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Global Market Report: Are All Recoveries Created Equal? March 2012
Mar 24, 2012
Over the last few years, global Financials have experienced a particularly rough ride, receding 20 percent relative to the MSCI ACWI IMI Index since the peak in October 2009. In this report, we use the Barra Global Equity model to compare two short rallies that interrupted the downward trend in Summer 2010 and Winter 2011. While the earlier recovery was dominated by pure industry effects, the most recent recovery can be explained largely by the changing fundamental valuations of banking stocks and the risk premia associated with value effects over the last few months.
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