21 August 2017 by pdonnat
Most historical auto manufacturers stocks are discounted with price earnings ratio between 5 and 7. The market discounts the huge diesel deception. Moreover, the equity valuation does reflect some skepticism over their capacity to survive the engines’ revolution as well as the self-driving game changer. However, these manufacturers own priceless gems: brands. Jeep - part of Fiat Chrysler Automobiles NV - is supposedly worth more than its owner itself. Great Wall Motor Co., a Chinese SUV manufacturer, is interested in buying the Jeep division. Fiat has just declined. The CDS tightened by 14 bps and should trade below 200 bps quickly. There are many iconic brands, there is one new brand. The latter is looking overvalued and while the others are looking undervalued. What car you drive, what watch you wear are defining who you are. Not sure everyone wants to be a TAC (Tesla Apple Client). The success of Peugeot with the DS Brand is another example of heritage value. The auto sector is offering a lot of investment opportunities.
Meanwhile, the credit index market was unchanged. The activity was subdued and the reported volumes low.