Flash: European risk premium falters amongst equities – Goldman Sachs

FXstreet.com (Barcelona) - Companies with high sales growth have attracted premium valuations, a function of the high level of risk aversion and perhaps because there have been so few companies able to produce reliable top-line growth.

The risk premium, however, has started to come down, as sovereign risks in Europe have diminished and as market participants have started to anticipate a turn in the cycle. According to the Economics Research Team at Goldman Sachs, “We expect a further fall in the risk premium along with improved economic growth to reduce investor preference for these ‘safe haven’ stocks.”