Investors renew interest in fundamentals

The second half of 2007 has seen the economic environment deteriorate, driven by US economic slowdown and fallout from the sub-prime lending debacle. Given the US is the largest component of the world economy, a US recession would have material global consequences and the UK would not be immune. Uncertainty is likely to prevail into 2008, as investors ascertain the extent of the fallout from the credit crisis. Investors are now beginning to reappraise their appetite for risk, having realised once again that fundamentals do matter. Against this backdrop, I believe areas that benefited fr...