Market analysis: Politics is calling again
During the last month, we recognised that the political momentum is gaining strength within our capital markets once again. Besides the elections in Germany and Austria, we saw some workouts of the promises of French winner Emanuel Macron, Theresa May coming increasingly under Brexit-pressure and a freedom-seeking separatist movement in Spain's Catalonia which put the ever implausible agitating of Donald Trump in the shadows.
It is interesting that all these political events have been accompanied by strong economic data that could offset the negative market effects after a short while and allowed the equity markets to stay within good performance levels. Even a visible turn to the "Right" through the most likely formation of a new Austrian government after the elections, had no negative impact on the Austrian stock exchange.
Fact is that we are in the phase of a good economic development in Europe which is accompanied by improving basic conditions. The unemployment rate sank, direct investments are expanding just as are the company earnings. Additional to the intact private consumption, we see the interest rates still at extremely low levels and therefore economically motivated financing stays supported.
In Austria we have to wait for the programme of the newly structured government and, once set up, monitor closely the implications with regards to our capital markets. But Austria's companies have already been ahead via proactive investing and extension of their appropriate market shares, thus creating performance without political support. It should not be so difficult for politicians to build on that positive movement, so we can expect some positive triggers arising and additionally the topic of "eastern" Europe is coming to the fore among international investor’s attention. These markets are already delivering excellent economic data. It is just a question of time for this development of attention to fully reach the Austrian stock exchange.
Wolfgang Matejka, CEFA
Managing Director of Matejka & Partner Asset Management GmbH
13 November 2017
Wiener Börse AG would explicitly like to point out that the data and calculations given in this report are historic values, which do not permit any conclusions as regards future developments or value stability. Price fluctuations and loss of capital are possible in securities trading. The contribution is the personal opinion of the analyst and does not constitute a financial analysis or a recommendation for investment by the exchange operating company, Wiener Börse AG.