STOCKS NEWS EUROPE-Natixis favours value until Fed worries ease

London - Natixis (Paris: FR0000120685 - news) says it will continue to focus on value stocks in the new year, betting on a recovery in Europe, and gradually transition itself to broader exposure to the United States and emerging markets as monetary stimulus-related turbulence eases.

Natixis' early 2014 strategy will continue to rely on undervalued European companies that stand to gain from the normalisation of business as a long-delayed European recovery slowly takes hold, analysts at the French bank write in a note.

Natixis' value portfolio includes heavyweight oil companies such as Britain's BP (LSE: BP.L - news) and France's Total (NYSE: TOT - news) , basic resources stocks such as Rio Tinto (Xetra: 855018 - news) and companies in the automotive sector such as Renault (TLO: RENA-U.TI - news) and Michelin (Frankfurt: MCH.F - news) .

"Once the turbulence in connection with the slower rate of (the Federal Reserve's) asset purchases has blown over, we expect to shift our preferences and come back to our Growth International strategy, with broad-based exposure to the U.S. cycle," Natixis says.

Natixis sees a "reindustrialisation" in the United States in 2014, and its U.S.-focused strategy reflects this, with 36 percent of the bank's international growth portfolio in industrial stocks such as Zodiac (Other OTC: ZODFF - news) and Schneider (BSE: SCHNEIDER.BO - news) . Another 18 percent is in pharmaceuticals.

"Further out (in 2014), the market could again reward the surplus growth of emerging markets in relation to developed countries," Natixis says.

"The timing of this second rotation will hinge, in our view, on the impact of the Fed's tapering on capital flows."

If emerging markets recover some of their attractiveness, the second half of 2014 would see Natixis playing its emerging market portfolio, which shares many of the same features and equities as Growth International.

The emerging growth portfolio features over one-third industrials, with truck-makers such as Volvo, luxury goods brands such as Burberry and pharmaceuticals all also over-represented.

Reuters messaging rm://shadi.bushra.thomsonreuters.com@reuters.net