THE outlook for shares may be better than many people think, according to an investment strategist with one of the world's biggest banks.
Kevin Gaynor, global head of asset allocation strategy at Japanese banking behemoth Nomura, thinks the global share market - along with the major economies - is heading for what he calls "The Great Normalisation".
"I think the landscape's changing quite materially, and I don't think it's fully embedded into expectations."
He said the shift was evident in the US and the UK, which were the source of the global financial crisis.
"I think there's growing evidence that the factors that gave us this weak trend growth rate for the past four years are starting to ebb.
"The investment psychology that we've had, the expectations formation process, and indeed the asset allocations we've ended up with are appropriate for the last four years and, being human, we've extrapolated and probably taken them too far.
"I think we're starting to move towards a quite different scenario," he said at the briefing in Sydney on Thursday.
He said funds managers had been focusing on tactical asset allocation, trying to pick when the share market moved below the trend and when it moved above trend.
But they were losing sight of the trend itself, which in normal business cycle conditions is responsible for 90 per cent of returns relative to safe assets.
Many big investors have become preoccupied with so-called "risk-on, risk-off" tactics in response to shifts in market sentiment as every time a recovery seemed to be on the way it would be dashed.
But this is changing.
The global crisis not only caused a "nasty cyclical contraction", he said, it also depressed the trend in growth.
For three and a half years, "every economist and equity analyst" repeatedly predicted a recovery to pre-crisis growth rates, only to be disappointed as the slow trend persisted.
But the underlying trend is starting to pick up.
The trend, the underlying pace of growth in the United States and the UK is returning to levels that look a bit like pre-crisis, Mr Gaynor said.
Forecasters were now as guilty of excessive pessimism as they were of being overly optimistic earlier.
"No one in their right mind wants to come out with a very bullish US growth forecast for next year, having done it for the last four years and been wrong."
He also said equity analysts had not adjusted their forecasts for corporate earnings upward in response to "positive data surprises" that in the past have led to a brighter earnings outlook.
A normalisation of monetary policy in the developed world would mean an upward drift in interest rates, which would usually result in lower share valuations from analysis using discounted earnings models.
But the improved economic outlook and the incorporation of a more positive earnings outlook into valuations would "swamp" the effect of higher interest rates and push prices higher, he said.
Anda sedang membaca artikel tentang
Shares outlook bright - Nomura strategist
Dengan url
http://mesinjahitan.blogspot.com/2013/10/shares-outlook-bright-nomura-strategist.html
Anda boleh menyebar luaskannya atau mengcopy paste-nya
Shares outlook bright - Nomura strategist
namun jangan lupa untuk meletakkan link
Shares outlook bright - Nomura strategist
sebagai sumbernya
0 komentar:
Posting Komentar