Bonabello is one of those veteran investors who believe that many emerging economies may be able to draw on longer-term advantages such as demographics, which makes both emerging market debt and equity attractive investment areas. However, he fears in the short to medium term that the challenges for some could be overwhelming. He particularly cites the Coronavirus outbreak in China, whose economic and market implications for emerging economies and beyond are still uncertain.
US equities and Italian small and mid-caps are two other areas that Bonabello eyes with interest. With regards to the latest, he says that the ground for growth might result from the abundant liquidity present in the market and from the flows that the new PIR regulation for SMEs should generate.
One of our top priorities now is to promote and stimulate investments in listed SMEs, highlighting the importance of this asset class for the Italian real economy.”
He also points to what he considers "high potential industry themes" related to cybersecurity, e-commerce and climate change, areas Bonabello and his team are focusing on currently.
In relation to the hedges used by Bonabello's team to protect the portfolios against risks such as market uncertainty and increased volatility, he says that gold and alternative strategies like long/short are among their favourite safe havens.
ENTRANCE TO THE ICE FUTURES MARKET
In January this year, Banca Finnat joined the ICE Futures Europe market, one of the main global exchanges trading in derivatives with a focus on energy assets, becoming the third Italian bank admitted to the exchange.
The admission meant the Italian bank had been enabled for trading and "direct clearing" services, within the ICE Clear Europe clearing system.
Bonabello outlines that the admission not only bolstered the bank's intermediary role in the principal markets but also constitutes another significant step forward in its ongoing innovation process "…with a focus on the emission allowance trading scheme [EU ETS - Emissions Trading System], which is the key tool adopted by the European Union to implement the Kyoto Protocol for reducing greenhouse gas emissions in energy-intensive sectors."
According to Bonabello, being part of the ICE market will also allow Banca Finnat to broaden the range of services it can provide to both business clients and other intermediaries, which are entitled to collect orders but then may need a third party negotiator (like themselves) admitted to the ICE market to enable execution.