Stephen Thompson, head of the UK specialist team at Merrill Lynch Investment Managers

• The markets started 2003 with a lack of confidence or stability and were very much risk averse. As...

• The markets started 2003 with a lack of confidence or stability and were very much risk averse. As the year progresses confidence will improve and ratings will rise. • Risks have subsided particularly in terms of deflation for both the UK and US although it is still a risk in Europe. Earnings quality has improved, cashflow cover in the US has grown and simultaneously write-offs have diminished. • Equity premium risk has fallen and investors are sitting on record levels of cash. There is a substantial amount of liquidity and this will drive the market going forward especially in the U...