According to Morgan Stanley, the value of bank stocks could increase by 45%.
This is according to Business Insider, following a report issued by the same bank.
According to Morgan Stanley, there are five factors that could influence this growth:
- Rising yields. Banks usually tend to benefit from rising bond yields by increasing their stock price.
- Attractive relative valuation. Bank stocks are cheap right now.
- Rising earnings. According to Morgan Stanley, banks can increase in value because they are seeing interest rates rise, the GDP of the nation’s states is growing, which will lead to more lending and reduced loan losses, and finally, there will be job growth and a return of purchases, in short, an economic environment that is favourable to them.
- Light positioning: according to Morgan Stanley, banks have little exposure to hedge funds during this period, despite the good performance of the stock market.
- Momentum. Market strength at this time is expected to be bullish.
Morgan Stanley and the adoption of Bitcoin
Morgan Stanley is considered one of the most important credit institutions in the United States. It regularly issues reports on different sectors. For example, it recently issued a very negative report on the GDP of Southern Europe, which is said to have problems due to the lack of support from tourism. In fact, if the Covid-19 variants continue to spread in Europe, the southern European countries that rely heavily on tourism could see their GDP shrink further.
Morgan Stanley has also recently made headlines for its decision to offer its clients funds directly exposed to Bitcoin. It is the first major financial institution to choose to go down this route. However, its opening is reserved for large investors, i.e. those who have at least $2 million on deposit. This choice is part of the desire to take advantage of a sector, that of Bitcoin, on which there is a lot of attention from institutional investors, looking for reserves of value as an alternative to the dollar, at risk of devaluation, and to gold, a safe haven par excellence but with a series of physical limits that Bitcoin does not have. This is a necessary choice in order to keep up with the times.