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This morning, the major European stock markets opened lower. Protests in major Chinese cities are rekindling investors’ concerns about China’s growth. Nevertheless, Paris and London retain their positions as the largest financial powers in Europe.
This weekend, numerous demonstrations took place in Chinese cities, including Shanghai, to protest against the drastic restrictions linked to covid 19. These protests are spooking investors, who fear for the growth of the world’s second largest economy.
Initial futures contracts show a decline of 0,55 % for the Paris CAC 40, 0,47 % for the Dax in Frankfurt, 0,54 % for the FTSE in London and 0,43% for the EuroStoxx 50. On the Asian side, the CSI 300 index of large caps in mainland China lost 1,1% and Shanghai’s SSE Composite lost 0,8%. In Hong Kong, the Hang Seng fell 1,73%.
According to a financial analyst, “much tighter restrictions coupled with economic turmoil are more likely in the coming weeks than a sudden easing of restrictions.”
London and Paris remain favorites
In a volatile environment, the two leading European stock exchanges are maintaining their leading status. However, a capitalization race has begun between Europe’s two largest financial powers. Last week, Paris placed ahead of London: a historic first. However, the City remains the favorite of investors.
France’s CAC All Shares index is now worth nearly $3 trillion, making it Europe’s largest stock market in terms of value, thanks to the market valuation of luxury companies. London’s FTSE All Share Index is worth $2,8 trillion according to Refinitiv data.
Britain, the gold star of investors
But so far in 2022, funds invested in U.K. equities have seen record highs of €23 billion (about $24 billion), up from nearly €18 billion last year, according to Refinitiv Lipper. Annual outflows from French equity funds are much lower: €2 billion this year.
Despite a higher capitalization for the Paris Stock Exchange, London remains a far more important destination in terms of the number and volume of IPOs.
After recording its second strongest year for company listings since 2007 in 2021, the London stock exchange has seen 41 IPOs with a total transaction value of €1,18 billion ($1,22 billion) with just a few weeks left in 2022. This is more than double the €474 million raised via 11 IPOs in Paris, according to Dealogic.
Paris supported by the luxury sector
In a volatile stock market environment, Paris can count on significant private holdings in its companies to maintain a certain stability.
Indeed, the three largest shareholders are the Arnault family, which owns half of LVMH, which in February 2021 will become the largest listed company in Europe, the Hermès family and the French government. For its part, the world’s largest asset manager, Blackrock, is leading the way in London.
Dividends and currencies
London is a big winner when it comes to dividends. In the third quarter, British companies paid out $28.7 billion, more than seven times the total paid in France. It is also important to note that currency comes into play as London’s market size, expressed in pounds, is measured in dollars compared to Paris’ market size, expressed in euros. The British pound has fallen about 11% against the U.S. dollar this year, while the euro has lost about 9%.
Read also >Paris becomes the leading European stock exchange
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This morning, the major European stock markets opened lower. Protests in major Chinese cities are rekindling investors’ concerns about China’s growth. Nevertheless, Paris and London retain their positions as the largest financial powers in Europe.
This weekend, numerous demonstrations took place in Chinese cities, including Shanghai, to protest against the drastic restrictions linked to covid 19. These protests are spooking investors, who fear for the growth of the world’s second largest economy.
Initial futures contracts show a decline of 0,55 % for the Paris CAC 40, 0,47 % for the Dax in Frankfurt, 0,54 % for the FTSE in London and 0,43% for the EuroStoxx 50. On the Asian side, the CSI 300 index of large caps in mainland China lost 1,1% and Shanghai’s SSE Composite lost 0,8%. In Hong Kong, the Hang Seng fell 1,73%.
According to a financial analyst, “much tighter restrictions coupled with economic turmoil are more likely in the coming weeks than a sudden easing of restrictions.”
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This morning, the major European stock markets opened lower. Protests in major Chinese cities are rekindling investors’ concerns about China’s growth. Nevertheless, Paris and London retain their positions as the largest financial powers in Europe.
This weekend, numerous demonstrations took place in Chinese cities, including Shanghai, to protest against the drastic restrictions linked to covid 19. These protests are spooking investors, who fear for the growth of the world’s second largest economy.
Initial futures contracts show a decline of 0,55 % for the Paris CAC 40, 0,47 % for the Dax in Frankfurt, 0,54 % for the FTSE in London and 0,43% for the EuroStoxx 50. On the Asian side, the CSI 300 index of large caps in mainland China lost 1,1% and Shanghai’s SSE Composite lost 0,8%. In Hong Kong, the Hang Seng fell 1,73%.
According to a financial analyst, “much tighter restrictions coupled with economic turmoil are more likely in the coming weeks than a sudden easing of restrictions.”
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