A recent financial survey showed that 72% of respondents are quite excited about what 2017 holds for the UK stock market.
Richard Hunter, head of research for Wilson King Investment Management, thinks a lot of the themes going into to 2017 will be similar to the past year, with a couple of big questionmarks remaining.
WATCH: Hunter takes a look at what's in store for UK equities in 2017
He pointed out that we haven’t seen the full impact of June’s Brexit vote yet, with Article 50 not to be triggered until in to 2017, so at some point we will start to see just how robust the UK economy is.
Also US president-elect Donald Trump will not be sworn into office until January 20, so it will be a few months after that until we see any impact from his planned infrastructure spending programme and his overseas relationships.
Hunter noted that a potential repatriation of funds into the US if Trump unveils a tax cut could be massively positive, not just for sentiment and corporate investment and hiring, but also technically as it should be immediately earnings enhancing.
He pointed out that estimates suggest about two-thirds of the cash realised could be used for share buy-backs.
There is also some uncertainty in Europe, Hunter added, with lots of elections in the region amid the rise of the Populist movement.
While the Italian banking sector crisis has also to play out, he said, with any sort of read-across likely to give the overall sector some jitters.
On a sector specific-basis, Hunter thinks that Pharmaceutical stocks remain interesting should either sterling continue to weaken or the dollar continue to strengthen.
He highlighted blue chip giants AstraZeneca PLC (LON:AZN) and GlaxoSmithKline plc (LON:GSK) , which do most of their business in the United States, and thinks the sector could be probably due a blockbuster drug.
Hunter added that the sector’s punchy yields are also another reason to look at the pharmas, even with interest rates on the rise in the US and potentially elsewhere next year.
He also sees the media and telecoms sector as remaining a focus for corporate activity following this month’s bid by 21st Century Fox for Sky PLC (LON:SKY), the recent Time Warner deal, and with Liberty Media remaining on the prowl.
Hunter pointed out that it is a chase for content at the moment, so ‘Content is King’ - if it wasn’t already.
He concludes, therefore, that the likes of ITV PLC (LON:ITV) could be put into play.