< The 2016 All-Europe Research Team
Andreas Hürkamp & team
Commerzbank Corporates & Markets
First-place appearances: 0
Total appearances: 22
Team debut: 1992
Andreas Hürkamp and his 20-person team at Commerzbank Corporates & Markets rebound to second place after spending last year at No. 3. Stationed in Frankfurt and following 140 German names, the researchers stand out, one New York–based fund manager observes, for their “good country-oriented conferences and especially their coverage of the midcaps. Everyone can tell you about the big German banks and car companies, but these guys have their ears to the ground for everyone else.” Despite the new year’s dismal beginning, Hürkamp ventures a cautiously optimistic view of the domestic market’s near-term performance. The Frankfurt Stock Exchange’s DAX index opened 2016 with its worst performance since 1965, he notes, tumbling 8.3 percent, to 9,849.34, during its first five days of trading. But this group’s top strategist still expects the blue-chip benchmark “to surprise positively” in 2016. Behind this fairly sanguine outlook is his expectation that concerns over the slowdown in China’s gross domestic product growth will wane as that economy stabilizes during the first two quarters, thanks in large part to a rebound in consumer sectors. At the same time, the 44-year-old analyst forecasts that oil prices will end their free fall and that expansion of the narrow money supply — or M1, which has been a good leading indicator for the DAX’s performance over the past several cycles worldwide — will be robust this year, at 15 percent in China, 11 percent in the euro zone and 5 percent in the U.S. This liquidity ought to offer the DAX “powerful monetary support to start a surprisingly strong upward trend during 2016,” he insists. Finally, Hürkamp reckons that 24 of the index’s 30 constituents will pay higher dividends this year. Already at 3 percent, on average, the DAX dividend yield remains some 120 basis points above the yield on triple-B-rated corporate bonds in the euro zone, he points out, which “should result in fresh net inflows to the German equity market, as Commerzbank expects China GDP crash fears to calm down during 2016.”