Why insights matter more than ever in volatile UK markets

Against a backdrop of fast-moving geopolitical change, Nick Stockman, Co-Head of European Equity Sales, Deutsche Numis, shares his thoughts and how his team are helping clients navigate challenging market conditions.

The UK market has not been immune to the huge amount of volatility that has been seen across global markets over recent months. The unpredictable behaviour of US president Donald Trump – whether on tariffs, the Russia-Ukraine war or domestic policies – has translated into global market uncertainty in the form of a ‘decision hiatus’, with companies delaying decisions on long-term actions and investors attempting to navigate the short-term repercussions.

Arguably the volatility seen in the UK market has been amplified by the ongoing outflows from UK-focused funds, which have been a persistent overhang for the last number of years as the UK has struggled with political instability and economic uncertainty.

However, with a new government in place and what appears to be an active rotation from US equities into European equities more broadly, there does appear to be some positive sentiment building towards the UK. Whilst there is still work to be done in terms of rebuilding confidence in the UK market, it is clear speaking to both domestic and international investors that they are becoming increasingly aware of the breadth of attractively-valued companies listed in the UK.

Helping in volatile markets

In these periods of market volatility, investors need more support than ever given the speed at which the backdrop is evolving. At Deutsche Numis, the sales desk acts as an information conduit, providing investors with real-time insights to ensure they have the necessary material to navigate the challenging markets and take advantage of emerging opportunities.

We are extremely fortunate to have great access to company management, which allows the sales desk to hear first-hand how companies are navigating market challenges. Not only are we then able to quickly communicate to our investor clients what different companies are saying, but we are also able to extrapolate how the trends one company is seeing could potentially impact other companies in the same sector or even in adjacent sectors.

Given the speed at which the market is moving, understanding trends, company or sector-specific factors and flows can sometimes mean the difference between capitalising on an opportunity or missing it entirely.

We ensure that our clients are connected to our highly regarded research analysts, who provide investors with in-depth sector and company analysis as well as investment ideas. Alongside this, we work closely with our sales-trading and trading desks to provide market intelligence to ensure investors are well informed, as the market volatility can weigh on liquidity.

These timely insights can help investors cut through noise, providing clarity as well as, in some cases, highlighting short-term trading opportunities. Given the speed at which the market is moving, understanding trends, company or sector-specific factors and flows can sometimes mean the difference between capitalising on an opportunity or missing it entirely.

As the UK market faces ongoing turbulence, those with the best insights will be positioned to make high conviction decisions. We will continue to support all our clients as they navigate the volatile backdrop.