World-Beating Italian Stocks Seen Surging Another 40% at SocGen
2015-07-22 22:24:03.53 GMT
By Adam Haigh
(Bloomberg) -- Italian equities’ world-beating rally is
just getting started.
That’s according to Societe Generale SA, which sees the
FTSE MIB Index capping its 25 percent jump this year with
another 40 percent gain by 2017.
Tax and labor reforms in Italy combined with European
Central Bank stimulus will boost corporate profits, while
receding concerns about the fate of the euro zone will tempt
global fund managers holding the most cash since 2008, says
Roland Kaloyan, a Paris-based strategist at the French bank.
“Most of the investors I’ve met in Asia are still looking
for an entry point into Europe,” said Kaloyan, the head of
European equity strategy at Societe Generale. He spent the past
week meeting with clients in Singapore, Tokyo and Sydney. “In
the coming weeks and months, more money will be coming into
European equities. Italy and France are our favorite markets.”
France’s CAC 40 Index has jumped 19 percent in 2015.
Investors willing to endure Italy’s wildest stock-price swings
in three years were rewarded with one of 2015’s largest rallies
in the world.
That’s also put Italian stocks among the most expensive.
The valuation on the FTSE MIB rose to 18 times estimated profit
this week, a level not seen since at least 2005 and that briefly
surpassed that of the Standard & Poor’s 500 Index.
The two biggest exchange-traded funds tracking European
shares saw more than $18 billion of inflows in 2015. Banca
Popolare di Milano Scarl, Italy’s oldest cooperative bank,
soared 85 percent this year for the largest gain in the FTSE
MIB.
Still, funds worldwide are waiting it out, according to a
Bank of America Corp. survey, which showed they’re holding on to
the most cash since the collapse of Lehman Brothers. Societe
Generale says that may change as worries about Greece fade.
“Greece was the hurdle,” said Kaloyan. “The deal we’ve
had gives support for European equities.”
For Related News and Information:
Europe Profit Upgrade Unchecked by Greece as Draghi Matters More
Stock Jump Not Enough to Draw Global Investors Stuck in Cash
Wounds Seen Slow to Heal for Europe Stocks as Italy Leads Swings
Developed Market View: DMMV <GO>
Graphing: GRAPH <GO>
Feature stories on stocks: TNI STK GREET <GO>
World Trends and Reversals: WTR <GO>
Equity screening: EQS <GO>
Top Stocks News: TOP STK <GO>
To contact the reporter on this story:
Adam Haigh in Sydney at +61-2-9777-8635 or
ahaigh1@bloomberg.net
To contact the editors responsible for this story:
Sarah McDonald at +61-2-9777-8684 or
smcdonald23@bloomberg.net
Trista Kelley, Cecile Vannucci
2015-07-22 22:24:03.53 GMT
By Adam Haigh
(Bloomberg) -- Italian equities’ world-beating rally is
just getting started.
That’s according to Societe Generale SA, which sees the
FTSE MIB Index capping its 25 percent jump this year with
another 40 percent gain by 2017.
Tax and labor reforms in Italy combined with European
Central Bank stimulus will boost corporate profits, while
receding concerns about the fate of the euro zone will tempt
global fund managers holding the most cash since 2008, says
Roland Kaloyan, a Paris-based strategist at the French bank.
“Most of the investors I’ve met in Asia are still looking
for an entry point into Europe,” said Kaloyan, the head of
European equity strategy at Societe Generale. He spent the past
week meeting with clients in Singapore, Tokyo and Sydney. “In
the coming weeks and months, more money will be coming into
European equities. Italy and France are our favorite markets.”
France’s CAC 40 Index has jumped 19 percent in 2015.
Investors willing to endure Italy’s wildest stock-price swings
in three years were rewarded with one of 2015’s largest rallies
in the world.
That’s also put Italian stocks among the most expensive.
The valuation on the FTSE MIB rose to 18 times estimated profit
this week, a level not seen since at least 2005 and that briefly
surpassed that of the Standard & Poor’s 500 Index.
The two biggest exchange-traded funds tracking European
shares saw more than $18 billion of inflows in 2015. Banca
Popolare di Milano Scarl, Italy’s oldest cooperative bank,
soared 85 percent this year for the largest gain in the FTSE
MIB.
Still, funds worldwide are waiting it out, according to a
Bank of America Corp. survey, which showed they’re holding on to
the most cash since the collapse of Lehman Brothers. Societe
Generale says that may change as worries about Greece fade.
“Greece was the hurdle,” said Kaloyan. “The deal we’ve
had gives support for European equities.”
For Related News and Information:
Europe Profit Upgrade Unchecked by Greece as Draghi Matters More
Stock Jump Not Enough to Draw Global Investors Stuck in Cash
Wounds Seen Slow to Heal for Europe Stocks as Italy Leads Swings
Developed Market View: DMMV <GO>
Graphing: GRAPH <GO>
Feature stories on stocks: TNI STK GREET <GO>
World Trends and Reversals: WTR <GO>
Equity screening: EQS <GO>
Top Stocks News: TOP STK <GO>
To contact the reporter on this story:
Adam Haigh in Sydney at +61-2-9777-8635 or
ahaigh1@bloomberg.net
To contact the editors responsible for this story:
Sarah McDonald at +61-2-9777-8684 or
smcdonald23@bloomberg.net
Trista Kelley, Cecile Vannucci