Important factors that make European stock markets attractive

Since European countries gradually eased their lockdown measures due to the easing of the Covid-19 epidemic situation. The European economy continued to recover. But when tensions between Russia and Ukraine may be prolonged Investors are increasingly questioning how much the European economy will recover and whether it will affect the stock market. Because the European economy has a fairly close relationship with Russia.

In January 2022, the International Monetary Fund (IMF) forecasts European economic growth (GDP) this year at 3.9%, with the view that it will continue to benefit from the ability of European economies to Open the country and make the economy recover. And if you look at country by country, such as Germany, the IMF estimates that GDP in 2022 will grow 3.8%, France 3.5%, Italy 3.8%, which is the same economic growth rate as before the epidemic.

The latest announced inflation rate is 5.8%, which is quite high compared to the epidemic period. The main factor is the rising energy prices. While the policy interest rate has not moved in the near term.

For the acquisition of assets (QE Taper) European Central Bank It plans to acquire assets in an APP (Asset Purchase Program) at a monthly rate of 40 billion euros in April 30 billion euros in May and 20 billion euros in June. The acquisition of assets in the third quarter will depend mainly on the development of economic numbers.

An important interest if interested in investing in European stock markets is the performance of listed companies. During February 2022, the EURO STOXX600 index reported strong listed company profits. and higher than the analysts had predicted. Including stocks, insurance groups, banking groups, utilities

Bloomberg estimates that the profits of European listed companies (Excluding the UK) was revised up to more than listed company earnings worldwide. especially since the beginning of this year Demonstrates strong earnings prospects for European stocks. Although since the beginning of the year European stock markets have declined following the US stock market. but can recover quickly This shows that investors are waiting to buy in the stock market with strong fundamental support.

Meanwhile, European stock markets are also a leader in sustainable investment, ESG-based investments, noting that MSCI Europe-listed companies have been assessed their ESG Score higher than those of global listed companies.

In addition, if comparing the appropriate price level based on fundamental factors from P/E Ratio, P/BV Ratio), profit growth and dividend ratio Found that the European stock market is one of the most attractive in developed countries.

for investment strategy Should focus on investing in industry-leading businesses to increase the chances of generating long-term returns. with stable business operations and long-term growth, such as the technology group Medical group, banking group or focusing on investing in stocks that operate ESG business and businesses that benefit from the aging society such as medical equipment and tools, insurance, etc.

Although tensions between Russia and Ukraine remain uncertain but it is estimated that it will affect the European economy in the short term. And may affect the Sentiment of the stock market. However, from various positive factors, the European economy continues to recover. In addition, the share price is still at an attractive level and there are various investment businesses to choose from. European stock markets are therefore an alternative for long-term investors.