Expert tips stocks in ''Jekyll and Hyde'' market

By MoneyhighStreet Staff. Published on May 29, 2008 This post currently has no comments.

Economy
It is still possible to see good returns when investing in the UK stock market, but people have to be careful, an industry expert has said.

Martin Walker, UK equities fund manager at Invesco Perpetual, stated that the UK markets are currently "displaying Jekyll and Hyde tendencies", making it tricky for investors.

He explained that the markets were "swinging between depression and forced optimism" and that the "major worry for investors is knowing just how steep the economic slowdown will be".

Despite this, Mr Walker noted that the UK equity market index had seen a "good rally" this year. He also tipped a number of companies, including packaging and beverage-can producer Rexam, British Airways and UK Coal.

Commenting on the later, Mr Walker said: "It is an interesting stock. I initially bought into it as a play on property. The company has potentially upwards of £1 billion of residential lands.

"I initially assumed that, at best, the coal business might be value neutral, but with coal prices where they are this business could now be worth upwards of £300 million.

"At the very least it gives them cashflow that will allow them to keep more value in the property deals."

In conclusion, Mr Walker reassured UK investors he did "not see that much downside in the market from here".