Nowhere is the sea change in Europe more visible than in the performance of its banking sector.
During 2013, the four best-performing banking sectors, based on their stock performance, and tracked by Citi, came out of Europe.
This is how banking sectors stacked up globally (the ten best and worst) based on USD:
Qualivian Investment Partners Up 30% YTD; Long ORLY Thesis
Qualivian Investment Partners commentary for the second quarter ended July 30, 2020. Q2 2020 hedge fund letters, conferences and more “Short-term investors will accept a 20% gain because they didn’t spend the time to develop the conviction and foresight to see the next 500%.” - Ian Cassell Executive Summary Readers of investment letters fall into Read More
However, Japan and Argentina topped the charts when measured in local currency.
The bottom of the heap in 2013
Currency turmoil and political upheavals dogged the performance of banks in India, Thailand and Turkey which came in as the worst-performing sectors, whether measured in USD or local currency.
European banks region-wise performance – last twelve months
Measured in local currencies the top and bottom performing regions over the last twelve months were as follows:
Market-wise performance – last twelve months
Measured in local currencies the top and bottom performing markets over the last twelve months were as follows:
Global banks in 2014
“For 2014, we remain overweight European banks, with the sector at an inflection point on capital, restructuring and the real economy, while the transition to ECB supervision should serve to reduce the sector risk premium,” say Citi analysts.
US banking valuations “look fuller,” but down the line, rising interest rates and cyclical factors will have a salutary effect.
Individual banking picks in 2014
Citi favours Barclays PLC (ADR) (NYSE:BCS) (LON:BARC), BNP Paribas SA (ADR)(OTCMKTS:BNPQY), Danske Bank A/S (ADR)(OTCMKTS:DNSKY) and ING Groep NV (ADR) (NYSE:ING) in Europe; BB&T Corporation (NYSE:BBT) amongst US regional banks; JPMorgan Chase & Co.(NYSE:JPM) and Bank of America Corp (NYSE:BAC) within the US large cap banks; and CCB, HSB, MUFG and Sumitomo Mitsui Financial Grp, Inc. (ADR)(NYSE:SMFG) in Asian banking.