European stocks could make 2-digit gains

DOUBLE-DIGIT gains could be possible for European stocks this year, with projected earnings growth of around 10 per cent and dividend yields of 2.5-3.5 per cent, said Threadneedle Investments' head of Pan European Equities, Dan Ison.

Amid a eurozone recovery, opportunities can be found in stocks that focus on the European domestic market such as in the financial, media, telecoms and travel and leisure sectors, he said.

Mr Ison, who runs funds by London-based Threadneedle totalling US$1.5 billion, said mega-cap European stocks exposed to international growth such as consumer staples giant Nestle are not as attractive by contrast. They are trading at high earnings multiples even though the rest of the world faces slowing growth, he said.