As global politics and economics continue to shift along a path of deglobalisation, capital is beginning to reassess its long-standing concentration in the world’s dominant equity benchmarks. Structural fragmentation in trade, supply chains, and capital flows is accelerating a reallocation toward more domestically anchored and regionally resilient markets, aiming to decrease negative systematic effects.
With this publication Global Equity Research Department of BBSP introduces our new series, “Regional Alpha” - a focused exploration of overlooked regional equity indices that we believe are structurally positioned to outperform. Through a rigorous technical framework emphasizing relative strength, multi-timeframe momentum alignment, breadth expansion, and accumulation signals, we aim to systematically identify markets where capital rotation is already underway.
The PSI 20 index lags significantly behind other European markets in both absolute and relative terms. Remaining below its 2008 highs, I find the market is showing clear signs of a reversal in last years' bearish dynamics and an acceleration in the bullish trend. It is evident the PSI 20 has significant growth potential at 12400/15000 EUR in absolute terms and near 30% of relative outperformance vs STOXX Europe 600 Index.
