Credit Suisse equity strategists said on Wednesday they expected sterling, which has been hit by concerns over Brexit, to fall further against the euro, and tipped buying UK stocks with earnings in Europe.
“The house view is GBPEUR 1.16 in 12 months’ time. However, we are slightly more bearish and would now expect GBPEUR to trade down to 1.05 (previously 1.10), having turned bearish on the pair a year ago,” the Credit Suisse equity strategy team said in a research note.
“Thus, continue to buy UK-listed Continental European earnings,” they added.
Among their favoured stocks in this regard were travel group Thomas Cook, telecoms group Vodafone, home improvement retailer Kingfisher and textile services company Berendsen.
They also upgraded UK small caps to “benchmark” from “underweight”.