Credit Suisse likes Renewables and Mining
Credit Suisse's strategy team set out the top ten investment opportunities that it spied in the global equity space.
Top of the list were European renewables and grid operators, including the UK's National Grid, pointing to forecasts for wind capacity to multiply by a factor of 15 over the next two decades and for the price of carbon to hit $100 per tonne by 2030.
The team led by Andrew Garthwaite also liked Mining, arguing that it was a play on "strong" infrastructure spending in China, a successful Covid-19 vaccine which would lead to a bounce back in industrial production and G7 governments' focus on infrastructure spending.
Within the same sector, the analysts highlighted Anglo American.
They also pointed out that they could envision a multi-year scenario where gold hit $2,500/oz..
Construction materials were also expected to do well, with CRH likely to do well as US housing grew over 20% thanks to low bond yields, together with stocks exposed to insulation in particular.
Industrial gases was another area where they saw potential, citing forecasts from McKinsey for hydrogen to become a $2.5trn market by 2050.
Garthwaite also recommended being overweight global emerging markets, what with their currencies at 20-year lows versus the valuations implied by purchasing-power-parity but their basic balance of payments surpluses running at 16-year highs.
Linked to GEM, they called attention alcoholic beverage stocks, which had 55% exposure to such geographies and "abnormally cheap" relative to their US peers and food producers.
Chinese tech shares were also on Credit Suisse's list, with the broker of the idea that the "bubble" had yet to really start.
Property and casualty insurers were also potentially attractive, including the likes of Lancashire.
In Defence, they judged BAE Systems to also be "abnormally cheap", arguing that military outlays by governments were likely to continue expanding faster than GDP in an increasingly tri-polar world.
Lastly, they pointed out the potential opportunities in the Telecommunications equipment space, with Ericsson among their 'outperform' rated stocks in the sector.