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Macron’s strong mandate splits French selectors

Macron’s strong mandate splits French selectors

PARIS: French selectors are staying cautious despite Emmanuel Macron on course to consolidate his power following a strong performance in parliamentary elections.

The newly-elected President is set to return a majority in the French Parliament but a poll at Citywire Paris 2017 found that asset allocators in the country are more cautious.

In response to a question on how the independent candidate’s performance impacted risk budgets, 31% said it was only a slight improvement but gave them a more bullish outlook, while 31% said it was too early to tell.

Only a modicum of respondents (15%) said they would be adding risk in the wake of Macron’s victory, while 23% they would be making no changes as they were already well-positioned.

Attendees were asked which topic would cause the most concern if it was the still leading headlines one year from now, 58% said they would be fearful if Brexit negotiations continued to dominate.

This is while 25% were mindful of Chinese growth slowdown talks, while Donald Trump's rhetoric and eurozone instability both received 8% of the vote.

Delegates were also asked about asset allocation ideas, with 38% saying they would be most positive on European equities over the next six months.

This was ahead of emerging markets (23%), thematic (15%) and Asia Pacific equities (15%). Global equities got 9% and nobody voted for North American stocks.

Meanwhile, within fixed income, 44% said they would be keen to add to allocations in high yield debt. This led the field ahead emerging market debt, which accrued 33% of the vote.

Further down the list, 11% said they were backing convertible bonds and US dollar debt, respectively, while there were zero votes for corporate bonds or European bonds.

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