Ongoing uncertainty about a post-Brexit business landscape is creating a subdued market with less willingness to invest in listed companies with a UK focus, despite the FTSE All Share currently offering a dividend yield of around 4.5%, says Laith Khalaf, senior analyst at Hargreaves Lansdown
The UK stock market is pretty unloved right now, and while there are concerns swirling around global markets generally, Brexit uncertainty is uniquely depressing the outlook for the UK economy and those companies plugged into it.
In a sign of how poor sentiment is, since the Brexit vote in June 2016, £10bn has been pulled out of UK equity funds by retail investors, and only four months have recorded positive inflows. What’s more, survey measures of investor confidence have been plumbing record lows in the last couple of months. The UK equity market is out of favour, to say the least.
There are more international sources of concern too. We are leaving behind the age of quantitative easing and are seeing a return towards more normal interest rates. In theory this will make riskier assets less attractive in relative terms and could result in a gradual revaluation of equity markets.
