JPMorgan Fleming Says Buy Now Ahead of Market Rebound in 6-9 Months
Jun 21, 2001 - 18:21:48 HKT
Quamnet News Service
Investors should start positioning their portfolios to take advantage of cheap stock valuations in anticipation of a turning point that's likely to emerge in the next six to nine months, according to JPMorgan Fleming Asset Management.
"We are now seeing signs that the next six to nine months will see a turning point for global equities," said Chris Tracey, global strategist at the investment house.
The stock markets of Europe, Greater China and Asia should all do well, while bonds continue to offer investors good diversification benefits as further interest rate cuts are expected, he said.
Many Asian companies have improved balanced sheets after de-leveraging and Asian equities offer the additional benefit of low valuations with price earnings ratios at an 8-year low, said Tracey.
China stocks have resisted the current global equity sell-off partly because China has withstood the U.S. economic slowdown better than many other countries, he said.
"Corporate restructuring and attention to corporate governance are starting to bear fruit,'' he added. ''Many Chinese companies reported better-than-expected 2000 results with better growth in operating profits, a stronger balance sheet and improved return-on-equity."
In Europe, Tracey likes the UK stock market because of the country's relatively strong economy, as underlined by the upward revision of first-quarter gross domestic product growth to 0.4 percent quarter-on-quarter, better-than-expected April retail sales and unemployment at a 26-year low.
The securities house advises investors to devote about 70 percent of their portfolios to global equities and bonds from Europe, Asia, Japan and the U.S. The remaining 30 percent can be invested in growth themes, such as Greater China, to generate superior returns.
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No way do I believe markets have bottomed. Just an example of hype by the brokers and analysts - Merry |
