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Investment Talks - Italian budget proposal under scrutiny

United Kingdom, 10/2/18,  by Amundi

  • The key points of the budget law. The Italian Government negatively surprised the markets by announcing a substantially increased budget deficit target for 2019-2021 to 2.4% in a move that could undermine the potential to reduce the Italian debt burden (130% of GDP) in the coming years.
  • Market reactions: The Italian move has triggered a selloff on Italian assets (bonds, equities and banking sector in particular). Uncertainty will remain high with debt sustainability under scrutiny by markets and rating agencies expected to reassess the country rating by end of October. A downgrade is now more likely.
  • Our view: On Italian debt we have a neutral view and will continue to monitor the details of the budget law and developments in the economic outlook. We stay cautious on Italian equity where we focus on less leveraged companies. Short-term volatility could impact European equity, but we are more constructive on mid-term outlook.

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Amundi is Europe’s largest asset manager by assets under management and ranks in the top 10[1] globally. It manages more than 1.470 trillion[2] euros of assets across six main investment hubs[3]. Amundi offers its clients in Europe, Asia-Pacific, the Middle East and the Americas a wealth of market expertise and a full range of capabilities across the active, passive and real assets investment universes. Clients also have access to a complete set of services and tools. Headquartered in Paris, and listed since November 2015, Amundi is the 1st asset manager in Europe by market capitalization[4].

 

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Footnotes

 

  1. ^ [1] Source IPE “Top 400 asset managers” published in June 2018 and based on AUM as of end December 2017
  2. ^ [2] Amundi figures as of September 30, 2018
  3. ^ [3] Investment hubs: Boston, Dublin, London, Milan, Paris and Tokyo
  4. ^ [4] Based on market capitalization as of September 30, 2018

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