(Finance) – This week, the Federal Reserve made its first post-pandemic cut in its benchmark interest rates. On the European front, although the ECB seems headed for a more gradual rate-cutting path, the prospects for the second half of the year appear favourable for mid/small capswhich are a proxy for growth stocks in Italy. However, worsening macro data and strong geopolitical tensions increase the risk of disappointing estimates, suggesting a selective investment approach. This is stated in the monthly report of Intermonte on the performance of the Italian mid-small cap segment, by Andrea Randone, Head of Mid Small Cap Research.
In this context, Intermonte confirms its preference for the stocks with good cash generation and exposure to solid trends international. Again, he thinks the “digital enablers” subgroup could benefit from a rather resilient outlook, as well as other “quality” names.
THE third quarter results should provide a relevant news flowwhile liquidity, which is showing signs of stabilization, remains another important selection factor.
Although delisting announcements continue, Intermonte believes that falling yields could trigger a resumption of acquisitions and IPOswhich would be very welcome news for the mid/small cap segment. The launch of a fund sponsored by the Italian development bank CDP (the project will be presented on September 30 at the Milan Stock Exchange) could be a significant catalyst for Italian mid/small caps. The fund would have around €1 billion in initial funding, 49% from CDP and 51% from private investors, including pension funds, insurers and asset management companies.