Expect bank stocks to continue to surge

UK INCOME

Despite a recent rally, UK equities are still fundamentally undervalued, and offer investors opportunities for decent dividends and growth.

Many companies that have previously suspended dividends, such as banks and some industrials, will resume later this year. Once this happens, the herd of income funds will probably buy back into the stocks, driving share prices higher. In these individual cases, a nimble investor has the opportunity to profit both from dividends and capital growth. Engineer GKN has just announced it will resume paying a dividend, after a period of cost-cutting and recovering markets has allowed it to return to profitability. Banks such as RBS and Lloyds will be relieved the less onerous requirements...