Washington: Most investors are shaking off the world economic crisis and many are willing to take on more risk as they hunt for opportunities, especially in China and India, according to a survey by Bloomberg.
The first quarterly Bloomberg global poll of financial investors and analysts singled out stocks and commodities as offering the most promising returns over the next year.
“I’m actually pretty positive on the longer horizon,” says respondent Anthony Gibbs, a bond broker with Vantage Capital Markets Llp. in London. “The global marketplace has got bigger, the Chinese are getting richer and richer, and the West is going to benefit by being able to export stuff to China.”
The survey shows scepticism about the recovery in the US and Europe, with 44% of respondents saying Europe poses the greatest risk for investors and 20% citing the US.
“These investors see more downside than upside in the current investment climate in the US,” says J. Ann Selzer, the president of Selzer and Co., a Des Moines, Iowa-based polling firm that conducted the survey. “Opportunity appears brightest outside the country.”
The poll was conducted between 14 July and 17 July of investors and analysts on six continents. It’s based on interviews with a random sample of 1,076 Bloomberg subscribers, representing decision makers in markets, finance and economics. The poll has a margin of error of plus or minus 3 percentage points.
These investors say they are most disheartened about the major economic regions—71% are pessimistic about eastern Europe, 67% about western Europe, 62% about Japan and 55% about the US.
Overall, 18% say they see the world economy getting back to normal and 35% see greater opportunity and are taking more risk. That contrasts with 46% who say they are still hunkering down.
Caution dissipated on emerging markets, where 40% say the most profits can be made.
Two-thirds of respondents say they are optimistic about India’s prospects, as are 70% on China.
“The Chinese economy is run by the government, managed by the government, helped by the government,” says Omri Beer, an options trader at Nomura Holdings Inc. in Tokyo. “It’s easy to be bullish,” Beer added.
Developing nations led the rally in global stocks this year, posting nine of the 10 biggest gains among benchmark equity indexes.
The MSCI Emerging Markets Index of 22 countries has surged 42%.
The Standard and Poor’s 500 Index has gained 5.7% in 2009, erasing a decline that reached 25% on 9 March. The benchmark index for US equities rallied 41% over the past four months, led by a 95% rise in financial firms.
Treasurys have tumbled on speculation the supply of new debt to finance the US budget deficit would overwhelm demand.
The yield on the benchmark 10-year note ended Tuesday at 3.48%, up from 2.21% at the end of 2008.
The poll results were generally similar for Bloomberg customers who identified themselves as working in either fixed income or equities.
A big difference came when respondents were asked to identify the asset classes that would produce the best returns over the next year: 39% of those who said their business was equities chose stocks, as did 27% of those in fixed income.
Only 10% of those dealing in stocks chose bonds as offering the highest return, compared with 27% of fixed-income investors.
Thirty-nine per cent of equity respondents said they were taking more risk, while 30% of those in fixed income said they were.