While on both sides of the Atlantic the EuroStoxx50 and the S&P 500 registered increases of close to 18% in the year and the Ibex was satisfied with 10%, France is the most bullish of the large markets after advancing 23%. The Cac 40 is 1.4% away from breaking all-time highs , retains an upward potential of 9.5% and 65% of its components have a purchase advice
The Paris of Macron and Mbappé has little to do with the one that assaulted a motley troupe of bohemians and intellectuals commanded by Hemingway at the beginning of the 20th century. But the party that French stock investors are experiencing in 2021 has nothing to envy, in stock market terms, to the crazy years that the Lost Generation of American literature mythologized.
From the 2020 lows, Cac 40 bounces 80% and is 1.4% from pulverizing the all-time highs it achieved in 2000 at 6,922.30 integers. With an annual balance that exceeds the profits obtained by the S&P 500 by 5 points and the Ibex 35 by 13 points, the Parisian market has uncorked the champagne and is the most bullish in a year marked by the post-Covid recovery.
And far from showing signs of a hangover, the consensus collected by Bloomberg gives it a potential of 9.5% to 7,429.26 points, which would mean reaching levels never seen before and the definitive toast.
“We believe that the reopening phase is particularly beneficial for the French market, which should outperform in the second half. In particular, we think it should outperform the S&P 500, which is heavily weighted in the companies that benefited the most from the lockdown. , like Netflix and Amazon, “says Cédric Baron, director of Multi-asset Strategies at Generali Investments Partners.
Generali: “We think it should outperform the S&P 500, which is heavily weighted in the companies that benefited the most from the lockdown.”
Proof of this confidence are the valuations that its listed companies receive despite the high revaluations. 65% of its members have a purchase council and only one, Unibail-Rodamco , a sell . 77% have room to advance between 1% and 36% in the coming months.
The secret is none other than diversification. “France has always been home to some of the most exciting companies on the European stock market,” says Ben Ritchie, head of European equities at Aberdeen Standard Investments.
The French stock market has benefited from its exposure to segments that have performed extremely strongly this year. On the one hand, industrial and cyclical, which are recovering strongly, such as ArcelorMittal , Saint Gobain and Stellantis .
“These companies are benefiting from a rapid revenue recovery coupled with significant positive operating leverage, which is expanding margins. All are making significant internal changes and improvements in cost, cash flow and focus, which it has contributed to increased shareholder value, “adds Ritchie.
“We hope that these national champions will benefit from the significant level of cash savings of consumers around the world.
On the other hand, luxury, favored by the reopening, with LVMH , Kering or Hermès . “We hope that these national champions will benefit from the significant level of cash savings of consumers around the world and take advantage of their pricing power in this environment,” says Baron.
And finally, the Cac has also opened up to technology in recent years, with representatives such as Capgemini , Atos or STMicroelectrocnics .
Political stability and reforms
Political stability also accompanies projections. “France owes its competitiveness to its undeniable economic and social assets, but also to the renewed competitiveness of its companies thanks to the pro-business and supply policy that Macron has put in place ,” says François Breton, manager of the EdR SICAV Tricolore Rendement fund. For Thibault Vasse, an analyst at Scope Ratings, “the country can reap economic benefits in the longer term, as long as it maintains them and there are no adverse political changes after the 2022 elections.”