As was widely expected, the Italian elections last weekend have shown a landslide victory for the right-wing coalition formed of Brothers of Italy, Lega and Forza Italia. Georgia Meloni, the leader of the far-right party, Brothers of Italy, is likely to become Italy’s next Prime Minister, and the country’s first female Prime Minister since unification in 19th century.
Zehrid outlines key points for the upcoming election in Italy across an executive summary:
- Georgia Meloni, leader of the far-right party Brothers of Italy, is likely to become the next Italian Prime Minister, following a landslide victory for a right-wing coalition
- We do not expect any major deviation by Italy away from the European Union (EU) political agenda, and therefore we do not see this as a geopolitical risk for Europe
- Italian equities should be unscathed, with the Italian equity risk premium unlikely to change materially
- Right-wing parties’ momentum continues to increase throughout Europe, but we do not see any major risk of rising Euroscepticism for the time being
- A more sizeable Euro-sovereign risk in our view remains the next French presidential elections in 2027, whose time horizon remains too far out for financial markets to focus on at present
We do not expect any major deviation by Italy away from the European Union (EU) political agenda, and therefore we do not see this as a geopolitical risk for Europe.
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Risk warnings – Investors should also be aware of the following risk factors which may be applicable to the strategy shown in this document.
- Investing in foreign markets introduces a risk where adverse movements in currency exchange rates could result in a decrease in the value of your investment.
- Investing in foreign markets introduces a risk where adverse movements in currency exchange rates could result in a decrease in the value of your investment.
- This strategy may hold a limited number of investments. If one of these investments falls in value this can have a greater impact on the strategy’s value than if it held a larger number of investments.
- Smaller companies may be riskier and their shares may be less liquid than larger companies, meaning that their share price may be more volatile.
- Emerging markets or less developed countries may face more political, economic or structural challenges than developed countries. Accordingly, investment in emerging markets is generally characterised by higher levels of risk than investment in fully developed markets.
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