Global Financials 2022 Outlook Global financials: Uptrend t | FSMOne SG - Research Highlights

Global Financials 2022 Outlook

Global financials: Uptrend to continue on the back of rosier economic outlook and higher rates

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• Economic growth will be the main driver for the different business lines in the financials sector, particularly the banks and insurance companies.

• We believe the prospect of higher interest rates this year will be the biggest catalyst for the major banks across the globe.

• The major banks have also proven to be resilient during market downturns and are likely to remain so despite potential risks from the Omicron variant.

• The global insurance industry is expected to deliver an average growth of about 3.9% in life premium and 3.3% in non-life premium moving into 2022.

• We expect to see uneven performance across the diversified financials moving into 2022. Based on our fair PB of 1.3X, investors can expect double-digit upside potential by end-2023. We maintain our star rating for the global financials sector at 3.5 Stars “Attractive”.

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: Active approach - Blackrock World Financials; Passive approach - iShares Global Financials ETF (NYSE:IXG)