Chillin' out till it needs to be funded
European companies like Siemens started depositing their cash instead of European Banks back in 2010 itself as the first wave of ABS collateral for ECB lending made them realise their strategy forward to include longer term Euro hedging. While Siemens and most others remain committed to the Euro, they stopped banking with their banks and now lend to the banks on suspect collateral or Italian / Greek Treasuries.
Even that connection albeit secured by collateral, is a tenuous one for Transnational Corporations like Siemens and hochtief, Belgian
Safran and Arcelor Mittal or French Vinci who apart from being part of globally resilient industries , have the business compunction to rebuild prompting J P Morgan to list them is Buy list for Equities likely to double this year. Many in the Euro Stoxx 5-0 belong to Swiww Franc origin and have suffered thru 2011 from the strength in the “CASSH bloc”
As Blackrock denoted the currencies rising against the Dollar thru 2008/9/10 Even though JP Morgan has jumped oevr to bet that the Euro might indeed not survive, there is less urgency about the Merkozy led Hellenic Summit olypics in 2012 than there waas sinc eMarch 2011 when European leaders met and fought publicly almost every week. The politics of the Euro may not weaken the currency yet there is nothing to stop the slow deterioration in the value of the Euro thru the year . Still European business may not follow the currency down. Its global business
Only 13 of the Euro Stoxx 50 are Finnancial Services companies and even among them Munich Re liely will not fall prey to the collateral damage from the crisis staying profitable and resilient to the big short. Of the other 37, Volkswagen, LVMH, Total repre
sent industries that have everyhting going for them and they can be global and regional leaders in their industry. The same holds for construction and aircraft engine companies mentioned above who are also known for good management and people skills
Renault, Vivendi, Nokia, Sanofi and L’Oreal have business model weaknesses that are quite different for the region’s crisis to note.
The 4 Telecom companies and the Vodafone entity outside the index are struggling with the Capital intensive investments in 4G, Spectrum and profitable revenue points in their large markets being out of reach does not help.
Deutsche Telekom’s troubles will not be helped or befuddled by the Euro which is jjust an exchange rate to them till it stabilizes and gets in a position to contribute positively to the bottomline on translation
BASF and Air Liquide, Carrefour and Group Danone represent sectors that are fairly buoyant and even the energy companies like Repsol, Eni and Enel could do well and are worth following
Schneider, SAP and Daimler have a good hold of their industries and are doing well