European fundamentals intact despite Greece- Heartwood

Fundamentals underpinning European equities remain intact despite the ongoing Greece saga, according to Jaisal Pastakia, investment manager at Heartwood Investment Management.

European fundamentals intact despite Greece- Heartwood


Pastakia noted European equities markets have appreciated since December 2014, but have fallen 7% from the high achieved in mid-April.

“Nervousness surrounding Greece’s financing crisis and the increasing expectation of a negative outcome have contributed to market volatility,” he said. “We expect a Greek exit to be avoided, although we may see the imposition of capital controls. Nevertheless, at this time, sentiment appears to be driving markets and investors are seeing the breakdown of talks between Greece and its creditors as an opportunity for profit taking.”

“On balance, we do not believe that headline events alter the fundamental case for investing in European equities at the current time, notwithstanding that the situation is fluid and we are monitoring developments closely,” Pastakia continued.

“As the negotiations between Greece and its creditors proceed, we expect further market volatility,” he added. “However, depending on the nature of the outcome, we would potentially consider buying on market weakness if the fundamentals remain supportive.”