Nomura Securities on Brokers & Universal Banks: Capital Markets Monthly

February 1, 2012 10:50 AM EST Send to a Friend
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Price: $50.70 -1.11%

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Nomura Securities on Brokers & Universal Banks: Capital Markets Monthly

Analyst, Glenn Schorr, said, "Despite lackluster earnings results, a lift in asset prices (equities +4-5%, tighter credit spreads) and increased comfort around risks in Europe post the ECB’s LTRO fuelled a rebound in capital markets stocks in January, with the brokers (+20.8%), universal banks (+16.3%) and asset managers (+9.3%) all outperforming the broader market (trust banks lagged at +0.4%). Although this is a solid start to 2012, the core European issues remain, and we probably need to see some volume follow-through to push these stocks to the next level. Even after the recent rally, financials continue to trade at historically low multiples, with most of the brokers and universal banks at discounts to tangible book value. Among the brokers and universal banks we favor Citi (NYSE: C), JPMorgan (NYSE: JPM), and Goldman Sachs (NYSE: GS). Among the asset managers we like Invesco (NYSE: IVZ) and BlackRock (NYSE: BLK)."


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