Europe well placed as global economy starts process of a recovery

European equity markets are currently trading on 12x earnings and remain attractive compared to global equity markets.

Along with Asia, the continental European market is one of the most pro-cyclical of all the large equity markets, with growth and GDP traditionally driven by the big German manufacturers and French consumer goods companies. As the world economy looks likely to emerge from recession, next year we can expect many of these companies to be exposed to a ‘brighter world’. In these circumstances, it will be natural to be positive about Europe because it is a geared play on these themes. One of the key reasons to be positive towards Europe is the relatively low level of leverage present in the e...