Vote of low confidence
France quick poll results
French asset managers have a low level of confidence in the ability of their new government to deliver economic recovery and are sceptical as to whether EU governments can resolve the Eurozone crisis, according to a new poll from RBC Investor Services.
Over three-quarters (78%) of respondents to the poll, staged in May, expressed a lack of confidence that the new French government could facilitate the necessary conditions for economic recovery in France. Only 20% expressed any degree of confidence that the government could deliver the right conditions for economic recovery.
The poll was conducted at a special RBC Investor Services client breakfast briefing for asset managers hosted in Paris just three weeks after the election of new French socialist President François Hollande.
Our poll asked asset management respondents about their opinions on the financial crisis – globally, within the Eurozone and in France – and its impact on the French stock market and custodian banks.
The poll findings showed a lack of confidence that governments worldwide would be able to resolve the current crisis. Although a significant 38% expressed a degree of confidence that the crisis would be resolved, a majority of 62% were not confident that this would happen. There was a similar lack of confidence about the prospects for EU governments resolving the Eurozone crisis. Again a majority of 62% were not confident in a positive resolution, as against 38% who were ‘quite confident’ that a solution might be reached.
There was even less confidence that the current austerity drives across Europe would be sufficient to resolve the Eurozone crisis. Two-thirds of the participants (65%) were not confident that this strategy would be effective, while only one in three (35%) were ‘quite confident’ that the austerity measures would work.
It is interesting that, while French asset managers were not convinced that austerity measures were the solution to the current crisis, they were even less convinced that their new government’s programme would facilitate recovery despite President Hollande’s anti-austerity stance. The problem may be that the President’s agenda is viewed as anti-business. It remains to be seen how his government’s budgetary and reform measures will impact the French economy over the longer term.
While our poll revealed only limited confidence in global and local crisis recovery measures, views on the outlook for the French equity market between now and the end of 2013 were far more positive. Some 42% of respondents thought the market would rise as against 29% who thought it would fall, while 27% believed that it would remain at current levels.
The good news for custodian banks is that there is a high level of confidence in their ability to provide the services and support that investment managers need in the current financial crisis.
Reactions here were extremely positive. The large majority of our respondents (87%) were confident that custodian banks would be able to provide the necessary level of support, while only 11% expressed reservations.
The poll questionnaire was completed by 55 French asset managers. Of those who stated their assets under management (AuM) 62% had AuM of up to €500million, 19% were in the range €500million-€1billion, while 19% had AuM of more than €1billion, including 13% with AuM in excess of €5billion.
View our full quick poll results.
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