Fed starts to withdraw from its liquidity boosting plan. China is also trying to cool its economy fuled by the excessive liquidity injected by CB. Is that an evidence that the governments belive the recovery on track, or they are forced to do so by the increasing inflation expectations? That's a question which will be answered in the rest of the year.
The Macro econ is indeed getting better. All the key datas has shown the signs of recovery though at a tepid pace. The investors are overcautious now. They may overract to all kinds unexpected economics events.
A slight improving economy + cautions investors = indecision. The market may repeat its story of 2004 by going no where. Stock picking is getting harder in this market. I am still bullish on Chinese Agriculture industry. This sector will benfit from the Chinese econmy restructuring in long term.
In addtion, U.S large Cap & Blue chips are good for value investors as their earnings withstand the tough times. Now their margin will again improve along with the recovery of the world economy.
european domestic banks are trading at c 1.2X BV, european life at c0.9-1 X BV. if ing were trading as a bank it implies ing is selling its insurance units almost for free, which is not justified. please be noted delta lloyd was ipo'd at c 0.7X BV. fewer and fewer are seeing ing as a short term forced seller. ing managed to mess insurance units p&l with impairment and lapse provisions so no one dares even to gang for a fire price sale. when you are using the same information to discount the share price again and again and again probably it is time to go for it
in medium term ing still offers big upside. AIA was sold at 1.7X EV, assuming matured markets business sold at 0.8X EV, emerging markets sold at 1.5X EV, banking trading at 1X BV, ing's fair value should be at least cEUR 9.0 under a moderate macro
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