Banking sector forecasts are unrealistically high

The market's optimistic earnings forecasts for the US investment banking sector are too high, according to David Jane, fund manager for M&G's Global Financial Fund. 'Many analysts are expecting quite a strong rebound in the second half of the year after a slow start, but this isn't realistic,' he says. 'This is traditionally a much slower time of year and this year is unlikely to be any different.' Although the long-term fundamentals look strong in this sector, valuations remain too high in the short term, says Jane. 'The market doesn't seem to be recognising that a downturn can last ...