DAVID KARNI
HEAD OF PORTFOLIO MANAGEMENT
BCC RISPARMIO & PREVIDENZA
Score prediction: ITALY 1 – SPAIN 0
INVESTMENT INSIGHT:
Why can this time be different for the troubled path of Italian reforms?
We have one strong incentive that is the way the Recovery fund is connected to the start of several reforms, and one guarantee that is the presence of Mario Draghi as chief of the government.
This second one is crucial both for his well-established influence on the European tables, as recognised by the Spanish prime minister, and also because we are in a time where the leadership in Europe is weaker with Merkel at the final mile of her career and Macron near the electoral period in France.
In this lack of leadership, I think Draghi can play a major role to fight again against far right forces that lead some countries.
The macroeconomic impact of the recovery funds and the reforms will be meaningful.
Italian equity is also still one of the cheapest countries between European countries with a 13.2 forward 12M P/E compared with the 16.9 of the Eurozone.
In addition, Italy has a very interesting dividend yield, 4.2% compared to 2.8% of Eurozone. The dividend factor is making a comeback, globally +11% in contrast to last year -15% when dividends were one of the worst performing factors.
Many Italians companies pay rich dividends, even outside the banking sector, they should do well if the style rotation into value keeps on being in place throughout the second part of this year.
So, it’s really now the time to invest in Italy!
SALOMÉ BOUZAS ROMERO
MUTUAL FUND ANALYST & PORTFOLIO MANAGER
TRESSIS SV
Score prediction: ITALY 1 – SPAIN 2
INVESTMENT INSIGHT:
We are already in semifinals! And we face one of our greatest historical opponents in one of their best tournaments in the last years.
As we are both Mediterranean countries we have many things in common, but one in which Spain continues to lead Italy is the development of the 5G network.
As you may know, 5G is the name for a new mobile technology that improves the capabilities of the previous ones in terms of internet access. Particularly, 5G will favour the development of mobile broadbands connections, faster interaction between devices as well as massive communications between machines (internet of things).
Within this, I must say that Spain is the European Union member with the highest penetration rate of the FTTH network (fiber to home), also having 87% of the national territory cover with ultrafast broadband (while the European average is 60%).
Back in 2019, the DESI report (Digital Economy and Society Index), ranked Spain eighth among countries best prepared for 5G technology deployment, but two years later, this is already a fact and, for example, the first of September 2020, Telefonica, a Spanish company that is one of the largest telephone operators and mobile network providers in the world, turned on its 5G network, enabling almost 75% of Spain to have 5G coverage currently.
