For many UK stock market investors, 2018 was not a year to celebrate.
Anyway, put a dozen investment experts in a room and you will usually get 12 different opinions.
But, there is a little more agreement than usual. Nearly everyone is saying, based on most circulated stock market predictions, that this year is going to be a difficult one for investors.
Brexit puts a dark cloud over experts' UK stock market predictions for 2019.
Many of whom have failed to predict the obvious consequence of Brexit. Leaving the union was and is bound to change UK’s position on unified EU markets, primarily through duties on the UK produced goods and services which will be in greater or lesser degree implemented, depending on the final agreement. By disregarding simple economic and political realities, stock market predictions have failed to present the real impact of Brexit to investors.
UK markets are due to a rally after this year’s sell-off, the FTSE 100 in particular.
The lack of appetite for UK assets is noticeable. In the UK stock markets are dominated by international companies. They make most of their money overseas. For the savvy investor, it means there is real value to be made.
If the pound really collapses, the UK’s foreign currency earning stocks could start to look absurdly cheap.
Many experts are willing to see IAG as great UK potential. IAG is the owner of British Airways, Aer Lingus and Iberia. The FTSE 100 company has paid out pretty hefty dividends in recent years. It is nearly cheap at the moment. There are concerns that a potential no-deal Brexit could wreak havoc on air travel in the UK. But chief executive Willie Walsh still has positive predictions. He believes the company will not be damaged by disruption to flying rights. His opinion is based on oil prices forecast to drop over the next year, making the fuel costs more manageable too.
One of the stock market predictions claims that this year will not be an excellent year for global stock markets.
But the UK stock markets have the nature of the beast: stock market upswings are bumpy.
The UK stock market predictions show that the UK economy continues to stumble along. Clearly, Brexit is the big shock factor when we speak about the stock market predictions.
This year will be challenging for investors, that's for sure. Uncertainty is driven by slowing global growth, with Brexit and with the uncertain pace of interest rate rises. That kind of stock market predictions is fulfilled.
The UK has a strong connection to European markets and vice versa. If Brexit causes the UK to lose access to the single market, it could cause capital inflows to reverse. The existing stock of assets and liabilities are very large. In other words, this has a huge impact on markets in a confused plot.
One of the most important stock market predictions is knocking on the door.
A Brexit scenario is likely to cause sterling to fall further.
We are all witnesses to that.
One more thing is obvious in the UK stock market predictions. Almost all financial experts claim that the outlook for UK equities is mixed under Brexit.
Credits could have wider spreads. The investors demand a higher premium against the risk of lower growth and higher default risk. Meanwhile, gilts (Gilt-edged securities are bonds issued by the UK Government) are likely to see higher domestic demand from tax-haven inflow.
Those stock market predictions are fulfilled.
The uncertainty has been reflected across the discounts of commercial property trusts, which have gone from trading on premiums a year or so ago, to trading on an average discount of close to 5% now.
Many stock market predictions consider dividend-friendly UK businesses are good homes for investors who are happy to wait for the stock market to bounce back.
FTSE 100 set to yield 5% in 2019.
Dividends paid by UK companies should break the £100 billion mark in 2019. The stock market predictions say 4.8% yield could be the highest since the financial crisis of 2008.
The yield on UK shares has in January reached near a decade-long high, according to research by Link Asset Services.
Some analysis of the blue-chip FTSE 100 index, which lost 8.7% in value last year, is predicting yield over 5% this year. The mid-cap FTSE 250, meanwhile, which was down 13% in 2018, will pay 3.3%.
The average yield of 4.8% on UK shares is the highest figure seen since March 2009, the low point of the global financial crisis. This compares to a 30-year average yield of 3.5%.
For the 17 firms analyzed in the above-mentioned research shows that three are undervalued.