Baig expects increased Euro takeover activity

Legal & General head of European equities Alia Baig believes a number of European stocks are in a unique position to see their share price double.
She says: “We have a number of companies that we can make 100% on – you do not get that in many markets.” Baig hints that Ericsson could be one of these.
She also likes German bank Hypo-Vereinsbank: “This is a company that has doubled since the bottom in March 2003, but still looks very cheap.” Baig, who is expecting increased corporate activity in Europe in the coming months, says the bank is an attractive target for a rival bank that wants to expand inside Germany.
Furthermore, she believes that HypoVereinsbank will benefit because it owns Bank Austria Creditanstalt, which should do well from the accession of East European countries to the EU in May.
Despite the strength of the euro, Baig believes BMW’s export market in the US will not be damaged. She says that although prices will rise with the depreciation of the dollar, US customers are willing to pay more for the brand.
Baig believes the overall effect of the strong euro on Europe will be diminished because, she says, the US has become a less important trading partner and companies have made progress to relocate production outside the region. She believes European equity markets will experience double-digit growth this year.
“Europe looks good value in relation to other markets and itself on a historical basis,” says Baig, adding that a combination of attractive valuations and strong earnings growth will support markets.