R&M: Equity risk premiums have hit credit crunch levels

River & Mercantile's Hugh Sergeant said negative investor sentiment is pushing up equity risk premiums to credit crunch levels despite strong balance sheets among UK companies.

The head of UK equities said valuations are at levels last seen in the first quarter of 2009 and could go lower, creating huge opportunities investors brave enough to ride the volatility. "There are two big concerns for investors - sovereign debt and whether we are heading for a double dip. The result of this is equities are weak and risk premiums are moving up to levels close to the nadir of the market in 2009," said the manager of the £97m UK Long Term Recovery and £158m UK High Alpha funds. "Economies are clearly slowing down and growth is not as strong but I do not think things ar...