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

Newsletter

Sign up to receive UBP’s latest news & investment insights directly in your inbox

Click and enter your email address to subscribe

Meistgelesene News

Pressemitteilungen 12.07.2018

Neuer Fonds in Euro-Anleihen mit Investment-Grade-Rating

Die Union Bancaire Privée (UBP) kündigt die Erweiterung ihres Angebots in Euro-Anleihenfonds mit der Auflegung eines neuen Fonds mit Fokus auf Investment-Grade-Papieren an.

Pressemitteilungen 25.06.2018

Die UBP stärkt Vermögensverwaltung für US-Kunden

Die Union Bancaire Privée («UBP») gibt die Ernennung von Deepak Soni zum CEO ihrer Tochtergesellschaft UBP Investment Advisors SA («UBP IAS») per 1. Juni 2018 bekannt.

Pressemitteilungen 05.06.2018

Neue Strategie auf alternativer UCITS-Plattform der UBP

Die Union Bancaire Privée, UBP SA («UBP»), lanciert in Partnerschaft mit Cheyne Capital Management (UK) LLP («Cheyne Capital») eine neue Equity-Arbitrage-Strategie auf ihrer alternativen UCITS-Plattform. Die auf alternative Anlagen spezialisierte Verwaltungsgesellschaft Cheyne Capital hat ihren Sitz in London. Dies ist der vierte Fonds der alternativen UCITS-Plattform, deren verwaltete Vermögen nun mehr als CHF 700 Millionen betragen.

Auch lesenswert

Pressemitteilungen 12.07.2018

Neuer Fonds in Euro-Anleihen mit Investment-Grade-Rating

Die Union Bancaire Privée (UBP) kündigt die Erweiterung ihres Angebots in Euro-Anleihenfonds mit der Auflegung eines neuen Fonds mit Fokus auf Investment-Grade-Papieren an.

Pressemitteilungen 25.06.2018

Die UBP stärkt Vermögensverwaltung für US-Kunden

Die Union Bancaire Privée («UBP») gibt die Ernennung von Deepak Soni zum CEO ihrer Tochtergesellschaft UBP Investment Advisors SA («UBP IAS») per 1. Juni 2018 bekannt.

Pressemitteilungen 05.06.2018

Neue Strategie auf alternativer UCITS-Plattform der UBP

Die Union Bancaire Privée, UBP SA («UBP»), lanciert in Partnerschaft mit Cheyne Capital Management (UK) LLP («Cheyne Capital») eine neue Equity-Arbitrage-Strategie auf ihrer alternativen UCITS-Plattform. Die auf alternative Anlagen spezialisierte Verwaltungsgesellschaft Cheyne Capital hat ihren Sitz in London. Dies ist der vierte Fonds der alternativen UCITS-Plattform, deren verwaltete Vermögen nun mehr als CHF 700 Millionen betragen.