As with any high tide, it’s imperative not to get washed up; interesting then that corporates are now taking this opportunity to strengthen through acquisition.
While Unilever’s bid for Kraft Heinz may have ultimately come short, we’ve since seen Standard Life’s purchase of Aberdeen, Tesco swoop on Booker, and Wood Group’s offer for Amec Foster Wheeler.
For Haynes, these are positive signs for equities: “If M&A is happening it means companies believe that valuations are not over inflated, and there was even talk of now of Exxon coming in for BP.
“Weak sterling makes UK companies more attractive and M&A must ultimately support the UK stockmarket.”
Still, Haynes finds it hard to predict the leadership of the FTSE in the months to come: “Last year the market was so narrow with banks, oil and miners driving performance, but this year it has broadened out.
“From a wealth manager perspective, if you take a strong style bias in portfolios, you will only achieve lumpy and volatile performance”.
