European stock market: Is it an alternative for Peruvian investors in 2022? | YOUR MONEY

“The Peruvian investor still finds it difficult to take the step, because he does not feel comfortable with equities, in general; and with the alternatives further away from his region, less. For now there is a bias to invest in the United States; However, maintaining part of the resources in the European portfolio can benefit the investor due to two types of revaluations, on the one hand the one that the stock market usually gives in the long term, but also due to the strengthening that we expect of the euro against other currencies “, he claimed.

Long term

The long-term investor could opt for those sectors that are beginning to have a lower performance this year, but that still have good prospects, especially in the future in the European market, he said.

Among the sectors that are failing to capture flows in 2022 is technology. “The flows are leaving sectors that have had the best performance in recent years, such as technology. In Europe, this sector, together with the industrial sector, is the one with the worst performance so far this year. This can finally be a long-term investment opportunity, ”he told Gestión.pe.

He top pick for this sector in Europe, according to Renta4, it is ASML (manufacturer of equipment for semiconductor production), although they are also contemplated among other options such as adyen (a means of payment company), which has experienced rapid growth in recent years.

“ASML is a near monopoly in the semiconductor equipment business. We have good prospects for this company because we expect it to benefit from the increase in use and new needs for chips along with a more scarce supply of these. As for Adyen, it is expected that it will not take long for him to capture an important part of the business of the banking sector due to the technological facilities that he has given, above all, to retail companies”, he affirmed.

With respect to industrial sector, the top pick is Rentokil Initial (pest control company), also counting on Siemens AG and Atlas Copco. “Their prospects for future growth are quite encouraging, and they have the plus of being global companies; that is to say, they have a diversification of sales”, said Galán.

In the same way, the electricity, consumption and health sectors have seen significant falls in the value of the shares in some of their companies, despite this, Galán indicated, certain options are handled.

He health top pick It is the medical equipment company Siemens Healthineers, but there are also good prospects for companies in the pharmaceutical sector such as the Swiss Roche, the English Astrazeneca or the French Sanofi. “The pharmaceutical sector gives us sustainability and visibility of results, and resistance to economic cycles,” he specified.

In consumption, the top pick It is Adidas AG and luxury companies such as Louis Vuitton and Gucci are also considered. “These are companies that sell their products worldwide and we believe that they will continue to benefit above all from the increase in the population with higher incomes,” he said.

Short term

According to Galán, in a short-term horizon (understood as a term of less than three years), speculative investors should be guided by options linked to finance and raw materials, since there are good prospects for this year.

Within the package of alternatives, companies linked to oil and copper have had a strong rebound as a sector this year. “There are strong capital flows coming into the oil and commodities sector in general due to high commodity prices,” he said.

He top pick (best option to invest) for the mining sector is the Swiss Glencore PLC, but Anglo American (known in Peru for the Quellaveco project) and Antofagasta (which is Chilean, but is listed on the London Stock Exchange) are also being handled as options. About oil, the top pick is TotalEnergies and Shell PLC is also considered as an option.

With the information at the beginning of the year, in a context of inflation and high interest rates in Europe, the sectors that are also estimated to benefit are banking and insurance. “These are the sectors that have rebounded the most so far this year, taking advantage of rising interest rates,” he said.

In short

According to the Renta4 analyst, for the European market, one-year investments have a 26% probability of having negative returns, in a five-year term the figure is reduced to 23% and in ten years it is 12%. On the other hand, with investments with a horizon of 15 or 20 years, the probability is reduced to 0%.