“The Italian market is one of the promising ones in Europe. The reason? A robust and sophisticated demand in a poorly banked market. A condition that has allowed the growth of the most aggressive operators in Europe, such as Fineco or Banca Generali. Only in the United States are there platforms comparable in supply efficiency ”. Word of Lorenzo Gazzoletti, managing director of Oddo Bhf, a financial boutique with a double vocation: the stock markets, the hunting ground of the Parisian broker for five generations; experience in credit, export financing and assistance to 2.300 companies in the Mittelstand, the heart of the German economy, the heritage of BHF, the soul of the other side of the Rhine. A financial boutique so to speak, given the dimensions (over 100 billion euro under management, 2,300 employees) which qualify it as one of the most important independent financial players in the heart of Europe which has now chosen Italy as its third market for development, with the opening of a branch autonomous. Under the direction of Gazzoletti, Bocconi school, who however does not abandon the headquarters in Paris, one of the best equipped think tanks to follow, with hundreds of analysts, the evolution of companies in the heart of Europe. Naturally with an eye to the next electoral challenges in France..
What are the moods of the Parisian City exactly one month before the ballot among the most voted for the Elysée?
“The French institutional system was built in order to protect the country from the effects of an emotional vote, of pure protest. Our forecast, supported by the polls, is that the challenger, probably Emmanuel Macron rather than François Fillon, will be able to beat Marie Le Pen by a large margin. It will be interesting, however, to see the composition of the new parliamentary assembly. In the last legislature, François Hollande was conditioned by a left-wing parliamentary majority, chosen by Marine Aubry”.
And this time?
“I believe that Macron will be supported by a right-wing parliamentary majority. A new cohabitation is looming between the president who lived as close to the socialists and a more conservative majority. But this isn't necessarily a bad thing. The important thing, and this does not apply only to France, is that the political forces are aware that the system is facing the last chance: if a season of reforms does not open, the next time the populists will make it through”.
And is there room for reform?
“In France, space is huge. The country needs strong labor market initiatives, bureaucracy and a thorough fiscal reform. Let's hope that action will soon be taken, because under the pressure of the fiscal compact, a generation of politicians is wearing out: at this rate, only the populists will remain standing. For this reason, the elections represent the last chance”.
Italy is no better…
“From what I hear from managers and bankers, I would say that the Italian problems are similar but with one aggravating circumstance: the bad demographic dynamics which represents a very heavy mortgage on future growth possibilities. But an indebted country like Italy urgently needs to grow. Unfortunately, the European framework, for now, is not helping. All that remains is to hope for a German vote that will help Angela Merkel to emancipate herself from Schaeuble's tutelage. Meanwhile, the inflation gap is widening: it rises beyond the Rhine because Germany is bursting with liquidity imported against the surplus, it remains too low in Italy ”.
Put like this, the optimism of the markets is not understood.
“Exchanges think on a shorter time horizon. And the prospects, in this regard, are good. Both from a macroeconomic point of view, thanks to the action of central banks and, above all, corporate accounts. Indeed, there is a new fact. From 2010 onwards we have had to deal with disappointing balance sheets: positive forecasts are made every year at the beginning of the year, in recent years in January and then revised downwards. On the contrary, in 2017, profit estimates are being revised upwards. At least by a couple of points."
Better Europe or America?
“Europe certainly has more chances. If we take into account the P/E of the performance of the bonds, the greater convenience of the European lists emerges”.
In Italy there is, moreover, the Pir effect on collection. How much can it be worth?
“The French correspondents, the PEAs, cover a significant part of the market. The real problem is providing operators with adequate raw material: Aim does not offer a good quality offer, Star risks proving to be too small. We hope that the supply of good quality titles will grow”.
Maybe it's the right time. Bank credit is no longer sufficient to support the economy.
“The offer on the securities market of the banks was less efficient in Italy than in other countries. But this, paradoxically, proved to be a great advantage for the independent offer”.
In what sense?
“An efficient bank tends to promote home products to the detriment of others. In Italy, on the contrary, independent companies, networks and more dynamic banks have grown and have gone on the hunt for the best products to offer to customers. Only Switzerland, apparently, boasts equally well-equipped competitors. Not to mention the clientele, much more knowledgeable and sophisticated than one might think. This is why Oddo Bhf looks with great attention and trust at Italy where we have already recorded significant growth, even before adopting an independent structure, as happened recently. Our goal is to grow further both in the high segment of the networks of financial advisors and financial advisors and in institutions, the most recent target".
