PARIS, Feb 24 (Reuters) - Fidelity International fund manager David Simner said on Friday he would continue to have a “healthy” allocation to French bonds and would look to buy up more, arguing there were reasons to be relatively upbeat on the asset despite political uncertainty.
French bonds have been rattled by concerns that far-right National Front leader Marine Le Pen might win the presidential election this year and lead France out of the euro zone, even though current opinion polls show her losing to either centrist Emmanuel Macron or right-wing Francois Fillon.
“Marine Le Pen has laid out a strong message around immigration and euro membership, and undoubtedly the market is right to price in that political risk,” said Simner in a statement.
“However, the barriers are high, not only to a Le Pen victory but to the likely policy options she would pursue on the very small chance she was elected.”
Simner added he thought the European Central Bank would intervene to prop up the financial system if Le Pen did win, and that Le Pen herself might not follow through on some of her policies if she became president.
“On that basis, the funds I manage will continue to hold a healthy allocation to French government bonds and look to allocate tactically as opportunity arises,” said Simner.
On Friday, analysts at Swiss bank UBS wrote that they thought French equities appeared “a bit too relaxed” given the uncertainty over the country’s election.
Reporting by Sudip Kar-Gupta; Editing by Leigh Thomas