Overseas investors show interest in Currys, but are UK stocks still worth buying?

UK investors are snubbing home-grown stocks, but international investors continue to show interest – most recently in Currys, the UK electrical goods retailer. We look at whether they’re worth buying.

Currys store sign on building exterior
(Image credit: Getty Images)

UK equities have been out of favour with investors for some time now, but could there be some room for them in your portfolio as international investors eye up UK stocks?

Recent reports show that Currys, the UK electrical goods retailer, had rejected a takeover attempt from Elliott Investment Management, a US fund manager. 

The Financial Times says that the decision from the board was unanimous, and that the proposal was for “62 pence per share – a roughly 32 per cent premium to its latest price, valuing the company at about £700mn”. The offer is said to have been rejected by the board for being too low. 

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UK takeover rules stipulate that Elliott now has until 16 March to make a formal offer. In the meantime, Chinese e-commerce firm JD.com appears to be considering a bid too. 

Both Elliott and JD are overseas firms but, if their takeover talk goes any further, they will be the latest in a long line of international investors buying up shares in UK companies. In fact, the latest data from the Office for National Statistics (ONS) reveals that over half of all UK stocks are held abroad.

Meanwhile, among domestic investors, UK stocks remain unloved. According to Jason Hollands, managing director at Bestinvest, UK investors have been “put off by a combination of gloomy forecasts for the domestic economy and dazzled by the allure of US growth stocks in recent years”. 

Despite this, he thinks that “UK equities are well worth considering given a combination of very attractive valuations, high dividend yields and the relatively defensive composition of the UK market at a time when global growth is fragile”.

Against this backdrop, we look at the pros and cons of adding UK equities to your investment portfolio. What opportunities are overseas investors seeing that you might have missed?

UK stocks are currently undervalued

It has been a challenging few years for UK equities. The Brexit referendum in 2016 caused UK companies to fall in value compared to their global peers, and they have lagged behind them ever since. 

The EU withdrawal agreement was finally passed in January 2020, and had the potential to boost investor confidence by finally making the terms of Britain’s withdrawal from the EU clear. However, Covid followed hot on its heels, initiating the string of challenging economic consequences we are living through today. 

Since then, inflation in the UK has been stickier than in the eurozone and the US, with many putting this down to Britain’s overreliance on gas to heat its homes compared to other countries. 

Now, the latest growth figures have revealed that the UK dipped into recession in the final quarter of 2023.

The good news, however, is that this challenging backdrop has created the opportunity for investors to bag high quality UK companies at discounted prices.

FTSE 100 companies are, in aggregate, trading at a price/earning ratio of 10.8 times their forecast earnings for 2024”, says Hollands. “This is both incredibly cheap compared to long-term median levels of over 13 times, but also the widest discount on record to global equities on 17.5 times forecast earnings.” 

Hollands adds that “[t]his should reassure investors that the recent confirmation that the UK economy entered a mild recession is nothing to worry about from an investment perspective, as it is already more than factored into stock prices”.

Overseas investors take advantage of bargain prices

The latest data from the ONS suggests that international investors have been taking advantage of the value on offer in the UK market. 

At the end of 2022, investors from the US held the largest proportion of UK quoted shares of any country outside the UK, standing at £626.1 billion. 

This was more than half the value of UK quoted shares owned domestically, which is just over £1 trillion. 

Investors from the Netherlands held the largest proportion of UK quoted shares of any European country outside the UK, at £99 billion.

Meanwhile, insurance and pension companies held a historically low proportion of UK quoted shares at 4.2%. 

This has fallen from a high of 45.7% in 1997. The ONS attributed this to companies expecting more profitable returns on overseas shares, as well as changes in pension fund regulations meaning schemes have to back lower risk investments.

Adam Pickett, independent financial adviser for McLaren Capital, says these statistics show the different views of Britain from abroad.

“Overseas investors look to Britain and see a nation that is avoiding extremism and is growing faster than its neighbours,” he says.

“They also see a stock market that is well-valued and paying good dividends. In other words, they're taking an objective view.

"Conversely, Brits have a very different picture. We have a government that is deeply unpopular and will be in power for another year, and we are feeling pressure on our budgets and in our hospitals. These are things that are being felt across the world, but we don't see it, and lead us to be deeply pessimistic about our country's future.”

He suggests British investors are also attracted to the outperformance of US stock markets over the past 20 years.

Should you consider investing in the UK?

UK stocks may not be riding as high as those in the S&P 500, but there are still opportunities.

“The UK market is currently yielding 4.3%, which is the highest dividend yield on any major developed market and a premium to gilt yields”, says Hollands, noting that 10-year gilts are currently yielding 4.11%. 

“Dividends also look very sustainable, as the proportion of earnings being paid out as dividends is quite low compared to history.”

“Over time, a rerating of UK shares towards longer-term trends could deliver significant upside, while in the meantime investors will at least receive the relative security of dividend payouts”, he adds.

Michael Browne, chief investment officer at Martin Currie, has previously highlighted that consumer and travel stocks continue to gain market share and build the strength of their offerings.

This was seen in November last year when EasyJet posted record profits.

Browne also pointed to the software and business-to-business technology sectors, highlighting that the UK has the highest number of unicorns outside of the USA and is a “world-leading centre for the global gaming industry.”

If you want to invest in opportunities in the UK, but you’re not sure which companies to go for, a fund manager could help you achieve diversified exposure to the UK market. This approach could also save you time, as a fund manager will be able to research and monitor the best stocks for you. 

Alternatively, if you just want to gain exposure to a broad market index like the FTSE 100, an index tracker could be a good option for you and will come with lower fees than an actively managed fund.

Katie Williams

Katie has a background in investment writing and is interested in everything to do with personal finance and financial news. 


Before joining MoneyWeek, she worked as a content writer at Invesco, a global asset management firm, which she joined as a graduate in 2019. While there, she enjoyed translating complex topics into “easy to understand” stories. 


She studied English at the University of Cambridge and loves reading, writing and going to the theatre.

With contributions from