Anda di halaman 1dari 36

Eurozone Overview

Eurozone consists of 19 member states


EU

Eurozone
EU member not
using Euro
UK, Sweden,
Denmark,
Bulgaria, Croatia,
Czech, Hungary,
Poland, Romania

Eurozone: The Basic


Growth in the Eurozone remains slow but steady
Spains high growth has slowed down recently while Italy struggles to stay positive
YoY %

Real GDP

Real GDP Growth

3
Others; 24%

Germany; 28%

Spain; 12%
France; 19%

0
3Q15

Italy; 16%
4Q15
Eurozone
Italy

1Q16
Germany
Spain

Source: Bloomberg *As of 2016/10/05

2Q16
France

3
Source: OECD

*As of 2016/09/30

Eurozone: The Basic


CPI remains low recently, with negative of Spain and Italy
CPI Growth Rate

CPI Growth Rate

6%

2%

5%
4%
1%

3%
2%
1%

-1%

0%
-1%
-2%

-2%
Eurozone
Italy

Source: OECD

Germany
Spain

*As of 2016/09/30

France

Eurozone
Italy

Germany
Spain

France

Eurozone: The Basic


Spain has a high unemployment rate, but has finally dip below 20%
Youth unemployment are increasing rapidly in Italy
Unemployment Rate

Youth Unemployment

30%

70

25%

60

20%

50
40

15%

30

10%

20
5%

10

0%
Eurozone
Italy
Source: OECD

Germany
Spain

*As of 2016/09/30

France

0
2006 2007 2008 2009
2010
2011
2012
2013
2014
EU
Italy
Germany
Spain
France
Greece

Eurozone: The Basic


Export from Germany,
France, Italy and Spain
remain flat
But Eurozone as a whole
has a higher growth rate
France is in trade deficit

Billion $

Net Export

600
500
400
300
200
100
0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
-100
-200
Eurozone
Italy

Germany
Spain

France

Eurozone: The Basic


Germany relies more heavily on trade than other countries and
depend on trade to boost its economy
Export as % of GDP

Import as % of GDP

50%

50%

40%

40%

30%

30%

20%

20%

10%

10%

0%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Germany
France
Italy
Spain
Source: OECD

0%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Germany
France
Italy
Spain

*As of 2016/09/30

Germany is the engine of Euro Area

The most populous member state in EU


Second most popular immigration
destination in the world
Famous for specialized small and
medium enterprises: Mittelstand
8
Source: World bank, Wikipedia

Data as of 2015

Germany is not alone when it comes to low trade


growth
Export by products
19%

50%

14%
9%

Motor vehicles, trailers


and semi-trailers
Machinery and
equipment n.e.c.
Chemicals and chemical
products
Computer, electronic
and optical products
Other

8%

Import by products
11%

Global trade is weakening after the financial crisis


Structural:
change in demographics
Cyclical:
slack in emerging market
Source: Statistisches Bundesamt

Data as of 2015

Motor vehicles, trailers


and semi-trailers

10%
8%

57%

8%
6%

Computer, electronic
and optical products

Chemicals and
chemical products
Machinery and
equipment n.e.c.
Crude petroleum and
natural gas
Other

The potential benefits and risks of immigrants is a


crucial to Germanys economy
Successful Asylum Seekers in Eurozone
160,000
140,000
120,000
100,000
80,000
60,000
40,000
20,000
0

42460 42277 42094 41912 41729 41547 41364 41182 40999 40816 40633 40451
42551 42369 42185 42004 41820 41639 41455 41274 41090 40908 40724 40543
Germany
Source: Bloomberg

Data as of 2016/06/30

France

Italy

Spain

Others

10

France is facing some problems

3rd largest economy in EU, 6th in


the world
Have relative high unemployment
rate among industrialize countries
due to strict labor laws
11
Source: World bank, Wikipedia

Data as of 2015

Frances Challenges: Sluggish Growth & Trade


Deficit
Trade Deficit
0
-1,000
-2,000
-3,000
-4,000
-5,000
-6,000

42248 42309 42370 42430 42491 42552


42217 42278 42339 42401 42461 42522

12

Italy with long-standing structural weaknesses

Nord
Economically
Advantaged
Underground economy, which by some
estimates accounts for as much as
17% of GDP.
Constitutional referendum will be held
on 4 Dec, which may lead to
Eurosceptic party wield power
As a main entrance of refugee, Italy
has about 1 M refugee population
Source: World bank, Wikipedia

Data as of 2015

Mezzpgiorno
Economically
Disadvantaged
13

Italy s economy lead by export


Nominal exports of goods and services have
in recent years gradually risen to around 30
% of GDP.
Goods represented 82 % of Italian exports in
value terms, manufacturing products which
counted for 96 % of export value in 2014.
US$bn

Top 5 Export Countries in 2014

70
60
50
40
30
20
10
0

Net Export-% of GDP


35%

4%

30%

3%

25%

2%

20%

1%

15%

0%

10%

-1%

5%

-2%

0%

-3%
2010

Germany

France

US

Source: Worlds top export(L),ITAT(R)Data as of


2014(L),2015(R)

UK

Switzerland

2011 2012 2013 2014 2015


Import(L)
Net Export(R )

Export(L)

14

Structural weaknesses still hold back Italys


capacity
High public debt due to high implicit interest rates paid on debt (4.2 % on average)
and nearly 0 average annual nominal GDP growth
Productivity development remain sluggish due to misallocation.
Italys public debt development

Total factor productivity growth

15

Top 10 Companies in Italy

16
Source: Forbes

Data as of 2015

Key Industry of Italy


Machine Tools& Robots
Total Market 5.42 B
Export 3.51 B to (US, China, Germany, Russia, France, Turkey)

Motorcycle Manufacturing
Total Market 3.7B
Sales

Textile & Luxury


Total Market 52.6B
Export 29B(France, Germany, Russia, US, UK, Swiss, China, Japan)

17

SPAIN with high unemployment rate

Top Export Area

Top Export Products

Europe

68.3%

Vehicles

17.9
%

France

15.7%

Machines,
engines, pumps

8%

Germany

11%

Oil

6.5%

Italy

7.4%

Electronic
equipment

5.7%

UK

7.4%

Pharmaceuticals

4.1%

Source: Worlds top export

Data as of 2015

18

Economic recovery from debt crisis


With a 3.2%(YoY)
increase in 2015, the
Spanish GDP growth
was the highest among
larger EU economies
that year.demand
Domestic
- improved access to
credit for firms and
households
-increased confidence
-declined oil prices
Source: INE Data as of 2Q 2016

Real GDP Growth Rate and Contribution

19

The second highest unemployment rate in Euro Area


Spain s unemployment rate has gradually decreased, but still high,
especially the youth .
%
Unemployment rate in Eurozone(2016/08)
25
19.5

20

%
60

Unemployment rate
Total

< 25 year old

48.3

50

15

40

10

30

19.5

20

10

0
20062007200820092010201120122013201420152016
Source: Eurostat(L),INE(R)

Data as of 2016/08

Data as of 2Q 2016

20

Skills mismatches and labor market duality


remain serious challenges

Tertiary education outcomes are not fully aligned with the labor market needs and
cooperation between university and business remains low.
Newly signed temporary and permanent contracts Skills mismatch and unemployment rate

Source: EUROPEAN COMMISSION) Data as of 2015

21

Data as of 2015

Is a big problem or not


140

France
USA

Germany
EURO AREA

Italy

#REF!

Spain

UK

France

Germany

Italy

Japan

Spain

UK

USA

EURO AREA

20
18

120

16
100

14
12

80

10
8

60

6
4

40

2
20
2008

2009

2010

2011

2012

2013

Government Debt to GDP

2014

2015

0
2008

2009

2010

2011

2012

2013

Bank NPL to total gross loans

2014

2015

How Terrible are


they
Non - performing assets
ratio

Costs rise , Loan interest rates decline


LIBOR 6-Month
2016

2015

2014

2013

2012

2011

2010

1.00%

0.80%

0.60%

0.40%

0.20%

0.00%
1

Source: ECB

9 10 11 12

Italy hard to eliminate bad debts ,


attract new capital and negotiate debt
Profitability

Source: IMF

proportion of small investors in debt

Deutsche Bank Default Risk


Deutsche Bank appears to
the most important net
contributor to systemic risks
in the global banking
system.
DBKs global derivatives risk
in the range of $75 trillion
which is 20 times greater
than the German GDP and
is 5 times greater than EU.
26
Source: Global Financial Stability Report, Data as of 2016/4

DB is the Riskiest Financial Institution in the


World
bn

DB reported a gross notional


derivative exposure of 42trn
at the end of 2015.

Source: Company Disclosure

DB is the Riskiest Financial Institution in the

World
DB reported a gross notional
derivative exposure of 42trn
at the end of 2015.
Relative to its European peer,
DBs net derivative amounts
(incl netting and collateral) is
higher.

Source: Company Disclosure

bn

DB shares Fall to Lowest Level

Deutsche Bank confirmed a


net loss of 6.8 billion
($10.5bn) for 2015 the first
annual loss since 2008.
Deutsche Bank might only
have to pay the DOJ 5.4 billion
dollars (vs. 14 billion dollars).
Recently, 10 hedge funds had
withdrawn some excess cash
and positions held at the bank.

DBK Stock Price


22.0
20.0
18.0
16.0
14.0
12.0
10.0

Source: CIQ

*As of

More Stable Source of funding than other Confidence


Sensitive Liabilities
Deposits are more stable source of funding than other confidence- sensitive
liabilities.
Deposit insurance up to 100,000 for retail depositors strengthens this
relationship.

Confidence-sensitive liabilities
2007
(m)
Deposits
457,946
Repurchase Agreements
363,684
Payables from Prime Brokerage 39,944
Commercial Paper
31,187
Source: Company Report

1H16

Change

565,645
61,406
33,132
9,327

24%
-83%
-17%
-70%

DB 16Q2 External Funding Sources


(bn)
Funding Sources
DBs
liquidity
position
relative to its external
funding
sources
and
conclude that the bank is
adequately positioned from
a liquidity perspective.

Stable funding sources for


DB amount to 710bn or
72% of its total external
funding sources.
Source: Company reports

Equity
Capital Markets
Retail Deposits
Transaction Banking
Stable Funding Sources
Other Customers
Unsecured Wholesale
Secured Funding and
Shorts
Financing Vehicles
Less stable funding
sources
Total external funding

bn
62
146
307
195
710
71
62
147

%
6
15
31
20
72
7
6
15

3
283

0
28

993

100

DBs Least Stable Funding can be Covered about 80%


DBs least stable funding bn
sources amount to 283bn and
are thus covered by about 80%
the banks liquidity reserves.

Source: Company reports

DBs liquidity
reserves

BMPSs Crisis
BMPSs gross bad
loans
amounts
to
46.9 billion which is
one-third
of
total
assets.
BMPS
had
the
greatest difficulty out of
51 of Europe's top
banks between now
and 2018 in adverse
economic conditions.
Source: CIQ

BMPS Stock Price


1.2
1.0
0.8
0.6
0.4
0.2
0.0

*As of

The three Step Operation to De-Risk


Monte Paschi
1.
2.
3.

Increase the coverage ratio for Bad debt.


The gross Bad debt will be transferred to the MPS special vehicle.
A 5bn capital increase to remove the negative capital impact from the
operation.
Shareholder share value will be diluted by at least 81%.
The 5bn capital increase represents 5.6x BMPSs market cap.

Structure of the Securitization


The senior tranche will be covered by government guarantees, Mezzanine will
be bought by Atlante fund and the equity tranche will be transferred to
existing shareholders and deconsolidated.
bn

Source: Company Disclosure

Conclude

Deutsche Bank is too big to fail.


The economic war crisis between Europe and The U.S.A.
Investors worry about the potential contagion to the financial system.
BMPS and DB have already aggressively tried to be better structure.

Anda mungkin juga menyukai