Corporate Finance, DeFi, Blockchain, Web3 News
Corporate Finance, DeFi, Blockchain News

2016: about blockchain, Solvency II and double digits

By Patrick Lemmens – ROBECO.

2016: about blockchain, Solvency II and double digits
After quite a volatile 2015 and a significant sell-off in December, we are rather optimistic on the outlook for financial equities in 2016, even seeing potential for double digit returns.
Speed read:
- Double digit return potential for financial equities in 2016
- Life insurers and digital finance are attractive areas
- Blockchain is not disruptive, but will separate winners from losers

Our basis macro-economic scenario for 2016 is one of moderate global growth and low inflation. We don’t expect very high growth numbers in neither developed nor emerging markets. US economic growth will be reasonable, with the Fed gradually hiking interest rates and long-term rates showing perhaps an even more modest increase. Most euro zone economies will be okay, with Ireland as a clear positive outlier.

We expect interest rate hikes in the US, Canada, Australia and the Nordics, but these have already been priced in. Loan growth will not be very large. Many banks, such as US bank Wells Fargo, are already resorting to buying loan portfolios in order to grow.

Be careful with banks
We are very cautious about banks. Most of the uncertainty about regulations is over now, which is a clear positive. However, much of this has already priced in and with the upcoming presidential elections in the US, there is a lot of rhetoric about banks. We are underweight banks in developed markets. We do have Bank of Ireland, which is a leading bank in a country whose economy is clearly recovering. In Japan, we have a position in Suruga Bank, which offers mortgages, a product that is hard to find elsewhere in Japan.

We have several emerging market banks in the portfolio. These are the higher-quality banks with a valuation discount, located in growing emerging countries.

Emerging Finance: a bumpy ride
This brings us to the first trend in our portfolio: Emerging Finance. The Emerging Finance trend focuses on the growth of the global middle class. In emerging markets the middle class is growing fastest while financial penetration is still very low.

We expect this trend to have a relatively difficult time in 2016. The beginning of this year was a clear illustration of the current volatility in emerging markets. On balance, though, we expect a plus this year, mainly because of the very low valuations of the stocks in this trend.

The portfolio has 30% exposure to the Emerging Finance trend, of which around 16% is invested directly in emerging markets.

Aging Finance: all lights are green for insurers
The second trend in the portfolio, Aging Finance, is about the need for financial lifecycle planning. An important part is how to build enough savings to retire comfortably. Many of our investments are pension or life insurance related. 35% of the portfolio is invested in stocks related to the Aging Finance trend.

Aging Finance stocks had a difficult time in 2015, mainly because of the problems life insurers were facing. Interest rates were supposed to rise, but didn’t, which negatively affected insurers. In addition, European insurers faced uncertainty about Solvency II. Both negative factors will turn positive in 2016, as interest rates are likely to rise (somewhat at least) and Solvency II will be introduced, putting a stop to the uncertainty surrounding this new regulation. An additional positive factor is the very low valuation of insurance stocks.

Three consequences of Solvency II
As for Solvency II, we foresee three main consequences of this new standard. First of all, the number of mergers & acquisitions in insurance will rise. Insurers will have a fresh look at their portfolio and swap parts of their operations that will not be profitable anymore for other, more attractive businesses. Second, there will be certainty about the dividend companies can pay out. We do not expect many insurers will be required to do a capital raising. Third, there will be an increasing focus on capital-light models in the next ten or so years. There still isn’t a good offering for the ‘mid-income’ category (EUR 50-500k), which has too little money for private banking and too much to be contented with ETFs or robo-advisors. The mid-income category is a growing market, presenting huge opportunities. St. James is a good example of a company that meets this growing need. Fintech companies can also play an important part here.

For asset managers the climate will be challenging. The level of assets will be under pressure, especially in fixed income investments. Assets under management are likely to either stay the same or decline, depressing earnings. Valuations are also quite lofty. On a positive note, the long-term asset base is growing as there will be an increasing need for Defined Contribution solutions. This segment will be serviced by asset managers, insurers and banks, with the help of Fintech solutions. We are invested in asset managers that can bring in new money, such as KKR, and turnaround stories.

Digital Finance: blockchain is the buzz word
Digital Finance was hot in 2015 and it will remain so in 2016. It was the best performing trend in the portfolio last year. This year, growth will remain strong while consolidation is heating up. Although at first this will happen in the US, we would not be surprised if a global deal would be struck in 2016. Will banks be completely replaced by Apple, Google and Amazon? Will all bank branches disappear? No, but we do see significant changes coming to the financial industry which will look very different ten years from now. There will be stronger differences between winners and losers.

The investment community is becoming increasingly aware of the possibilities of digital payment, security solutions and blockchain. Whereas Fintech was last year’s buzz word, this year it will be blockchain. A blockchain is a carefully cryptographically protected, public ledger. It is like a super-advanced, cloud-based spreadsheet, which is maintained by its users. By far the most famous implementation of blockchain is in the transaction procedures for cryptocurrencies like bitcoin.

The blockchain technology is widely expected to reduce the need for intermediaries like banks. Currently, there is only one user case, i.e. a business model that actually works on blockchain technology: the NASDAQ blockchain user case for managing shares of private companies called Linq. In 2016 we expect to see more user cases. One of the most likely leading groups for blockchain development is R3 CEV, which connects 51 global banks but also regulators, central banks and ministries of finance.

Don’t fear Fintech, embrace it to grow
We do not think blockchain and other Fintech technologies will be disruptive, but rather expect existing parties to cooperate with Fintech companies to make their operations more efficient or client-friendly. Platforms like MasterCard and Visa are here to stay. It is important to be selective, though. We like companies that embrace the Digital Revolution, for example by downsizing their back offices and introducing blockchain processes.

35% of our portfolio is invested in Digital Finance, of which 21.5% is in non-financials or Fintech. The latter percentage includes more traditional investments such as Visa, MasterCard and Alliance Data Systems, which have been in the portfolio since 2008. We also invest in the suppliers of technology, such as Temenos, a Swiss supplier of banking software systems, and Earthport, which provides white-label cross-border payments services to banks and other financial institutions.

Conclusion: double digit upside potential
With the first Fed rate hike behind us and 1-3 further hikes expected, a lot is already priced into especially US bank stocks. Other developed markets banks such as in Canada, Australia, the Nordics and even Japan look fully valued. As there is relatively little loan growth, higher rates offer the main hope for further performance. A steeper yield curve would also benefit life insurers across the globe and valuations there are a lot more reasonable. Most of our Financials continue to trade on very attractive valuations. The sell-off in December has now created what we believe is a double digit upside potential.

If long-term interest rates were to rise gradually the upside for the sector would increase. Very interesting investment areas are life insurance and certain diversified financials. Our investments in the Fintech space, such as electronic/ mobile payments and financial services IT, have been steadily growing.

Robeco New World Financial Equities is a long-term investment, which is interesting for investors who believe in the strength of the Emerging, Aging and Digital Finance trends. Taking an even longer term horizon, we expect regulations, low valuations and digitization to turn the financial sector into one of the most important sectors in 10 or 20 years’ time.

DEVISES : Cotations + Taux + Convertisseur

The Forex Quotes are Powered by Forexpros - The Leading Financial Portal.

ForexProsThe Exchange Rates are powered by Forexpros - The Leading Financial Portal.

The Currency Converter Powered by Forexpros - The Leading Financial Portal

BOURSE : Indices + CAC40 + MP

Live World Indices are Powered by Forexpros - The Leading Financial Portal.

The Commodity Prices Powered by Forexpros - The Leading Financial Portal.


L'ordonnance du 20 août 2014 (n°2014-947) a introduit deux taux différents, l'un s'appliquant aux créanciers personnes physiques n'agissant pas pour des besoins professionnels, l'autre "pour tous les autres cas".

Le gouvernement a également instauré un calcul semestriel du taux légal calculé "en fonction du taux directeur de la Banque centrale européenne sur les opérations principales de refinancement et des taux pratiqués par les établissements de crédit et les sociétés de financement".

Comme prévu par l'article 2 de l'ordonnance du 20 août 2014, les deux nouveaux taux ont été fixés par arrêté pour leur entrée en vigueur dès le 1er janvier 2015.

L'arrêté du 23 décembre 2014 publié au JO le 27 décembre 2014 indique ainsi que :
"Pour le premier semestre 2015, le taux de l'intérêt légal est fixé :
1° Pour les créances des personnes physiques n'agissant pas pour des besoins professionnels : à 4,06% ;
2° Pour tous les autres cas : à 0,93%."

Rappelons que :
- En 2014, il était de 0,04%
- En 2013, il était de 0,04%
- En 2012, il était de 0,71%
- En 2011, il était de 0,38%
- En 2010, il était de 0,65%
- En 2009, il était de 3,79%
- En 2008, il était de 3,99%
- En 2007, il était de 2,95 %

Lisez notre article "Taux d'intérêt légal et taux interbancaires (définitions et historiques)" en suivant ce lien

Taux quotidiens (Mise à jour quotidienne, tableau fourni par la Banque de France)
Moyennes mensuelles (Mise à jour mensuelle, tableau fourni par la Banque de France)
* Moyennes calculées avec le nombre de jours calendaires du mois

Notes :

- Euro Overnight Index Average (EONIA) : taux calculé par la BCE et diffusé par la FBE (Fédération Bancaire de l'Union Européenne). Il résulte de la moyenne pondérée de toutes les transactions au jour le jour de prêts non garantis réalisées par les banques retenues pour le calcul de l'euribor.

- Euro Interbank Offered Rate (EURIBOR) : taux interbancaire offert entre banques de meilleures signatures pour la rémunération de dépôts dans la zone euro. Il est calculé en effectuant une moyenne quotidienne des taux prêteurs sur 13 échéances communiqués par un échantillon de 57 établissements bancaires les plus actifs de la zone Euro. Il est calculé sur la base de 360 jours et est diffusé à 11h le matin si au moins 50% des établissements constituant l'échantillon ont effectivement fourni une contribution. La moyenne est effectuée après élimination des 15% de cotation extrêmes (le nombre éliminé est toujours arrondi) et exprimée avec trois décimales.

Tableaux et historiques des TAUX D'INTERET DU MARCHE INTERBANCAIRE DE LA ZONE EURO édités par la Banque de France

Taux de référence des bons du Trésor et OAT

Taux quotidiens (Mise à jour quotidienne, tableau fourni par la Banque de France)
Moyennes mensuelles (Mise à jour mensuelle, tableau fourni par la Banque de France)
* Moyennes calculées avec le nombre de jours calendaires du mois

Tableaux et historiques des taux de référence des bons du Trésor et OAT édités par la Banque de France


Indices Quotidiens TEC-N (Mise à jour quotidienne, tableau fourni par la Banque de France)

Description : L’indice quotidien CNO-TEC n, Taux de l’Echéance Constante n ans, pour n variant de 1 à 30, est le taux de rendement actuariel d’une valeur du Trésor fictive dont la durée de vie serait à chaque instant égale à n années.

Ce taux est obtenu par interpolation linéaire entre les taux de rendement actuariels annuels des 2 valeurs du Trésor qui encadrent au plus proche la maturité n.

Les historiques, réunis en un seul fichier, sont accessibles ici sur le site de la Banque de France.

Indices Hebdomadaires (Mise à jour hebdomadaire, tableau fourni par la Banque de France)

Notice : (description et calcul)
THO : Taux hebdomadaire du marché primaire des émissions à plus de 7 ans (TEC 10 +0,25%)
THE : Taux hebdomadaire des emprunts d'Etat ayant une échéance de plus de 7 ans (TEC 10 +0,05%)
FELT : Rendement secondaire des emprunts d'Etat à plus de 7 ans (TEC 10 +0,05%)
FECT : Rendement secondaire des emprunts d'Etat entre 3 et 7 ans (TEC 5 +0,05%)
PRLT : Rendement secondaire des emprunts du secteur privé à plus de 7 ans (TEC 10 +0,25%)
PUCT : Rendement secondaire des emprunts du secteur public de 3 à 7 ans (TEC 5 +0,25%)
PULT : Rendement secondaire des emprunts du secteur public à plus de 7 ans (TEC 10 +0,25%)

Les historiques, réunis en un seul fichier, sont accessibles ici sur le site de la Banque de France.

Indices mensuels (Mise à jour mensuelle, tableau fourni par la Banque de France)

Description :
TMO : Moyenne arithmétique des THO du mois
TMB : Moyenne arithmétique des THB du mois ( THB = Taux Hebdomadaire d'adjudication des Bons du trésor à 13 semaines)
TME : Moyenne arithmétique des THE du mois

Les historiques, réunis en un seul fichier, sont accessibles ici sur le site de la Banque de France.

Tableaux et historiques des INDICES OBLIGATAIRES édités par la Banque de France


Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data .

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.


Les commentaires et avis d'experts figurant dans cette série d'articles publiés par Finyear sont émis à titre d’information et ne doivent pas être considérés comme un conseil d’investissement.

Plus particulièrement, les contenus figurant sur ce site Internet ne sauraient être interprétés comme des conseils fournis ou approuvés par tout membre du Groupe Finyear, ou comme une sollicitation ou une incitation à souscrire, vendre ou acheter un quelconque instrument financier.

Les analyses et opinions exprimées sont celles des sociétés et experts référencés dans chaque article à la date indiquée et sont susceptibles de changer à tout moment. Toutes projections économiques ou prévisions figurant dans ces articles document reflètent les hypothèses et jugements subjectifs des auteurs. Des événements imprévus peuvent se produire.
Ces commentaires et avis sont fournis uniquement à des fins d’information aux prestataires de services d’investissement ou aux autres professionnels ou investisseurs qualifiés.

Le site Internet ne contient aucun conseil financier, fiscal ou commercial, ni aucun conseil en investissement ou autre conseil proposé ou recommandé par le Groupe Finyear (et ne doit pas être interprété comme fournissant de tels conseils), et ne doit pas être considéré comme une liste des cours de placement, ni comme une offre, une incitation ou une sollicitation, en vue de la souscription, l'achat ou la vente de tout instrument financier.

Toute personne prenant une décision d'investissement en se fondant sur des informations disponibles sur agit à ses propres risques, et Finyear (y compris ses filiales) ne saurait en aucun cas être tenue responsable de toute perte subie de ce fait.

Tous les efforts ont été fournis afin de s’assurer de la justesse de l’information délivrée mais aucune assurance ou garantie ne peut être donnée.

Les médias du groupe Finyear

Mercredi 20 Janvier 2016