Investors give thumbs up to British assets

Chris Papadopoullos
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JUNE saw the largest climb in investor sentiment toward UK shares for over two years, according to one of Britain’s biggest banks.

Net sentiment toward UK shares hit 40.2 per cent in June, up from 26.3 per cent in May, figures released today by Lloyds Bank show.

Net sentiment is the difference between the percentage of investors who hold a positive outlook for an asset over the next six months, and those that hold a negative one.

Investors were also more upbeat about UK corporate bonds – which are interest-paying IOUs from companies – government bonds, and property than they were in May.

“Sentiment towards sterling dominated asset classes has shown a noticeable and significant reversal this month, with UK shares recording their highest ever increase. Sentiment for UK property is also within touching distance of its all time high reached back in May 2014,” said Ashish Misra at Lloyds Bank Private Banking.

“This is likely due to the result of increased political and economic certainty following the General Election in May.”

The rise in sentiment toward British assets contrasts with those in the Eurozone, where net sentiment toward shares dropped to minus 29.3 per cent in June from May’s minus 23 per cent.

It also below June 2014’s 19.6 per cent.

Investors are also looking more positively on stocks in the US. Net sentiment for US shares grew to 16.4 per cent in June, up from May’s 14.7 per cent.

Greater positivity was also seen in emerging markets, despite economic turbulence in Russia, China, Brazil and Turkey, four major emerging market economies.

Emerging market shares saw a rise in net sentiment to 20 per cent from May’s 16.2 per cent. It also up compared with the same month last year when it was 17.5 per cent.