The 2010 vintage will not remain in the annals

The 2010 vintage will not remain in the annals. While the year has not been totally black, but it is far from euphoric: CAC 40 surrendered a 3.34, after an increase of 22 in 2009. With dividends reinvested, the index is almost stable ( 0.42).

Fears about sovereign debt and the specter of the "double dip" have weighed on the Paris stock exchange, which is caught in a relatively narrow band of fluctuations.

Place hexagonal in the camp of the "negative" alongside the countries of the South such as the Spain (-17) or Italy (-13), far behind its neighbors to the North, therefore, between the Germany ( 16, with dividends), but also the United Kingdom ( 9, and 13 in euros) or the Sweden ( 21, 38 in euros). Down as the Dow Jones ( 11,02, 19,05 in euros), supported by the policy of quantitative easing of the US Federal Reserve and then, more recently, the extension of tax measures.

The composition of the CAC 40 has not played in its favour, explaining in part also the strong variance with average values ("Les Echos" of December 28). It includes 17 of values (according to calculations by CPR AM December) financial, directly affected by fears about public debt and regulatory concerns. Credit Agricole fell by 23, Société Générale of 18, BNP Paribas of 15. AXA dived by 25.

At the same time, the two heavyweights of the index are down: Total (which weighs 12 of the CAC 40) and Sanofi-Aventis (8) have respectively lost 12 and 13.

But Alstom (-27) which is a Red Lantern to ACC, despite the strong industrial sector in Europe. The OEM was affected by the loss of contracts and the perception that the emerging can be competitors. "A majority of French values have under-performed their European sector." "It's very singular," says Pierre-Yves Gauthier, co-founder of AlphaValue.

ALSTOM is followed shortly by EDF (-26), which, as all of the services to the European communities suffered from fears of the effects of budgetary policies with soft growth prospects. More generally, defensive and household segments have tended to suffer in Europe. Conversely, "the cyclic overall fired their PIN of the game, and in particular the values well exposed to the emerging", said Jean-Marie Mercadal, Director of the management of OFI AM.

No wonder that the "winner" of the 2010 top in luxury: LVMH awarded 57 to PPR ( 41), which barely exceeds Technip ( 40).

In total, 6 companies of the CAC 40 gained more than 30. 21 managed to maintain in the Green twelve months. "There was a close correlation between growth of profits and stock market performance, except banks and petroleum sector", notes Pierre Sabatier, strategist at PrimeView.

Market position

After this poor year, most professionals are generally confident for 2011. On average, managers and strategists expect an index autour 4.360 points ( 15), in a year, estimates of a dozen institutions interviewed by "Les echos".

A progression in two figures, therefore, who should ultimately be relatively close to the growth of profits ( 12). Analysts expect profit recurring 96.5 billion euros for the CAC 40, after 86.2 billion in 2010 ( 53!), according to data from FactSet retired by PrimeView. Profits are 8 of the 2007 peak.

The market, behind the dynamics of the results, could benefit from more support. First, its low prices: the price-earnings ratio is around 10.5 below the historical average and with a discount of 10 from Europe, from AlphaValue. Then, the return of the themes of merger-acquisition and redemption of shares/dividends, then businesses have comfortable war treasures. Finally, in a context where the volatility has decreased, the shares could benefit from reallocations, offering fewer opportunities bond market. A movement that has already begun in recent weeks that funds shares recorded in net positive flows of $ 30 billion (primarily from the emerging) in 2010, according to EPFR.

However, all clouds are to be dissipated. Concerns about public finances could cause turbulence, and possible increases in rates in the emerging. "The CAC 40 will continue to be penalized by the issues of debt." "Difficult to imagine a strong growth, while the financial - very represented - could still suffer," concludes Pierre Sabatier.