The market view on London shares: it hates them

Jul 21, 2023 at 12:14 PM

The banker was lip-wobbling into his beer. (It would have been Château Lafite, however occasions are arduous.)

“The market has taken a firm view,” he mentioned. “It hates us.”

He wasn’t referring to bankers basically – that’s for the broader public – however to buyers’ angle to UK shares.

For ages solice has been taken from the notion that since London stocks are so clearly undervalued, the massive boys would sooner or later realise what an excellent shopping for alternative that represented and the values would right.

Part of this concept was that it was primarily imply foreigners taking such a downbeat view on our prospects. Hah, they’d be sorry.

Once inflation calmed and rates of interest began to go down, equities would absolutely be again in favour, and patriotic Brits who might see that coming could be the clear winners.

This wishful considering takes a bash this morning with news that Legal & General, which at £1.3 trillion is the most important supervisor of property within the Square Mile, is promoting shares and shopping for bonds.

Chief funding officer Sonja Laud tells the FT that L&G is prepping for a “significant” downturn within the UK financial system, with recession inevitable whereas borrowing charges keep excessive.