According to head of Investment Strategy Ralph Wessels, the financial sector was still severely affected by falling interest rates and provisions for bad loans at the start of the corona year last year. He also points out that dividends and share buyback programs have been restricted to protect the capital position.
Wessels anticipates that with the advent of the economic recovery, financial institutions may be able to give the green light in the course of the second quarter to be able to pay dividends again. He also emphasizes that the rising yield curve is positive for profit margins.
ABN Amro Mees Pierson is less enthusiastic about the prospects of communication services. Wessels takes into account that sectors such as telecom and the traditional advertising market will not or hardly benefit from an expected upturn in economic growth.
ABN Amro Mees Pierson’s preference is still for shares. The expected broad-based revival of the global economy in the second half of the year, combined with continued stimulus from central bankers and governments, will contribute significantly to this, according to private bankers.
The progress with the roll-out of the vaccinations is another reason for ABN Amro Mees Pierson to designate stocks as ‘considered’.
Within the developed regions, ABN Amro Mees Pierson expects the US market to outperform Europe in equities. In addition, emerging markets are given a heavier weighting than developed countries.
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‘Economic clearance opens the door of the financial sector to dividend’ | Financial
Source link ‘Economic clearance opens the door of the financial sector to dividend’ | Financial