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Hambro&#39s Costar says bull has come in from the cold

Highly rated J O Hambro fund manager Mark Costar believes there is clear evidence that the UK is in a bull market despite the gloomy predictions of most rival investment houses.

Costar, who runs the boutique&#39s flagship UK growth fund, says the resumption of corporate activity in the weeks following the market low in mid March combined with attractive valuations have convinced him that the stockmarket has entered a bull run.

He says the rallies over recent weeks demonstrate the extent to which appetite for risk is returning as investors look beyond what he sees as short-term economic weakness.

Costars&#39 view is supported by stockmarket historian David Schwartz, who believes recent rallies have the hallmark of past bull markets. But Costar believes fund managers who have performed well in the last three years will need disproportionately strong evidence to persuade them to change their bearish view.

He says: “It has only taken a few weeks of rising markets for corporate activity to improve, with seven or eight cash bids for companies. We are in a bull market in everything but name.”

Schroder UK alpha plus fund manager Richard Buxton says: “It&#39s not unrealistic to say we could see a continuation of this rally for some weeks yet. But the recovery is most likely to be W-shaped, with a possible further retracement later in the year.”

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