Euro Equity Update

Funny thing politics… So 'tejatrin' in Italy, 'farsa 'in the US, 'froga' in the EU and who knows what they are trying to do in the UK. I would say thank god that we at least have sensible leadership in the world's top corporate companies.

We have seen some redemptions from Pimco's flagship fund. These redemptions if not checked may impact Allianz revenue stream going forward. However, we believe that the negative impact is being overpriced by the market. We maintain our 1year price target of €134 and Allianz remains one of our core holdings.

Lufthansa has been downgraded to hold by Duetsche Bank with a price target of €14. DB believes that Lufthansa are behind in the restructuring programme. Last week we had the opportunity of questioning Lufthansa's official on their way forward. Their plan seems solid and credible. So we see this as a chance to add Lufthansa, we have a price target of €17.50. We are basing our forecast on the assumption of a slow recovery in Europe in 2014 and believe that LHA is best positioned to benefit from this recovery. LHA is also the most volatile of our Blue Chip recommendations due to its sensitivity to oil prices and economic data. Caution.

Essilor has triggered our stop loss alert. This means that we will be observing Essilor closely and establishing a stop loss limit if prices continue to plummet.

Antoine