Cac 40: France, the new European stock market preferred by managers according to Bank of America

(BFM Bourse) – According to a study conducted by the US bank, nearly 60% of fund managers expect European equities to progress over the next twelve months. France is becoming the European country of choice for managers.

An economic recession is on the horizon for the European Union (and the UK). The European Commission recalled this last week when publishing its economic projections, counting on a contraction in activity this winter.

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

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

Thus almost six out of ten investors surveyed (59%) see further upside potential for European equities in the next twelve months, the highest percentage for six months, specifies the American bank. This percentage breaks down as follows: 50% of respondents expect shares to rise between 1% and 9% over the next twelve months, and 9% expect a rise of more than 10%. […] French equities are also favored by managers. When asked which countries companies would like to overweight their assets in, the French are the first. “France has become the preferred stock market in Europe, followed by Spain and Switzerland

while Germany and Italy remain the least preferred,” summarizes Bank of America. More good news for the Paris Stock Exchange which, according to a count stopped on Monday by Bloomberg, recently surpassed London in terms of market capitalization in dollars.

A rally that is not sustainable [des investisseurs] To return to Europe, “sharing [des valeurs européennes, NDLR] who see a significant drop in earnings per share

in response to slowing growth and mounting pressure on margins it is declining, to 37%, from 48% last month.

Similarly, the percentage of managers who believe the European economy will experience an economic weakening over the next year, if it remains relatively high, dropped to 78% from a record 92% the previous month.

While the managers therefore remain positive on European equity markets over the medium term, short-term risks remain. Therefore 80% of them believe that the recent equity market rally experienced by European equities is not sustainable in the short term.

“Request Destruction”

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

At sector level, the most attractive sectors for managers are, in descending order, insurance, energy, healthcare and banks. Conversely, the real estate sector is at the bottom of the table, followed by commerce, construction and the automobile.