Could See Years of 10 to 15% Earnings Growth: Bevan

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June 6 (Bloomberg) -- James Bevan, Chief Investment Officer at CCLA Investment Management, discusses the possible impact ECB actions may have on European equities and his subsequent investing strategy. He speaks with Guy Johnson on Bloomberg Television’s “On The Move.” (Source: Bloomberg)

Keep the rally firmly on track?

We need continued commitment by the european central bank.

We also need a reform agenda.

I am particularly thinking about italy and france.

At what point will the bund is bank say, we need more help?

I think it is critical for france and italy to reform.

The third issue of course is we need the banks to be lending.

Ok, let's segment that.

Growth.

The reason he is doing that is because growth in europe is shocking.

European equities have rallied on the pricing out of the breakup risks.

We now have low growth, low inflation and draghi is trying to do all he can without stepping into qe.

At a certain point, you have to say, this can't be good for european companies.

We closed some of the spread that exist for companies that don't have great global footprints.

What else is there to do?

When you say european stocks rally, if you look at the trade-off between what is expected from european equities, three years of growth between 10% and 15%. that makes the current valuations look remarkably undemanding.

The question is, now what is ahead?

At one point will the fed begin to take support away?

Every mutual fund under the sun has got the trade on a different path between the fed and the ecb.

That trait is on.

It is on.

Particularly on the credit market.

It is much less evident in the equity markets.

If you said, let's think through what in europe is interesting, it does seem to me italy is a market where people haven't grasped the importance of the reform agenda.

I see real scope for growth, for recovery, for valuation.

The banking sector, we are all worried.

Let's talk about the banks.

I want to spend more time talking about that.

When you look at what is going to happen here, you are convinced three years, double-digit returns, no problem at all.

Double-digit earnings.

Sorry.

You are not concerned about any risk to the fact that we end up in a situation where these companies are going to struggle to deliver that?

Of coarse there is risk.

One wants to have very high constants in companies.

I am absolutely in the camp that says europe is going to have lower from here.

That is why i am interested in companies like deutsche telekom.

They will benefit because of the leverage situation.

Also, sap.

James, stay with us.

This text has been automatically generated. It may not be 100% accurate.

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