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Look for value in the FTSE 250 and IPOs amid general uncertainty says Selftrade

20th January 2017

Investors should look to the FTSE 250 and keep an eye on IPOs this year given broader political, economic and market uncertainty says Mark Taylor, CEO of Selftrade.

He says: “It’s likely waters will remain choppy in 2017. Certainly politically, there will be further uncertainty as Brexit negotiations unfold. Added to this, elections across Europe have the potential to deliver the sorts of tremors we have witnessed, and even come to expect over the last 6 months.

“These changes will certainly impact our finances. We have already been led to expect higher inflation, and as a result increasing costs, and diminishing returns on our savings, particularly if low interest rates remain.

“Despite the uncertainty there are opportunities. For example, we expect fixed income to come back in vogue this year as companies look to raise cash through debt offerings. We expect to see a number of new issues come to market, particularly from small and medium sized companies in the first half of next year. This is a great opportunity for investors who are seeking income or a relative safe haven as an alternative to holding their money in cash or equities.

Taylor is also concerned that larger UK firms may struggle in this environment.

“With analysts warning that larger UK companies will struggle to grow in the current environment, looking to small and medium sized companies in the FTSE 250/350 will be key to seeking greater value. We also expect this may lead to a greater number of IPOs for smaller companies via ICAP, many of which are expected to be available to retail investors. As always, IPOs are a great opportunity for investors to buy in early and see large potential gains on their investment”.

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