Germany, UK, Netherlands, Scandinavian countries and Switzerland are likely
to continue to outperform other European equities next year, thanks to a better
macro backdrop and higher exposure to international markets, reckons Citi.
Those countries, nicknamed GUNS, claim eight of the nine least risky spots
in Citi's Country Attribute Model, which includes exposure to different global
regions, earnings momentum, valuations and macro factors.
Belgium, Ireland, Spain, Portugal and Greece, on the other hand, get the
highest overall risk rankings.
"Long north and short south has been one of our key themes over the last
couple of years. The macro support for this is still in place and valuations
also point this way too," Citi says in its 2013 outlook note.
"However, there is tentative evidence that earnings trends are stabilising
in the south. The balance of these factors keeps our preference for north over
south but with a little less conviction than previously."
Reuters messaging rm://firstname.lastname@example.org