 7,300 points for the first time in almost a month still, in the medium term, Thomas likened markets to “a washing machine on full spin cycle”, stressing that “time is what is needed to see what really comes out in the wash”.
“We’re living in interesting times, and the widespread geopolitical upheaval witnessed in 2016 looks set to continue as we move through this year,” he added.
“As we look further into 2017, we are constantly on the lookout to see possible repercussions from Brexit, quizzing every company in which we are invested about their long-term investment plans.
“Reassuringly, most of them haven’t changed at all. There may come a time when this changes, depending on whether we see a hard or soft Brexit, but none of the corporations we’ve been talking to have changed their capital investment plans so far.”
Further clouding the “geopolitical limbo” is the upcoming European elections, though Thomas stresses it is important is to remain focused on the fundamentals.
“We have to talk to businesses, look at and assess their plans, help them acquire businesses with capital in order to enhance their total shareholder returns,” he said.
“2016 underlined the fact that politics is in a state of flux and the market has behaved in somewhat unexpected ways.
“Global events that weren’t broadly predicted have had diverse impacts, and even if they had been foreseen, we would probably have been positioned incorrectly against the way the market behaved.”
