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Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73.40% of retail investor accounts lose money when trading CFDs / Spread betting with this provider. You should consider whether you understand how CFDs / Spread betting work and whether you can afford to take the high risk of losing your money.
Important Notice - Scam website
Important Notice - Fraud awareness
The vast majority of retail investor accounts lose money when trading CFDs / Spread betting with this provider.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail investor accounts lose money when trading CFDs / Spread betting with this provider. You should consider whether you understand how CFDs / Spread betting work and whether you can afford to take the high risk of losing your money.
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    BNP Paribas share price and the banking sector

    The banking sector including BNP Paribas shares has become synonymous with perhaps most of the worst aspects of the financial markets in which they operate, especially since the time of the Global Financial Crisis and the Credit Crunch in 2008.

    However, in its latest update, rather than tales of woe regarding debt, provisions and losses, the BNP shares were able to beat analysts expectations and the worse traumas induced by the COVID-19 pandemic.
    In this way the BNP share price has echoed the Q3 2020 updates offered by many of its European counterparts. Government intervention such as furlough schemes and assorted stimulus packages has ensured that household debt has been contained and avoided damaging retail banking.

    In contrast, BNP Paribas shares have witnessed a surge in trading income associated with the volatility created in the immediate aftermath of the pandemic in Q1 2020, when there were sharp movements in many of the major asset classes.

    At the same time, corporates moving to shore up their balance sheets in the face of COVID-19 offered fat fees to investment bankers.

    Learn more about shares trading

     

    BNP Paribas shares: ECB reining in risk

    All of this has meant that while there has naturally been a lessening of business activity, mirroring sharp falls in GDP, those holding BNP Paribas shares have been left surprisingly unscathed.

    Part of the credit for this can go to sector regulators and the ECB who reined in risk after 2008. Indeed, the market will be looking to the ECB to decide whether banks such as BNP Paribas who would now be able to resume dividend payments, and are keen to do so to attract investors to the BNP share price, should be allowed to.

     

    The BNP Paribas share price and the Q3 update

    What has been most interesting about the Q3 update is that the management of BNP Paribas have barely been able to conceal their delight at the relatively strong performance, given the severe pandemic headwinds, and indeed, the run up to a second series of lockdowns.

    As far as the headline numbers at BNP Paribas the highlight was certainly the 17.4% rise in the investment banking division and indeed, if one strips out fixed income, the gain was as high as 36%.

    However, net income still slightly down across the whole group, with the main surprise being the way that analysts had earned significantly on the pessimistic side - €1.57bn versus the actual €1.89bn.

    Indeed, one could argue that it was the estimates being so lowball that allowed BNP Paribas shares to rise relatively sharply as the results were unveiled. Ironically, the analysts consensus zone was effectively what the company had guided, a 15% - 20% reduction to the bottom line at the Q2 stage.

    The key going forward will be the retail side of the BNP Paribas business and the issue of consumer debt ballooning once the pandemic fades. If such debt emerges it may be that the cushioning effect of investment banking revenue is not enough to offset losses in the retail space.

    To see all upcoming news and data releases that’ll have an effect on the financial markets, check out our Economic Calendar. It’ll cover all major releases from global economies and give you the exact time the release is due, the previous data, forecast data and actual data (once released).

     

    BNP Paribas share price daily chart

    BNP Paribas shares gapped up on their daily chart following the Q3 update and have now rebounded enough to be in close proximity of the 200 day moving average now at €35.

    In fact, the stock has not been above its 200 day line - in technical bull mode since the end of February just before the COVID-19 crisis struck.

    What will be key for the rest of 2020 is whether BNP Paribas shares can end the year above the 200 day line, something which could be accompanied by the resumption of the dividend payment, or positive quarterly revenues as an average across all divisions.

     

    Daily chart showing BNP Paribas share price daily movements for 2020

     

    How to trade BNP Paribas shares

    Open a live or demo account with ATFX to get started today. Trade shares on leverage, take up a long or short position when trading with CFDs and make potential gains from price movements.

    1. Register for an account or log in to your existing account

    2. Open MT4 either on your desktop or mobile

    3. Search for BNP Paribas share in the market watch or symbols window

    4. Choose your position size

    5. Hit buy or sell, and then confirm the trade

    Last Updated: 06/11/2020

    This market commentary and analysis has been prepared for ATFX by a third party for general information purposes only. Any view expressed does not constitute a personal recommendation or solicitation to buy or sell as it does not take into account your personal circumstances or objectives, and should therefore not be interpreted as financial, investment or other advice, or relied upon as such. You should therefore seek independent advice before making any investment decisions. This information has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. We aim to establish and maintain and operate effective organisational and administrative arrangements with a view to taking all reasonable steps to prevent conflicts of interest from constituting or giving rise to a material risk of damage to the interests of our clients. The market data is derived from independent sources believed to be reliable, however we make no representation or warranty of its accuracy or completeness, and accept no responsibility for any consequence of its use by recipients. Reproduction of this information, in whole or in part, is not permitted.


     

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