Research (Investicniweb.cz)
World markets  |  August 04, 2012 07:50:39

Time for stock purchases in Europe



Currency, which may collapse at any moment, collapsing banking system, the deepening recession and toothless authority, which do not have nearly no instruments of monetary and fiscal policies that could help the economy. Such is the current picture area. It is not difficult to predict European stock markets the worst scenario. But what is power, there is too much. Some stocks deserve the current valuation.

Shares are some (mainly peripheral) markets valued so low that their prices might be counted as the end of the world. It is often of high quality stocks of companies whose sales depend only on the developments in the euro area.

The Madrid or Milan stock exchange can literally find interesting stocks on the cheap. You can find such as oil giant Eni, Enel energy company Inditex or clothing that is very successful with its retail chain Zara. Regardless of how the debt trap got their domestic economy, businesses thrive and expand. While some investors may have to wait that markets will fall even more, now these companies are good investments.

Italian blue chips will survive, even if the euro fell apart

The first phase of the crisis has affected the smaller markets - Greece and Portugal, however, investors do not have much to offer, many large corporations would not find here. Once the negotiations started on rescue packages, their markets headed south.

Ireland was a different story. It was one of the five richest countries in the pre-crisis world. Its economy, however, are rather international companies, real estate companies and banks. In addition to Ryanair's many Irish companies are not large.

Eurokrize next phase is slightly different, the most affected European countries - Spain and Italy. Their stock markets have reacted similarly to smaller neighbors - fall. Italian MIB fell from 40,000 in 2007 to almost 14 000 (ie the level of 1994). The Spanish IBEX 35 is below 7000, compared with 15,000 before the crisis.

How to grow revenues of Spanish bonds, speculation that the government will need a rescue package is increasing and the market is back at 1999. More than a decade of growth scared investors wiped their sale.

In these markets, apart from Greece and Portugal, we find a global society. Besides the already mentioned example, the index includes the Milanese automaker Fiat or less well-known manufacturer of sun glasses Luxottica, which owns Ray-Ban Salvatore Ferragamo and luxury. Sells products around the world and experiencing a boom especially in Asia - a far cry from the recession hit Europe.

In Madrid, the trades such as Telefónica, expanding into fast-growing South African oil company and Repsol.

It is not difficult to understand why markets in these countries fell. Their economies are in deep recession, the savings required by European authorities continue to increase. Borrowing costs are rising.Investors in the prices of local shares accounted for the probability that the shares will be valued by the new (weak) currency.

After the interesting events and look around outside the euro area

For the success of the company may be subject to a growing economy. For example, Japan has shifted nearly two decades of nowhere, but such a fashion company Uniqlo has developed into one of the world's leading companies in the industry.

Britain is experiencing perhaps the longest ever recession, but companies such as ARM Holdings (supplied chips for smartphones, iPods, and iPads) make great strides.

Among the countries that had to take a rescue arm of the EU and other international institutions often emerge very good company. For example, Ireland's Ryanair shares during the greatest crisis fell to half value. If you had bought it, now you reap the fruit. The company exterminated the recession in the domestic economy as well as destroy or other strong companies with globally diversified activities.

If the eurozone falls apart, you reach the bottom of the shares

If Spain and Italy leave the euro, its banks may be closed for several days and trading on major exchanges may be suspended. If this happens, the stock is likely to fall a little below, but not by much, because the disaster on our rolls, it is largely included in the prices of shares. Unfortunately, it also possible that the shares are now the cheapest, so time will miss the best bargain.


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