Bankers brace for French presidential election
PARIS bankers and brokers will be on call, ready to scoot to their offices as results of the first round of the roller-coaster French presidential election start to dribble in on Sunday.
Their workload will depend on the outcome of the tight race that could potentially see two extremes – the far-right Marine Le Pen and communist-backed leftist Jean-Luc Melenchon – make it to the second round.
But the preparations under way already reflect the bankers’ experience in facing market volatility following Britain’s shock vote to leave the European Union and US presidential elections last year.
Societe Generale said it would be holding a conference call on Sunday evening with some of its economists and strategists to discuss the first-round results.
Traders and financial analysts in some of the world’s biggest investment firms in London will also be on standby for advising clients on Sunday evening and also primed for pre-dawn starts on Monday.
However, those contacted by Reuters said they would leave actual overnight trading in the euro or any cash bond or equity transactions to their Asia operations.
First exit polls are expected at around 8pm (Central African Time) on Sunday.
In Paris, French asset manager La Francaise with billion (about R850-billion) under management has a special task force in place for the election that will be on call or could even meet in the office on Sunday evening to decide on what to advise clients on Monday.
“In any case, the task force will meet early on Monday … and have a strong shot of coffee in order to brief teams,” one of the asset manager’s staff said.
One reason, brokerage Nomura said, is that it will be the April 23 vote that gives investors “the most information” as to who will be the next president after the May runoff.
“Jean-Luc Melenchon has seen such a rise in support that it is now a true four-way race,” Nomura’s forex strategists said.
“The gaps between candidates in the first round are close to the margins of error, while in the second they are far apart and in the ‘safe zone’ polling numbers.”
The latest polls show centrist Emmanuel Macron and far-right leader Le Pen narrowly beating other candidates in the first round, followed by the conservative Francois Fillon and far-left Melenchon.
Melenchon proposes a billion economic stimulus plan funded by government borrowing, corporate nationalisation in some sectors, devaluation of the euro, withdrawal from Nato and possible exit from the European Union.
His sudden rise in opinion surveys is worrying many investors, because various poll scenarios show he could win should he reach the second round.
Le Pen does not offer much solace. She plans to leave the euro currency and hold a vote on European Union membership. — Reuters