Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 54.76% 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 - Fraud awareness
Important Notice - Scam alert
54.76% of retail investor accounts lose money when trading CFDs / Spread betting with this provider.
Important Notice - Fraud awareness
Important Notice - Scam alert
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 54.76% 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 - Fraud awareness
Important Notice - Scam alert
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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    Unicredit share price gains on a banking sector rebound

    The banking sector has not exactly covered itself in glory over recent years. It is also not noted as being a winner in a crisis. This was shown in 2008 in the Global Financial Crisis. It may be that analysts and investors looking at the Unicredit share price were bracing themselves for disaster in the wake of the COVID-19 pandemic.

    But companies such as Unicredit have underlined that 2020 has so far not been as negative as some would have feared. The Unicredit share price has been protected by personal and retail debts being deferred, while volatile markets in the run up to and aftermath of the emergence of COVID-19 in March have boosted trading income.

    Learn more about shares trading with ATFX

     

    Unicredit shares and a surge of liquidity

    The need for companies to shore up their balance sheets, plus billions injected into the money markets from central banks, produced a surge in liquidity earlier this year. This ultra lax financial environment has meant that even previously struggling banks of which Unicredit shares have certainly been one, have flourished in relative terms.

    Indeed, an earnings boost has been the main factor which has prevented Unicredit shares being split into separate sub holding companies, ostensibly to unlock shareholder value. The call the management of Unicredit has made is that conditions have improved, and will remain benign enough for long enough to allow a recovery to continue for the Unicredit share price.

     

    Unicredit shares Q3 performance

    This may prove to be a decent call to make given the Q3 performance. Considering that ahead of the news the market was expecting earnings to come in at €334m, versus the true number at €680m.

    Such an overshoot in performance for Unicredit shares suggests we are in a new era for the bank, and that exceptional times could lead to an exceptionally good performance.

    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).

     

    €3bn in unlocked value for Unicredit Shares

    This idea is underlined by the way Unicredit decided against a breakup of the company’s Italian and German assets to potentially release €3bn in value. Such a windfall could have delivered a notional 20% rise in share price. 

    But of course, if the company is confident about the fortunes of Unicredit shares to abandon the plan to unlock shareholder value, it could very well be that we are looking at an inflection point for the UCG share price.

     

    UCG shares dividend hopes

    What will be key for Unicredit shares over the rest of the year is what the prospects for a resumption of the dividend may be. This is in the hands of the European Central Bank, and clearly will depend on whether going into the winter it is confident that the worst is over in the financial markets.

    If Unicredit shares are trading with a dividend again, it really would underline the turnaround that the pandemic will have inadvertently brought to a problematic fundamental situation.

     

    How to trade shares with ATFX

    Looking to trade Unicredit shares and other major company shares? Open a live or demo account with ATFX to get up to speed. Start trading now to benefit from competitive spreads, high-quality trade execution, and no commission.

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

    2. Open MT4 either on your desktop or mobile

    3. Search for Unicredit shares in the market watch or symbols window

    4. Choose your position size

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

     

    Unicredit share price: daily chart analysis

    Given the way that Q3 earnings were such a beat on expectations, it is perhaps disappointing that UCG shares have not surged to reflect the strong Q3 update. Perhaps this is due to uncertainty over the re-introduction of the dividend.

    What will be interesting to see over the near term is whether the 50 day moving average now at €7.30, can be recovered on a weekly close basis? This is something which could deliver a sustained positive trend change for the bulls. Above €7.30 could lead to post June resistance at €9 by the turn of the year.

    Daily chart analysis showing Unicredit share price daily movements for 2020

     

    Risk management

    Looking to learn more about risk management and how it can benefit your trading? Check out our Risk and reward ratio article for more insight.

    Take the opportunity to develop your risk management strategy. Understand five key risk management techniques to help you look after your funds.

    Last Updated: 10/11/2020

    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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