As we finish up the second week of post-Brexit trade, global market concerns are increasingly focused on Italy and the non-performing loan time bomb sitting under its banking sector. The Italy FTSE MIB index has lost 4.7% over the past week, and is now one of the most under-valued indices in the world on a range of metrics.
Hungary, as a European country that doesn’t use the euro, has seen its equity index benefit from the Brexit sell-off in a similar way to the FTSE 100. The Hungarian forint is still down 3.3% from its pre-Brexit level and continues to trade at lows not seen since the depths of the February sell-off. At least half of the companies on Hungary’s BUX index stand to benefit from the weaker currency. In contrast, most of the eurozone members continue to see some of the worst equity performances globally.