Today's edition of the Saxo Morning Call features the SaxoStrats team discussing the continuing weakness of the US dollar as commodity prices recover ground and in the wake of key US equity indices hitting all-time highs Thursday.
Article / 19 August 2013 at 8:43 GMT

Quant Corner: French banks remain our equity model's top picks

Head of Equity Strategy / Saxo Bank

France's three largest banks - Societe Generale, Credit Agricole and BNP Paribas - remain our equity quantitative model's favourite picks among major European banks driven by increasing expectations for profitability and benign valuations (see table below).

The model views are unchanged from last week. Deutsche Bank remains the model's top pick if it only takes fundamental data into account, but when the relative momentum is added, the view ends up at neutral. The perception of Deutsche Bank is still dominated by its big and complex balance sheet with relative weak results compared with its peers.

Major European Banks

The chart below shows the weekly performance on a total return basis of the model's top picks from last week. The average return before costs is minus 0.74 percent driven by strong performance at Commerzbank (on the back of its better-than-expected Q2 results), UniCredit and Lloyds Banking Group.

Weekly performance


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Saxo Bank - View on European banks - 2013_08_19

Peter Garnry Peter Garnry
It is not clear in the text, but the weekly performance number of minus 0.74 percent takes the sign (positive vs. negative) into account. Our top picks among the 40 most liquid non-financial European equities will be released tomorrow.
Owen Thomas Owen  Thomas
And here's Peter talking about the potential of French banks to Saxo TV
Peter Garnry Peter Garnry
UniCredit is under pressure today down 4.6 percent.


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