Jon Ingram, fund manager at J.P. Morgan Asset Management, isn't unduly worried about negative headlines. Even Brexit and banking shares hold opportunities for investors, he told finews.asia.
Mister Ingram, Credit Suisse CEO Tidjane Thiam recently said he wouldn’t invest in European banking shares. Do you?
I assume that Mister Thiam spoke about European banking stocks in a particular context. In any case, we are investing in European banking shares and are very happy about it too.
Is the industry in better shape than expected?
Brokers love headlines that can be applied to the entire industry. However, if an industry is being vilified, there are buying opportunities in individual stocks.
Which European banks do you like?
We are investing where we see the most attractive valuations. We like the French banks, such as BNP Paribas, whose stock price came under pressure together with the rest of the industry.
«We see better opportunities outside banking»
Those institutes are well capitalized and the share price isn’t taking that into account. That’s an opportunity for us and our clients.
You’re not holding any Swiss banking shares though?
No, we see better opportunities outside Switzerland and outside banking. That doesn’t mean though that we never held any or never will.
Where do you see the best opportunities?
In cyclical, industrial stocks for instance. We believe the European economy will recover and that this will go unnoticed, much as with the banks.
«We shouldn’t focus too much on politics but on the profitability of companies»
The media focuses only on uncertainties, such as with Brexit and the French and German elections next year. It is important to understand that there will always be uncertainties in Europe.
Not very reassuring, surely?
We shouldn’t focus too much on politics but on the profitability of companies.
«We are also confronted by disrupting issues»
Earnings are developing well and not even Brexit has had much of an effect on the profitability of British companies. Quite to the contrary: the stock market in the U.K. has developed splendidly after the referendum.
Do you see light at the end of the tunnel?
Rather than focusing on the upside, it's more about avoiding the downside.
That’s your job as a fund manager. But the profession is under pressure.
The industry is actually in a good place. We only have to understand that every business needs to evolve. We are also confronted by disrupting issues. The products need to get better – or cheaper.
Jon Ingram is managing director at J.P. Morgan Asset Management and in charge of the Dynamic Team at the division for investments in European shares. He has worked at the U.S. bank since the start of the century. He studied engineering and was trained in metallurgy in Oxford.
