French asset managers lack confidence in government ability to revive the economy
More than three-quarters of French asset managers have little or no confidence that the government will be able to revive France’s economy, according to a pool conducted by RBC Dexia on 55 French asset managers three weeks after the country’s presidential elections.
Only 20% of those surveyed said they were quite confident in the new government on economic recovery and their faith in Europe as a whole was only slightly better.
Two-thirds (62%) displayed little confidence that the European leadership could foster a positive resolution to the financial crisis, and the remaining third (38%) were only ‘quite confident’ that a solution might be reached.
This was also reflected in their opinions of the ability of governments worldwide to get to grips with the crisis. A majority of 62% had no confidence the crisis would be resolved by them, while only 38% expressed a degree of confidence.
The majority of the surveyed said it would take four to five years for the crisis to be resolved.
However, only one in five respondents saw the crisis lasting six years or more. On the contrary, 55% of asset mangers polled believed that views of the current crisis were over-pessimistic.
French asset managers also backed the new government’s belief that austerity alone is not enough to resolve the eurozone crisis. Two-thirds of the participants were not confident that this strategy would be effective, while only one in three were ‘quite confident’ that the austerity measures would work.
According to industry representatives, there are other reasons to be optimistic.
About 42% of respondents said the French equity market would rise between now and the end of 2013 versus just 29% who thought it would fall, while 27% believed that it would remain at current levels.
There is also a high level of confidence in the market in the ability of custodian banks to provide the services and support that asset managers need in the current financial crisis.
“Although still waiting for signs that recovery is around the corner, the French asset management industry is one of the largest and most resilient in Europe and has successfully navigated the current crisis to date. As such, it remains well positioned to benefit from the economic recovery when the right conditions return and confidence improves,” said Philippe Legrand, managing director of RBC Dexia in France, commenting the results.