The market has been very concerned about the economic slowdown and geopolitical issues in Europe - obviously Brexit being the biggest, most significant one. Show More
European banks
During the last quarter US economic strength led market sentiment, resulting in a widening valuation gap between the US market and the rest of the world. This widening gap implies a much more favourable backdrop for long-term returns outside the US. Expectations of non-US countries are not only lower, but... Show More
Despite political tension and underperformance of the European Financials sector in the June quarter, results in 2017 and the first quarter were solid. We saw upgrades for the European banking sector through 2017 on the back of improving loan losses and continued uptick in lending growth. The banks are also... Show More
German equities recovered some ground early on Monday as the government coalition between Angela Merkel’s Christian Democratic Union (CDU) and Germany’s Social Democratic (SPD) party was approved by SPD members over the weekend. Show More
The global banking sector has been undervalued since the financial crisis. However central banks are starting to increase rates and this should be positive for the sector as it will enable banks to make money out of the liability side of their balance sheet. It is hard to make any... Show More
We know Europe has been through a touch economic cycle over the last few years since the GFC. That's somewhat on the mend now. Once the European earnings come through, the markets will start to appreciate that and reward those stocks - both with a re-rating as well as seeing... Show More
I recently attended the Bank of America Merrill Lynch 22nd Annual Financials CEO Conference in London. With financials being such a large weighting in global, and local, equity indices and the interest rate cycle turning up, attending this conference has given me genuine insight into the prospects for UK and... Show More
After eight years of falling interest rates and quantitative easing, most investors are wondering how long before the next great fall and when it will happen, mostly so they can dump their shares and avoid the pain suffered during the GFC. Show More
The European Union (EU) has often been described as an economic impossibility, however a conclusive and over-looked fact remains, that since the birth of the Euro, the EU has produced a better growth outcome than the US and Japan (Chart 1). Show More
Spanish banks have until recently been an attractive way for investors to play regional economic recovery and rate normalisation. The real estate market in Spain is in recovery mode and prices remain significantly below pre-crisis peak levels (unlike many other countries, including Australia). Domestic Spanish banks generally remain highly leveraged... Show More
PM Capital's Chief Investment Officer Paul Moore and Portfolio Manager John Whelan recently completed a research tour of the United Kingdom, Ireland and Spain. In this video, Paul and John review their tour, sharing insights which show us that some current market beliefs are misconceptions, and that new opportunities are... Show More
Market sentiment often focuses on the negatives, even when economic fundamentals tell a different story. Divergence in sentiment and data like this can present significant opportunities. Andrew Clifford, CIO at Platinum Asset Management, identifies two such global opportunities, commenting that “this is when money is made in markets”. Show More
U.S. banks have recently rallied strongly and it’s worth considering if European banks can follow given relatively attractive valuations and an improving outlook. In this context I recently travelled to meet the senior management from all the major listed banks in the Nordic region. The trip increased my conviction around... Show More
Deutsche Bank is at best borderline for both solvency and profitability with a bail-in the best option to rectify that. Following the confirmation that hedge funds have started to reduce their capital and trading with Deutsche Bank, its position is now perilous. It is correct to say that Deutsche Bank... Show More
AMP Capital’s new exchange traded managed fund, the Dynamic Markets Fund (Hedge Fund), uses five key considerations as part of the dynamic asset allocation investment process. These include asset valuations, stage of the earnings cycle, liquidity and monetary policy, market sentiment, and also technical signals. This process has uncovered an... Show More
A recent Fairfax article about the global banking system focused on the growth of impaired loans and the amount of stress out there. True, the amount of non-performing loans is now slightly above the 4.2% that it was pre the GFC with a read of 4.3%, but the trigger for... Show More
Estimates state that the Italian banking system is holding around €360 billion of non-performing loans and if banks were required to write down these loans to current market values the Italian banking system could be required to raise up to €40 billion of new capital. The issue is that the... Show More
Given the external shock created by Brexit and the initial impact on our UK and European Investments, our CIO Paul Moore provides a further update on Brexit and the global markets in our June quarterly video update. "So clearly with Brexit it is a more difficult environment; uncertainty has increased.... Show More