In a notable shift, the French investment bank, BNP Paribas, is advising its clientele to prioritise investments in the UK, particularly in stocks of companies listed on the UK stock exchange. This move is seen as a reflection of the attractive valuation of the British pound and the potential of the UK’s diverse sectors.

Despite concerns that London’s stock market might lose its prominence due to companies relocating post-Brexit, BNP Paribas’ endorsement could reinforce confidence in London’s stock exchange. Viktor Hjort, the bank’s head of credit research, expressed optimism about the UK’s equity outlook, highlighting the value-driven nature of the FTSE, which boasts a significant presence of energy, materials, and banking sectors.

Furthermore, companies in the UK have been undervalued due to the prevailing pessimistic sentiment post-Brexit. However, this perception is undergoing a transformation. Recent analyses suggest a brighter economic future for the UK compared to the Eurozone. BNP’s chief European economist, Paul Hollingsworth, commented on the evolving sentiment, noting that while there was initial caution around UK assets, the economy has demonstrated resilience and outperformed expectations.

This endorsement from BNP Paribas underscores the potential of the UK’s real estate and development sectors, suggesting a promising horizon for investors looking to capitalize on the UK’s economic landscape.