- Structural inflationary pressure and higher key interest rates determine current investment environment
- Moderately positive stock market development expected in Europe and the US in the further course of the year
- Strong demand for Raiffeisen Certificates for inflation hedging and with capital protection
In Europe, Raiffeisen Research still sees increased and structural inflationary pressure. In the absence of further (geo)economic shocks, the European Central Bank (ECB) could miss its own inflation target by 2025. The current lower energy prices as well as the consolidation of food prices are having a positive effect, but inflation expectations are still well above the ECB target in some cases. Goods and services inflation is firming up in the euro area and Austria.
“We also expect key interest rates to rise in the longer term. These should remain well above 2.5% until 2025. Some capital market players are much more optimistic here or expect earlier key rate cuts. However, this would only be possible in the event of a significant economic slowdown. Otherwise, there is much to suggest that the ECB's monetary policy reaction function has changed permanently,” says Gunter Deuber, Head of Raiffeisen Research and Chief Economist at Raiffeisen Bank International. Moreover, according to Deuber, the balance of power in the ECB Governing Council has presumably shifted.
In the first half of 2023, the performance of the stock markets was very positive. Raiffeisen Research takes a moderately positive view of further stock market development in Europe and the US. If the US slips only into a moderate stagflation recession, this could even provide relief on the capital market. In the short term, however, a volatile sideways movement must be expected until there is more certainty regarding the economic development in the US and the further interest rate and monetary policy of US Fed and ECB. This is an ideal environment for flexible instruments such as certificates, as securities are still the tried and tested instrument for maintaining purchasing power.
“This outlook once again confirms the importance of the investment themes of inflation protection and purchasing power hedging. Raiffeisen Certificates has proven to be successful in both areas. Since summer 2021, there have been regular issues of the ‘Europe Inflation Bonus&Safety’ series. In this series, the average interest rate paid has been 9.3% since 2022,” says Heike Arbter, Head of Raiffeisen Certificates. The popularity of the “Bonus&Safety” series is also confirmed by the new performance study: “In a total of 168 certificate issues in the series, there was only one barrier breach. Even without capital protection, the safety cushion of 51% or more reliably takes effect here. The combination of yield and safety ensures continuous growth here. The outstanding volume has increased tenfold since 2010, from € 75 million to € 750 million,“ Arbter continues.
In general, we have noticed that not only existing customers are reinvesting their capital in Raiffeisen Certificates, but also new customers are increasingly using the world of certificates for themselves and their portfolios. The capital protection products from Raiffeisen Certificates are also in high demand. The current interest rate level allows capital protection of more than 100% and the opportunity for additional income with broad investment themes such as sustainability or dividend stocks. And all this with a relatively short maturity of 6 years. Raiffeisen Certificates has proven to be the #1 domestic certificate provider, but also international awards such as the Structured Product Europe Awards or awards from the Warsaw Stock Exchange recently confirmed the continued high quality of Raiffeisen Certificates’ products and services.
We would like to point out that investments in certificates involve risks as well as opportunities: As with all certificates issued by Raiffeisen Certificates, a brand of Raiffeisen Bank International AG, the market, issuer and bail-in risk must be taken into account.
For further information please contact:
Andrea Pelinka-Kinz (+43-1-71 707-8787,
andrea.pelinka-kinz(at)rbinternational.com)
www.rbinternational.com | www.raiffeisenzertifikate.at
About Us | raiffeisencertificates.com
Simple investment for everyone. We are the leading and multiple award-winning Austrian provider, which has been at home with its certificates for more than 20 years in the DACH region as well as in many markets in Central and Eastern Europe. With more than 5,000 investment and leverage products, we offer an interesting and comprehensive product range.
At Raiffeisen Certificates, we stand for making market developments tradable for our customers simply, competently and quickly. Whether based on stocks, stock indices, commodities or individual topics, our experts will find a suitable certificate solution. Since 2005, we have focussed on sustainable certificates and are thus among the pioneers when it comes to responsible investing. Raiffeisen Certificates is a brand of Raiffeisen Bank International AG.
Raiffeisen Certificates is a brand of Raiffeisen Bank International AG
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