On 13 December, the Edmond de Rothschild Monaco bank organised a conference on 2023 investment strategies. After having outlined the macroeconomic outlook, the heart of the matter was addressed. An opportunity to interview Mr. Gérard OHRESSER, Managing Director of Edmond de Rothschild Monaco.
What is the best advice on investment strategy in the erratic world we live in?
Clearly, central banks and governments must now fight inflation, and this will continue to be the case in the coming months. To do this, they have an extremely effective weapon at their disposal: rising interest rates. This weapon is infallible, as the past has shown: whatever happens, central banks will eventually eradicate inflation. It is legitimate to find the process a little slow, but we will get through it.
In terms of investment strategy, it is important to understand that the environment in 2022 will not be the same as in 2023: the economy and inflation will decelerate significantly. In this context, corporate bonds with a good rating and government bonds seem to us to be the most suitable investment vehicles. As far as the equity markets are concerned, it is above all a question of investing in the strongest stocks, i.e. those with little debt, while interest rates will remain high. Companies that are very competitive in terms of product quality and services, and will therefore be able to maintain attractive margins. These stocks will perform well in the future, as well as some small caps in very specific sectors.
Which business sectors do you favour?
Sectors that I would describe as classic. Companies with low debt and the ability to maintain their earnings in a slowing economy: healthcare, food, beverages are all counter-cyclical businesses par excellence.
Let us not forget that we have entered a new phase in which globalisation is gradually giving way to regionalisation. Industrial needs are great, particularly in the developed countries.
Finally, in more specific sectors, we are particularly impressed by technological developments in the fields of bio-medicine and agriculture.
Is the mirage of cryptocurrencies dissipating?
Yes, it is. Edmond de Rothschild has always been interested in blockchain, a real technology of the future, but has always been reluctant to embrace cryptocurrencies. All the more so because they can sometimes be used as investment underpinnings for money laundering circuits. Recent events in the markets show how fragile this sector is. As with any trendy product, some not entirely honest people take over the market, make implausible promises that turn into Ponzi schemes.
Reliable crypto-currencies will one day exist for sure, but backed by central banks and states.
A brief review of Edmond de Rothschild Monaco in 2022?
This year has been a bit special for us, with the departure of Hervé ORDIONI to head up the Edmond de Rothschild Group's International Private Bank in Geneva, after 25 years in the Principality. Nevertheless, our teams have been very active. With 220 people at our sole site in the Principality, 2 avenue de Monte-Carlo, next to the Marine Spa, our operating profit is up sharply and our clients are expressing their satisfaction. We have also rejuvenated the Executive Committee, with the integration of Michael MENELLA, as Director of Private Banking.
The Principality is undergoing a MONEYVAL evaluation, do you have any comments on the subject?
Before arriving in the Principality, I worked for 3 years in Switzerland, 6 years in Luxembourg and 5 years in France. I can tell you after 20 years of banking in Monaco that the financial centre and the Monegasque banks are extremely rigorous and serious in the fight against money laundering. Banque Edmond de Rothschild is supervised by both the ACPR (France) and the FINMA (Switzerland), which means that it is imperative that we comply with the LCB/FT.
