MILAN — Voters in Italy on Sunday sent a clear message: Let’s turn a new leaf. But the ensuing political shake-up — and the risk of a hung parliament — didn’t faze the Italian stock market or luxury fashion shares, which mainly closed up at the end of trading here on Monday.
The antiestablishment Five Star Movement and the Northern League emerged as the winners of the general elections, elbowing out former Prime Ministers Silvio Berlusconi and Matteo Renzi of the Forza Italia and Democratic parties, respectively. However, since no political party has reached a 40 percent stake — which would mean a majority to form the two houses of parliament, the Chamber of Deputies and the Senate — the elections remained in a political gridlock.
Daily Il Sole 24 Ore claimed this was a “historical win of Five Star Movement, but a majority is yet to be found,” while Corriere della Sera’s take was “Enigma government. What could happen now?”
“This is the worst, or most difficult result, we could get in terms of reaching stability,” said Michele Norsa, industrial partner in the Italian Strategic Fund and former Salvatore Ferragamo chief executive officer. “We see a real geographic rift in the country and a generational one, too, but the vote shows that Italians are looking for new leaders.” Norsa said the Five Star Movement and the League’s programs are “incompatible” and that he will wait to see what a potential center-right coalition could provide in terms of guidelines. “The positive in this situation is that Italy has been governed by coalitions for years, it’s used to finding points of contact, and is flexible,” he said.
Armando Branchini, deputy chairman of Milan-based InterCorporate, said he wanted “to hose it all down.” He admitted there was a degree of uncertainty, but expressed confidence that “all that has been said before was part of the political campaign” and that the parties “will be more responsible now.” Accordingly, Branchini believes that the anti-European tones used throughout the campaigns are not going to be followed through. “We must all think in terms of a united Europe. National and international development cannot be managed by a country of around 60 million people; we must have a more significant weight to be able to compete with the U.S. and its 300 million people, with China and its more than 1.2 billion people, and countries such as Russia and Japan. The Five Star Movement already changed their tune in the past three or four weeks.”
Norsa concurred. “I don’t think there is an anti-European line,” he said. Responding to a question about Renzi, whom the fashion industry has supported, Norsa said the former prime minister “knew how to talk with the industry, he had experience despite his young age and had a vision of growth. The economy now does not seem top-of-mind at the moment.” He was also not worried about investments in Italy. “Asians are the big investors now and they are not interested in politics,” he said.
The Italian stock market was equally undaunted by the political situation on Monday. At the end of trading, the FTSE MIB in Milan closed down 0.42 percent at 21,819.91, but shares of almost all main fashion companies showed an increase. Brunello Cucinelli shares were up 0.80 percent to 25.30 euros and Moncler shares were up 1.72 percent to 28.38 euros. Luxottica shares closed up 0.85 percent to 52.02 euros and Safilo’s were up 1.93 percent at 4.50 euros. Tod’s was up 0.67 percent at 60.40 euros. Conversely, shares of Salvatore Ferragamo, whose ceo Eraldo Poletto is officially exiting on Thursday, closed down 1.7 percent at 22.03 euros and shares of Yoox Net-a-porter, whose year-end figures are to be released on Tuesday, inched down 0.05 percent to 37.71 euros.
“There was no dramatic drop because foreign observers know that Italians don’t like revolutions,” remarked Branchini. “There is no need to panic, the vote shows a request for the renewal of the political class, and it’s easily understandable.”
Italy’s President Sergio Mattarella is tasked with forming the new government in three weeks’ time.