The end of the sovereign debt crisis in peripheral Europe may be in sight despite continued negative newsflow from the region, several managers claim.
In the past few weeks, the eurozone has withstood the resignation of the Portuguese Prime Minister, a €24bn funding gap for Ireland's banks, and the collapse of a merger between two major savings banks in Spain.
Greece was the first of the PIIGS countries to require a bailout while Italian bank, UBI Banca, announced a rights issue last week causing a knock-on effect on share prices across the Italian banking sector.
Managers believe Spain will escape a bailout and the euro will survive and are forecasting as much as 20% upside in equity markets.
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