XM does not provide services to residents of the United States of America.

Move in French banks "excessive" - Barclays

<html xmlns="http://www.w3.org/1999/xhtml"><head><title>LIVE MARKETS-Move in French banks "excessive" - Barclays</title></head><body>

STOXX 600 up 0.5%

France shares cautiously rebound

Carrefour tumbles

S&P futures steady

Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com


Since Emmanuel Macron announced France would be holding snap elections, French banks have tumbled, and although Barclays thinks the general reaction in markets has been "fair", they say the drop in banks has been "excessive".

Uncertainty around France's fiscal situation, the possibility of windfall taxes and slowing integration within Europe have all been cited for reasons why banks have struggled.

The three main French banks - Credit Agricole, BNP Paribas and Societe Generale - have dropped between 11.3%-14.6% since the election was called on June 9, compared to around a 6% fall for an index of euro zone banks .SX7E.

"Despite the uncertainty, we find this excessive in light of (1) the limited EPS risk for banks at this stage, and (2) already depressed valuation levels at which French banks were trading, both in absolute terms and relative to the sector," Barclays equity analyst Sam Moran-Smyth says.

"On balance, we think SocGen and CredAg are more at risk than BNP, considering that BNP is less exposed to France and more diversified (both geographically and from a business mix point of view)," Moran-Smyth adds.

"We also highlight that SocGen's profitability is lower than CASA's, meaning any French related hit may hit SocGen's profitability disproportionately vs. peers."

(Samuel Indyk)






Euro zone, French stocks suffer from political uncertainty https://reut.rs/3Rwubzw

Europe bounces for second day https://reut.rs/3z7wQJC

French banks https://tmsnrt.rs/3KQ4mqc


Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.

All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.

Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.

Risk Warning: Your capital is at risk. Leveraged products may not be suitable for everyone. Please consider our Risk Disclosure.