Tuesday 21 November 2017

Merrion paints downcast eurozone outlook

Aer Lingus
Aer Lingus
John Mulligan

John Mulligan

Aer Lingus, DCC and Total Produce are among the stocks Merrion Stockbrokers believes will provide long-term potential for investors, with European equities offering a "strong value proposition" in 2014.

The Merrion Global Investment Strategy for 2014 doesn't paint an optimistic view of the eurozone, noting that despite a pick-up in Germany, the eurozone as a whole looks set to continue to perform poorly this year. Global economic growth will rise, however, especially as the US performs better.

"We are forecasting an incremental increase in world growth over the next two years, from around 3pc in 2013 to 4pc in 2015," said Merrion.

It is also forecasting that Ireland's unemployment rate will probably fall to 12pc this year. While the domestic economy is still fragile, the improving labour market should be reflected in higher house prices, stronger retail sales and lower mortgage arrears over time, according to Merrion.

DCC is a "highly attractive firm", said Merrion. Merrion believes that the current 3pc dividend yield at Aer Lingus is also attractive.

Merrion is also keen on stocks including UK builders' merchanting group Wolseley, US semiconductor maker Broadcom and CRH rival Heidelberg Cement.

Irish Independent

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