European banks represent the world’s biggest contrarian trade: Citi

21 September 2016 12:00 am - 0     - {{hitsCtrl.values.hits}}

A A A

REUTERS: Buying European bank stocks would be the world’s biggest contrarian trade, Citi analysts said, adding they expect both returns and asset quality to improve next year.


Banks in the economic and monetary union in Europe are the worst performing sector over the past decade among the 285 sectors which Citi tracks globally. The U.S. investment bank stopped short of recommending an outright “buy” on the sector, given that banks still face headwinds from low inflation and low interest rates while earnings expectations remain under pressure.
“History says ‘Buy’, but our key message is do not ‘Underweight’ the sector,” said Citi analysts, led by Jonathan Stubbs, in a note to clients.


Danske Bank, Standard Chartered and BBVA are the U.S. broker’s preferred picks, while it counts HSBC among its less preferred stocks. Banks globally have been on the backfoot since the 2008 crisis. Citi noted that emerging markets are the only region in which banks currently trade above their 
book value.


European banks, down 22.6 percent this year, currently trade at about 0.7 times book value while Japanese banks, at about 0.5 times, are the world’s cheapest, according to Thomson Reuters data.

 

See Kapruka's top selling online shopping categories such as Toys, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,News, Courier/Delivery, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka.

 

  Comments - 0

See Kapruka's top selling online shopping categories such as Toys, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,News, Courier/Delivery, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka.

 

 

Add comment

Comments will be edited (grammar, spelling and slang) and authorized at the discretion of Daily Mirror online. The website also has the right not to publish selected comments.

Reply To:

Name - Reply Comment




ANYTHING FOR MONEY

Some unregulated online lenders are remotely taking control of phones of thos

Frontline cops charge negligence by high-ups worsened police cluster

The police have done an invaluable service in the frontlines to combat the CO

US Vice President-Elect Kamala Harris’s Key Sri Lankan Tamil Aide

An overwhelming feeling of relief has descended upon the world-not merely th

The virus may be spreading much faster than official data suggest

The daily case reports from the Epidemiology Unit are the only data we have t

See Kapruka's top selling online shopping categories such as Toys, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,News, Courier/Delivery, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka.