But is inflation always a bad thing? “Not always - replies Emmanuel Cau di Barclays – At least when the company's results are solid. In this case, the fear of rising inflation serves to avoid excessive confidence. In this sense, I believe that the rise in stock market prices can coexist with inflation”.
This opinion is confirmed by a survey conducted at the beginning of the week by Bank of America: 69% of operators are convinced that inflation is destined to rise over the next twelve months, forcing the Fed to bring forward the first rate hike; no longer 2023, as promised, but in the fall of 2022. But for 78% of those interviewed, the stock market will be able to continue to rise. Maybe changing horses: fewer growth stocks, more attention to banks which, reversing a negative trend that has lasted in practice since the 2007/09 crisis, can aspire to higher returns on the capital they lend.
The performance of Wall Street justifies this diagnosis: the KBW index has gained 37% since the beginning of the year, three times as much as the S&P 500 (+11%). A rise that unites the list of giants, characterized among other things by the excellent market response to the large bond issues of JP Morgan and Bank of America, and that of regional banks. The exact opposite of what happened in 2020, year of declining rates, in which the banking sector suffered a loss of 14% against the 16% gained by the general index. And the trend, which has favored the arrival of 32 billion dollars in the sector, seems destined to continue as the appeal for tech stocks fades away, at least those that do not allow us to hope for a dividend in a reasonable time.
Even on our side of the Atlantic the banking sector looks set to experience its best year yet after quite a few lean years. The index of Italian banks has gone up by 26,5% since the beginning of the year, to new highs since February 2020, well above the increase in the Ftse Mib (less than 11%). In favor of the sector, then, play the indications arriving from the European Union, both the imminent end of the ban on the distribution of dividends that the green light for the Italian Treasury to renew for a year the guarantee on the securitization of non-performing loans (GACS mechanism), a useful measure to continue the system de-risking process. According to data collected by Banca Ifis, in 2020, out of 38 billion euro of transactions, 37% were carried out using the GACS mechanism. Finally, the prospect of GDP growth (+4,2% over the year) is undoubtedly a panacea for the system, after years of credit available with a dropper.
It is in this framework that the market is preparing to participate in what promises to be a hot season of choices for the consolidation of the system. In addition to the Generali/Mediobanca intersection, under the pressure from Leonardo Del Vecchio, the game around is getting hot Bank Bpm. The ceo Giuseppe Castagna would have explained in the last Board of Directors how an operation with BPER is the main objective and within the reach of the institute. But, according to La Repubblica, two months ago Carlo Cimbri, CEO of Unipol (BPER's main shareholder), would have interrupted talks for a possible operation in this sense. And the president of Bpm, Massimo Tononi, together with some important shareholders of the bank are in favor of an operation integration with Unicredit, already enticed by the Treasury with the renewal of the tax benefits linked to the acquisition of Mps for which, moreover, a possible stew of the branches is looming.
