Cac 40: France, the new favorite European equity market for managers according to Bank of America

(BFM Bourse) – According to a study carried out by the American bank, nearly 60% of fund managers see European equities progressing over the next twelve months. France is becoming the favorite European country for managers.

An economic recession is on the horizon for the European Union (and the United Kingdom). The European Commission recalled this last week when it published its economic projections, expecting a contraction in activity this winter.

Will investors turn away from European markets? Not really if we are to believe the conclusions of a study

of Bank of America released Tuesday in which the bank surveyed fund managers.

Thus nearly six in ten investors surveyed (59%) see additional upside potential for European equities over the next twelve months, the highest proportion for six months, specifies the American bank. This percentage breaks down as follows: 50% of those polled anticipate an increase in equities of between 1% and 9% over the next twelve months, and 9% expect more than 10%. […] French equities are also favored by managers. When asked about companies from which countries they would like to overweight their assets, the French come out on top. “France has become the preferred equity market in Europe, followed by Spain and Switzerland while Germany and Italy remain the least preferred”, summarizes Bank of America. Another good news for the Paris Stock Exchange, which, according to a count stopped Monday by Bloomberg,

recently overtook London in terms of dollar market capitalization. A rally

which is not tenable [des investisseurs] To return to Europe, “the share [des valeurs européennes, NDLR] who see a significant drop in earnings per share

in response to slowing growth and increased pressure on margins is fading, to 37%, from 48% last month.

Similarly, the share of managers judging that the European economy will experience an economic weakening over the coming year, if it remains relatively high, fell to 78% against a record 92% the previous month. While managers therefore remain positive on European equity markets over the medium term, short-term risks remain. Thus 80% of them consider that the recent rally

stock market performance experienced by European equities is not sustainable in the short term.

“Destruction of the request”

Moreover, the vast majority of them (76%) believe that the “destruction of demand” will be the main market theme for the coming months. And 83% of them see inflation falling in Europe against 68% last month.

At the sector level, the most attractive compartments for managers are, in descending order, insurance, energy, health and banks. On the contrary, real estate comes in at the bottom of the pack, followed by trade, construction and the automobile.

The Bank of America study was conducted with a panel of 272 participating funds totaling $790 billion in assets under management. 161 participants answered regional questions for assets of 333 billion in assets under management. The survey was conducted from November 4 to 10.Julien Marion – ©2022 BFM Bourse

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