Positive outcome at European summit will help business – asset manager

A positive outcome at this week’s European Union summit will help Portugal’s asset management industry, though it will still face many problems, said Paulo Gonçalves, asset coordinator at Banco Popular in Lisbon.

The bank sees strong opportunities could open up in the equities sector, but it is conscious that it will be a hard sell. “If that happens (a positive summit outcome) it will be very positive for equity funds, because European equities and most equities (globally) are very cheap based on most indicators,” he said. The problem will be to sell the idea of equities to clients after what has been a very volatile year with everyone obsessed with the bad news.

Fund managers in Portugal will also face other problems related to excessive competition for business from providers of time deposits. These have drawn investors and their money away from funds.

Outflows from bond and market funds will continue until Portuguese banks can recover access to the interbank market or issue bonds, he said.

Portuguese financial institutions and fund managers will still face a very tough year, he said. Apart from the competition from time deposits, business in the equity markets  will also be influenced by the banks’ need to recapitalise themselves to meet higher capital ratio requirements.

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