Rise in M&A activity makes UK market compelling

UK GROWTH

UK equities advanced in July, outperforming most major global and European peers.

The FTSE All Share index was up by almost 7%, buoyed by stronger-than-expected company earnings and rising M&A activity. The positive sentiment was fuelled by fading European sovereign debt concerns, positive results for UK banks in European stress tests and UK GDP figures that showed growth of 1.1%. UK firms progressed well in the first half of the year. The UK market is now trading at compelling valuation levels. This value opportunity is beginning to manifest itself through a rise in M&A activity. Furthermore, with revenues recovering, the dividend-paying ability of companies has b...