Footonomics by Jakobsen & Garnry #1

Footonomics by Jakobsen & Garnry #1

Equities 5 minutes to read
Peter Garnry

Chief Investment Strategist

Summary:  Today's Footonomics is about Italy vs Turkey which are playing the opening match tonight in Rome on the old Olympic stadium. Italy wins on misery index, but in real life football one should never count out Turkey. On equities the match is between Enel and QNB Finansbank, which the Italian utility wins 2-1 on better equity fundamentals. Steen's and Peter's prediction is that Azzurri wins 3-1.


Match: Italy vs Turkey

Macro: The Italian job vs. Turkish Delight

  • On the Misery Index it is an Italian win (CPI + Unemployment + Budget deficit) Italy +21 vs. Turkey 33, but both pretty miserable…
  • Turkey is ranked 12th in the world on GDP (PPP) vs. Italy 11th, let us call that a draw.

  • Italy has the biggest amount of draws at 16 in Championship and according to The Analyst AI based statistical prediction Italy has a 7.6% chance of winning tournament vs. Turkeys 0.4% a big win for Italy in this category.

  • Best football quotes: Italy: -Andre Pirlo: “Manager Roy Hodgson mispronounced my name. He called me “Pirla” (A term used in Milan dialect which roughly translate to “dickhead”) perhaps understanding my true nature more than any other manager)) vs. Turkey's Coach Faith Terim: “Statistics are like miniskirts because they don’t show you anything” – A draw in my book…

  • (courtesy of Althea on fixed income) The question is whether Turkey will be capable of breaking Italy’s strong defense, the bond market, with BTPS being oversubscribed at each auction as they offer the highest yield in the euro bloc. Do not expect Italy to move forward from their strong defense, which has not conceded a goal in eight straight games. Turkey needs to confide in its aggressive captain, Yilmaz, to score a goal and attract demand for the country’s paper yielding more than 17%.

As this is the first Footonomics, we will briefly describe our take on equities during the tournament. We have selected the largest publicly listed company on market capitalization for each country. Each company is scored on growth, valuation, and return on equity, and the combined fundamentals will decide the outcome of the match in equities. See the whole list of companies below. One thing to note is that the list is typical European dominated by boring value stocks. The only countries/companies that smell of the future and growth are ASML (Netherlands), Allegro.eu (Poland), and LVMH (France).

Equities: Enel vs QNB Finansbank

  • Enel wins 2-1 over QNB Finansbank, as the Italian utility is cheaper on valuation (13.5 vs 56.3 on 24-month forward P/E ratio) and has a better return on equity (16.0% vs 14.0%). QNB Finansbank scores on a slightly higher expected growth rate (2.9% vs 2.6%).

  • Enel is like so many other European utilities doing a green transition away from the old oil and gas business. In 2019 more than half of the group’s total energy generation came from renewable energy sources.

  • QNB Finansbank is operating under very difficult monetary and fiscal policies combined with the region’s highest inflation. However, the 14.9% return on equity is quite impressive when compared to many European bank.

Quarterly Outlook

01 /

  • Upending the global order at blinding speed

    Quarterly Outlook

    Upending the global order at blinding speed

    John J. Hardy

    Global Head of Macro Strategy

    We are witnessing a once-in-a-lifetime shredding of the global order. As the new order takes shape, ...
  • Equity outlook: The high cost of global fragmentation for US portfolios

    Quarterly Outlook

    Equity outlook: The high cost of global fragmentation for US portfolios

    Charu Chanana

    Chief Investment Strategist

  • Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever

    Quarterly Outlook

    Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever

    Jacob Falkencrone

    Global Head of Investment Strategy

  • Commodity Outlook: Commodities rally despite global uncertainty

    Quarterly Outlook

    Commodity Outlook: Commodities rally despite global uncertainty

    Ole Hansen

    Head of Commodity Strategy

  • Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?

    Quarterly Outlook

    Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?

    John J. Hardy

    Global Head of Macro Strategy

  • Equity Outlook: The ride just got rougher

    Quarterly Outlook

    Equity Outlook: The ride just got rougher

    Charu Chanana

    Chief Investment Strategist

  • China Outlook: The choice between retaliation or de-escalation

    Quarterly Outlook

    China Outlook: The choice between retaliation or de-escalation

    Charu Chanana

    Chief Investment Strategist

  • Commodity Outlook: A bumpy road ahead calls for diversification

    Quarterly Outlook

    Commodity Outlook: A bumpy road ahead calls for diversification

    Ole Hansen

    Head of Commodity Strategy

  • FX outlook: Tariffs drive USD strength, until...?

    Quarterly Outlook

    FX outlook: Tariffs drive USD strength, until...?

    John J. Hardy

    Global Head of Macro Strategy

  • Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Quarterly Outlook

    Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Althea Spinozzi

    Head of Fixed Income Strategy

The information on or via the website is provided to you by Saxo Bank (Switzerland) Ltd. (“Saxo Bank”) for educational and information purposes only. The information should not be construed as an offer or recommendation to enter into any transaction or any particular service, nor should the contents be construed as advice of any other kind, for example of a tax or legal nature.

All trading carries risk. Loses can exceed deposits on margin products. You should consider whether you understand how our products work and whether you can afford to take the high risk of losing your money.

Saxo Bank does not guarantee the accuracy, completeness, or usefulness of any information provided and shall not be responsible for any errors or omissions or for any losses or damages resulting from the use of such information.

The content of this website represents marketing material and is not the result of financial analysis or research. It has therefore has not been prepared in accordance with directives designed to promote the independence of financial/investment research and is not subject to any prohibition on dealing ahead of the dissemination of financial/investment research.

Saxo Bank (Schweiz) AG
The Circle 38
CH-8058
Zürich-Flughafen
Switzerland

Contact Saxo

Select region

Switzerland
Switzerland

All trading carries risk. Losses can exceed deposits on margin products. You should consider whether you understand how our products work and whether you can afford to take the high risk of losing your money. To help you understand the risks involved we have put together a general Risk Warning series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. The KIDs can be accessed within the trading platform. Please note that the full prospectus can be obtained free of charge from Saxo Bank (Switzerland) Ltd. or the issuer.

This website can be accessed worldwide however the information on the website is related to Saxo Bank (Switzerland) Ltd. All clients will directly engage with Saxo Bank (Switzerland) Ltd. and all client agreements will be entered into with Saxo Bank (Switzerland) Ltd. and thus governed by Swiss Law. 

The content of this website represents marketing material and has not been notified or submitted to any supervisory authority.

If you contact Saxo Bank (Switzerland) Ltd. or visit this website, you acknowledge and agree that any data that you transmit to Saxo Bank (Switzerland) Ltd., either through this website, by telephone or by any other means of communication (e.g. e-mail), may be collected or recorded and transferred to other Saxo Bank Group companies or third parties in Switzerland or abroad and may be stored or otherwise processed by them or Saxo Bank (Switzerland) Ltd. You release Saxo Bank (Switzerland) Ltd. from its obligations under Swiss banking and securities dealer secrecies and, to the extent permitted by law, data protection laws as well as other laws and obligations to protect privacy. Saxo Bank (Switzerland) Ltd. has implemented appropriate technical and organizational measures to protect data from unauthorized processing and disclosure and applies appropriate safeguards to guarantee adequate protection of such data.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc.