1. Newsroom
  2. Market views on Italy remain constructive
Menu
UBP in der Presse 26.02.2018

Market views on Italy remain constructive

Market views on Italy remain constructive

Fondi e Sicav (26.02.2018) - Italian elections: a fragile coalition could threaten future economic performances


Confidence is key for growth to continue to perform well; the economic recovery is mainly being driven by domestic sectors, but recent GDP performances (1.5% in 2017) remain below the EU average (2.5%). A hung parliament or a fragile coalition could be clear risks in terms of future economic performances: if reforms are stopped or reversed by the next government, it will be difficult for Italy to rebuild higher potential growth over the medium term and to actively participate to a renewed EU project, as suggested by Emmanuel Macron and Angela Merkel. Cyclical growth has strengthened but structural growth remains low: Italy is currently showing a current account surplus (2.7% in 2017) and its fiscal deficit is below 2%. These positive results have to be consolidated by a clear economic policy that favours ongoing reforms (labour, public sector, new technologies and services) and maintains the long-term goal of better-balanced public finances. Participation in the EU is also at the centre of political debate in Italy, but the problems attached to Brexit should contain risks of an “Italy-exit”.

Market views on Italy remain constructive, as long as the recovery is in place and the banking sector continues to reform. Fears about the banking sector have penalised the market in the past, but the outlook has improved and the sector has delivered a strong performance year-to-date.

Moreover, EPS growth in Italy looks sustained (16.8% for 2018 according to the IBES consensus), while valuations remain relatively moderate compared with other developed and European markets. The growth trend should continue to fuel market performance, unless a major negative surprise arises as a result of these elections.

No major systemic risk has been priced into the bond markets ahead of these elections. The 10-year spread on bonds over German Bunds has narrowed in recent months, while volatility rose across all asset classes. In January, the ECB reduced its purchases of Italian bonds in parallel with the overall reduction of its QE programme (EUR 30 bn per month), but it has increased the duration of the Italian bonds purchased. The ECB’s purchases have helped to reduce the cost of capital in peripherals since 2012; when this process ends (probably at the end of 2018), Italian fundamentals will take the lead in driving bond yields and spreads.

UBP Market Insight

GAUTRY_Patrice_UBP_72dpi-9511.jpg

Patrice Gautry
Chief Economist

Asset class

Japanese equities

Why the current outlook makes a compelling case for Japanese equities

Watch the videos

Meistgelesene News

UBP in der Presse 02.04.2019

Zürich ist ein zentrales Standbein für die UBP

Le Temps (29.03.2019) - Vor genau vier Jahren hat die UBP die Privatbank Coutts übernommen. Heute verwaltet UBP 25 Milliarden Franken in der Wirtschaftsmetropole der Schweiz und hat damit ihre Kundenvermögen innerhalb von fünf Jahren verdoppelt. Wir haben Adrian Künzi, Leiter der UBP Zürich, getroffen.

UBP in der Presse 03.12.2018

Union Bancaire Privée – eine Bank ganz in Familienhand

The Straits Times (25.11.2018) - Der CEO will die UBP zu einer der grössten Banken in Familienbesitz machen.

UBP in der Presse 26.03.2019

UBP is ready for all Brexit eventualities

AWP (25.03.2019) - Union Bancaire Privée (UBP) anticipated the uncertainties surrounding future relations between the United Kingdom and the European Union. By expanding in London with the acquisition of ACPI and maintaining a strong presence in Luxembourg, the Geneva bank is prepared for any outcome, as its CEO Guy de Picciotto explained to AWP.


Auch lesenswert

UBP in der Presse 20.05.2019

Grenzen zwischen privaten und institutionellen Kunden schwinden

Le Temps (20.05.2019) - Professionelle Vermögensverwalter mussten sich der Erkenntnis stellen: die Grenzen zwischen privaten und institutionellen Kunden schwinden zusehends. Auch die Bedürfnisse, die bislang jedem Segment eigen waren, passen sich mehr und mehr an.

UBP in der Presse 09.05.2019

China is the place to invest in equities

Bilan (24.04.2019) - Since China joined the WTO in 2001 and adopted a capitalist approach to its economy, investors have viewed the local financial markets with an equal mix of hope and fear.

UBP in der Presse 03.05.2019

Volatility Strategy: A Financial Game of Musical Chairs

Agefi (29.04.2019) - Using an overlay strategy to cope with challenging markets