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Wire & Cable ASIA – January/February 2010
26
The recovery
With new confidence in the world
economy, investors look toward
Europe and China
According to a global survey of 229 fund managers
conducted by Bank of America Merrill Lynch (Charlotte,
North Carolina) during the week commencing 2
nd
October,
most investors are optimistic on the world economy and no
longer fear a double-dip recession. Those surveyed manage
a total of $616 billion.
A net 65 per cent of respondents reported believing that a
global recession is unlikely in the ensuing twelve months, up
from 47 per cent a month earlier.
A net 72 per cent of respondents believe the outlook for
corporate profits will improve over that period, up from
68 per cent a month earlier.
Reflecting that optimism, the survey found the managers’
appetite for risk at its highest in three years. Shifting more
money out of cash and into equities, asset allocators pushed
their cash positions to the lowest levels since January 2004.
A net 39 per cent of money managers surveyed said they
expected profits to rise by at least 10 per cent over twelve
months, up from the 25 per cent who were of that view in
September.
Writing in
MarketWatch
(San Francisco), Barbara Kollmeyer
pointed out “one big shift” in the survey findings: more
money going into European equities. A net 30 per cent of
global portfolio managers now see euro-zone equities as
undervalued relative to other regions – the highest reading
since April 2001.
As for emerging markets, confidence in the prospects for the
Chinese economy and emerging markets in general remains
strong. A net 49 per cent of the October respondents said
they thought China’s economy would strengthen in the year
through October 2010, up from 35 per cent holding this view
a month earlier. A net 36 per cent of the respondents also
said they would tend to favour emerging markets over the
course of the year ahead.
The survey was conducted by BofA Merrill Lynch Global
Research with the help of British-based TNS, which provides
market information services in over 80 countries.
In a persuasive sign of the renewed confidence of
❖
❖
US-based investors, on 15
th
October the Rasmussen
Investor Index jumped to its highest level since the