A 360° cross-sector view – Not all doom and gloom

Research evidence excerpt

A 360° cross-sector view – Not all doom and gloom

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uncertainty also dampen demand. However, we note the pockets of strength, with allison.sun@bofa.com

financials particularly a winner. Even in sectors more exposed to pressures in the external Arnaud Lehmann >>

environment, it is not all negative, and there are names where we see good opportunities. ResearchMLI (UK) Analyst

+44 20 7995 8302

arnaud.lehmann@bofa.comTop picks: Financials (banks/platforms), sector best in class

Our top picks across sectors have 20% upside on average and relate to three key themes: Xavier Le Mene >>

Research Analyst

1) structural and cyclical strength – banks (BARC, NWG) benefit from higher interest rates, MLI (UK)

a favourable regulatory regime, and high savings rates; trading platforms (AJB, IGG) benefit +44 20 7996 7591

xavier.le_mene@bofa.com

from wider financial participation and government initiatives around retail investment; 2)

Joffrey Bellicha Meller >>

prudence, diversification and product niche within challenged markets (Construction: Research Analyst

MGNS, BBY; Industrials: HILS, FAN, CHG); and 3) K-shaped economy winners (Retail: MKS). MLI (UK) +44 20 7995 7497

Equity Strategy: Overweight UK domestics vs exporters joffrey.bellichameller@bofa.com Jamie Murray >>

As per our European strategy team, UK domestically-exposed stocks have had a tough Research Analyst

twelve months, down more than 20% versus foreign-exposed ones, and the relative trade MLI44 20(UK)7996-3794

has reached all-time lows. In our view, this is not justified by fundamentals as explained jamie.murray3@bofa.com

by FX and relative PMI. We think that UK domestics are pricing an overly aggressive See Team Page for List of Analysts

negative turn in the economy.