Cyrique Bourbon: European markets this year have been quite concerned about potential impact of the situation in Italy for markets. I think it's important to differentiate between, on the one hand, the political backdrop with more of a populist tilt to it as per the recent election; the economy, which has been doing definitely below what most other European countries have done in the last 15, 20 years. But there are signs of improvement there in terms of better competitiveness from Italy in general, where the country rises in productivity, that are positive and encouraging for the future coupled with some of the structural reforms that are starting to be enacting by the previous government.

Clearly, some concerns that the market has of the current government with its budget plans, but I don't think that is a big issue in itself. Italy has typically been quite disciplined at running a primary budget surplus for the last 20 years and is actually nowhere near as bad as some of the other European countries thinking about the overall budget deficits that they are expecting to have for the next 12 months.

More importantly, the market side is what interests us; the impact of Italian equities for European markets. Italy is a small part of European markets. So, in aggregate, it doesn't look like it could disrupt things too much. However, there are linkages, especially if I add the financial system, the banking system. And this is where things interest us.

The fundamental risk for Italian equities remains high. There are substantial risks as regards the loan side, the nonperforming loans ratios for Italian banks. We are watching how those develop. They have been picking up very slightly again after a few years of reductions in those nonperforming loans which have been a positive trend. We are watching how things are currently evolving in light of the more recent weakness in the Italian economy.

Valuations are reasonably cheap for Italian equities at the headline level. But again, once you account for some of the potential negative fundamentals on the financial side with financials being about a third of the Italian market, we do maintain broadly a neutral view on Italian equities.