By Shiyin Chen – Aug 20, 2010 5:27 AM GMT
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The global economic recovery is “well in place” and may accelerate as growth in developing nations counters a slowing pickup in Japan and the U.S., Mark Mobius said. Photographer: Dario Pignatelli/Bloomberg
Aug. 18 (Bloomberg) — Piers Hillier, chief investment officer of Liverpool Victoria Asset Management, talks about the outlook for stocks versus bonds. He speaks with Maryam Nemazee on Bloomberg Television’s “Countdown.” (Source: Bloomberg)
Global stocks stand a “decent chance” of a rally in the fourth quarter as investors are overly pessimistic about the outlook for economic growth, according to HSBC Global Asset Management.
While growth may be “sub-trend,” the investment company doesn’t foresee a so-called double dip, said Philip Poole, the global head of macro and investment strategy at HSBC Global Asset. A rebound in share trading volume after the end of the summer and the availability of liquidity as central banks in major economies hold off on raising interest rates will also help to boost equities, he said.
The MSCI Emerging Markets Index is little changed this year, after a record 75 percent rally in 2009. The MSCI World Index, tracking developed nations, has retreated 5.6 percent in 2010 as the European sovereign-debt crisis, a slowdown in the U.S. recovery and China’s efforts to curb speculation in its property market raised concerns the global rebound will be derailed.
“Markets have been too negative and at some point that will reverse,” Poole said in an interview in Singapore. “There’s a decent chance of a fourth-quarter rally as going into September, investors focus on the yearend and risk appetite could well pick up.”
Stocks fell in Asia today for the first time in six days. The Standard & Poor’s 500 Index yesterday dropped 1.7 percent to the lowest since July 21 after jobless benefits climbed more than economists estimated and a Philadelphia-area manufacturing index unexpectedly dropped.
HSBC Global Asset, which oversees about $411 billion of assets globally, favors equities to bonds and is “overweight” on emerging-market stocks relative to developed stocks, according to Poole.
Russia is the company’s top pick among the largest developing nations, given the outlook for commodity prices and the market’s valuations, Poole said. He’s “neutral” on Chinese stocks, saying that even as the economy slows, the pace of growth will become “more sustainable.”
The global economic recovery is “well in place” and may accelerate as growth in developing nations counters a slowing pickup in Japan and the U.S., Mark Mobius, who oversees about $34 billion as Singapore-based executive chairman of Templeton Asset Management Ltd.’s emerging markets group, said in a Bloomberg Television interview Aug. 16 in Singapore.
“Given that there won’t be a double dip, we still think that there will be a continuing bull market,” Mobius said.