London market higher on bid hopes

The last few days have been very volatile for the UK stock market, and indeed worldwide stock markets, but this morning the UK market is up around 1.4% on renewed bid and merger activity. There is no doubt that over the last few weeks we have seen a significant increase in corporate activity within many overseas predators hovering over a number of UK companies.

The relatively low exchange rate of UK sterling is giving strength to many overseas companies looking to increase or indeed introduced new exposure in the UK. There has been particular interest from the US market even though the US dollar has also been under pressure of late. It will be interesting to see whether UK directors are able to fight off what many believe will be a significant increase in corporate activity in the short to medium term.

For many years the UK market has been the predator hovering over many overseas companies although of late this has turned full circle and many well known and respected UK companies are now under pressure. While bid and merger activity will not alone support the UK stock market forever it may well offer short-term support in a very difficult economic environment.