Time to move to a stockpicking approach

european equities

The European equity markets have risen more than 50% in a year but there is further upside to be found for investors who can get their research right

European equity markets have risen substantially since their lows in March 2003. The FTSE Europe (ex UK) index has risen 52.2% from its lows on 12 March 2003 through to 3 May 2004, in euro terms (see chart). Does this strong performance make us question our faith in the European equity market? Well, we believe the buy case for continental European equities is still very much intact. European equities appear more cheaply valued than their counterparts in the UK and the US. Using IBES consensus estimates, the FTSE Europe (ex UK) index currently has a P/E ratio of 15.4 times for 2004, ver...