UK equities could return 30% in 2011

Revera's Glen Nimmo says next year is likely to be one of steady share price appreciation as strong cash flows passed back to shareholders are reinvested into the market.

The UK market is generally considered to be cheap; even with the recent rise in bond yields, the forecast UK market dividend yield for 2011 is higher than the yield on the 10 year benchmark gilt. And this is before considering the long term damage inflation will do to fixed income returns.  Based on PE ratios, the market sits well below its long term average.  This we know – and everyone knows it.  So it is difficult to identify what is going to be the surprise catalyst that turns the UK from a market that the majority eschews to one that attracts increased weightings from the industr...