Saturday, February 16, 2013

Dominate the eurozone sovereign debt market

Led by THE euro zone sovereign debt crisis market again last week with the sharp sell-off in Spanish and Italian bonds and equity market - the euro zone equity market as a whole fell by about 5% last week. Developed equities, European equities and in the aggregate, are cheap to begin with, but fell recently left the valuation of the euro area appear even less. To policy makers and politicians a clear statement of intent required of us suspect material valuations will rise, but when risk appetite returned either we can expect the euro area, and the Spanish and Italian in it, to lead the rebound in developed market for a while at least. Spot potential Spanish and Italian stock market enhanced when we remember that there are a number of large, liquid companies in each of the actual derived mostly from sales and income outside of their local economies. In our view, the company may have been unfairly tainted by the sentiments of the local economy rather than on the basis of the business driving the sell-off. When we saw some big cap names in Spain, Telefonica and Banco Santander are actually derived two-thirds of its revenue outside the confines of space, but now Trading at close to 40% discount trend. Cheapness alone does not always drive performance, and our colleagues at Barclays Capital is not very positive in one of these companies at this time, believing that the company specific catalysts may be necessary for them to excel . However, given the potential for a revival in risk appetite, the stock is clearly for people to watch closely. At the country level, we note that Italy and Spain are currently Trading at a discount of 11% for the Eurozone, while Greece itself Trading at a premium of 5%. The recent sell-off in equities can be seen in the same country as the worst sing now. Spain and Italy account for 8% and 6% of the European market as a whole, each around which smaller companies (Greece, Portugal and Ireland) account for less than 2%. There's really little we recommend stocks from smaller peripheral countries but we also want the core markets: Remember that Germany and France account for 43% of the entire Eurozone. We simply assume that the immediate bounce, it is more fluid device on the market to lead the way. Investing in stocks is not for everyone. Their values ??may fall and you may get back less than you invested. If you are unsure, you should seek independent advice. Andrew Miller :: regional head office of Barclays Wealth in Newcastle

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