With the French parliamentary elections looming, investors are seeking to protect themselves against risk by selecting stocks deemed safer. At the same time, international investors are opting out of the French market altogether. French banks, in particular, are being avoided by investors because of their direct link to French sovereign debt. Concerns about the nationalisation of motorways and the privatisation of public media are also adding to the uncertainty.
Investors are looking for French industrial companies with a significant presence outside France, where French revenues represent only a small proportion of their total activities.
The first phase of the French legislative election takes place this weekend, followed by a second round on 7 July. Between these two rounds, uncertainty is likely to remain high, with little incentive for investors to commit to the French stock market. Strategists are advising people to get out of the market and not into it because of these uncertainties.
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