LIVE MARKETS-The case for Europe: UBS finds 'mostly scepticism'
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THE CASE FOR EUROPE: UBS FINDS 'MOSTLY SCEPTICISM'
UBS has been on a recent marketing trip to test investors about its bullish case for European stocks.
What the Swiss bank found was "mostly scepticism", yet it remains pretty upbeat about the old continent, especially given the potential for huge flows if more investors come on board.
UBS said while people are greatly aware of German stimulus and the rise in defense spending, one key underappreciated driver for future performance is the "new political esprit de corps" led by the European Commission.
"It was really clear to us that the political change underway in Europe is not well understood at all," writes UBS strategist Gerry Fowler, noting that if efforts in Brussels to boost Europe's international competitiveness succeed, investors should prepare for regular positive surprises.
"Longer term investors/asset owners have not moved their allocations materially yet, including US wealth investors and global sovereign wealth, insurance and pensions. This reinforces the possibility that if things continue to go well in Europe into 2026, there could be significant flows to come".
UBS sees potential for around $1.2 trillion in equity buying in the coming years for Europe.
(Danilo Masoni)
EARLIER ON LIVE MARKETS:
DOMESTICS TO KEEP OUTSHINING EXPORTERS - JPM CLICK HERE
EUROPE'S STOCKS RESILIENT CLICK HERE
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