Did past valuations underestimate regulatory risks, or are current valuations overestimating their impact ?
We highlight the impact of regulatory headwinds on our coverage universe (diversified financials) in this note. We have mentioned the list of regulatory impacts for the respective segments in table 1. The moot question is whether the valuation multiples in the past underestimated these regulatory risks, or are current valuations overestimating the impact of these challenges?