Emmanuel Macron’s victory in the French presidential election is a relief for investors. Some feared that a possible victory by far-right Marine Le Pen would stir up European markets. According to Bloomberg, the election of Le Pen threatened to lead to a possible fall in the euro comparable to Brexit.
“In the short term, the euro should benefit from this election in particular,” Frederic Leroux, a member of the Carmignac Gestion Strategic Investment Committee, told Bloomberg.
In 2017, Le Pen dropped calls for France to give up the euro. On the other hand, she is still pushing for a referendum on the constitution – she demanded that French law take precedence over EU rules. At the same time, it wanted to restore permanent border controls in the Schengen area, which is contrary to current laws.
In addition to the euro, French bonds will also benefit from Macron’s defense. This was also confirmed by Emmanuel Cau, head of European equity strategy at Barclays. According to him, the shareholders of French banks can also enjoy Macron’s victory. Fabio Caldato, a partner at Olympia Wealth Management, shared Bloomberg’s views. “European investors are having fun after the French exit poles: a potential black Monday has not taken place.”
Macron’s triumph is recording toll operators
Shares of French banks such as BNP Paribas SA and Société Générale SA, which have benefited from closer EU integration, are likely to respond positively to Macron’s re-election. The 44-year-old president has pledged to continue working to make France a cornerstone of a stronger and more integrated EU.
Although the French political risk will not completely disappear, the main obstacle has been overcome. Thanks to this, local investors can relax.
Michael Metcalfe, State Street Global Markets
Macron’s success also plays into the toll companies, such as Vinci and Eiffage SA. Le Pen has pledged to nationalize the country’s motorways, which would mean financial losses for private companies and their shareholders in the future.
According to Bloomberg, Macron’s victory will also benefit energy companies such as Électricité de France and Engie or construction companies such as Bouygues – and especially their shareholders, who should not be afraid of the collapse of these companies now.
“Macron’s re-election is not a big surprise, but it should be a relief,” Cau of Barclays said, adding that shares in French banks would be particularly successful.
France is preparing for parliamentary elections
According to the French Ministry of the Interior, Macron won 58.55 percent of the vote in Sunday’s second round, ahead of Le Pen by 17 percent. The nationalist leader admitted defeat in a speech to her supporters in Paris.
The challenge for Macrona over the next five years will be to gain support for its plans to increase the country’s competitiveness by redesigning social policy. It is mainly about pension reform and economic expansion.
Although the presidential election reassured investors, another election will take place in France in June, this time a parliamentary one. And you too will be closely monitored by financial analysts and stockholders. Macron’s current victory has shown that the country is more divided than five years ago. The number of nationalists is increasing and Le Pen has improved significantly this year compared to the previous elections.
“Although the French political risk will not completely disappear, the main obstacle has been overcome. Thanks to this, investors there can relax and focus on, for example, the ongoing conflict in Ukraine and the attitudes of the European Central Bank, “Michael Metcalfe, global head of macro strategy at State Street Global Markets, told Bloomberg.