The FSA Spy market buzz – 1 November 2024
Battleshares’ old versus new, Goldman Sachs’ Cassandra warning, Hong Kong property’s negative equity woes, Ninety One’s trillion-dollar question, Contrarian alert from CB, Lists and much more.
The outlook for European equities is positive.
Fund selectors are planning to increase allocation to European equities, according to Fund Selector Asset Class Research data. Nearly 60% of the fund buyers polled indicated their intention to increase allocation to the asset class in the next 12 months, while only 8% said they would reduce it.
“This could be the trade of the century,” Luca Paolini, Pictet Asset Management’s London-based chief strategist, said about European equities. “You buy a market that is roughly 20% cheaper than the US and you buy it in a cheap currency.”
The recent victory of Emmanuel Macron in the French presidential election has removed a layer of risk from European markets, some sources said. Only 39, he is the youngest president of France to be ever elected since the French emperor Napoleon Bonaparte took power at the age of 35.
“We upgraded our view on European equities to neutral from underweight, as Frexit risk has been mitigated,” said James Cheo, investment strategist at Bank of Singapore. “European equities have higher dividend yield compared to other markets which provides a good source of carry.”
But risk of political disruption in Europe remains, particularly with the Italian general elections expected no later than spring 2018. Paolini, from Pictet, said investors should not overestimate the short-term impact of the elections.
Against this backdrop, Peter Brunt, London-based senior analyst for manager research at Morningstar, provides a comparative analysis of two European equity products, BNP Paribas Investment Partners’ Parvest Equity Best Selection Euro Classic-Capitalisation Fund and the Schroder International Selection Fund Euro Equity Fund.
Battleshares’ old versus new, Goldman Sachs’ Cassandra warning, Hong Kong property’s negative equity woes, Ninety One’s trillion-dollar question, Contrarian alert from CB, Lists and much more.
Part of the Mark Allen Group.