GLOBAL - Baring Asset Management is pointing investors towards emerging markets and small/mid caps in order to eek out the best opportunities in 2003.
Like many firms, Baring has adopted a cautiously optimistic stance for the next twelve months, believing that the most likely scenario is a US-led “gentle” economic recovery.
Despite global markets currently lacking clear direction and investors reluctant to increase their risk appetite due to the ‘war factor’, Baring is predicting an 8% return from global equities.
Head of asset allocation (elect) at Baring, Percival Stanion, said: “Unlike some commentators, we don’t see a double dip recession in 2003, but we are certainly not forecasting a powerful recovery.”
Baring, which has increased its exposure to equities, points to several positive developments which should aid steady growth including, healthier corporate profits, improved liquidity and a more positive macroeconomic picture.
Region-wise Stanion is bullish on the US, “relatively positive” about the UK but remains underweight in Europe as a result of a dire German economy.
“Germany is facing a number of serious problems such a catastrophically bad capital markets and an environment which includes unemployment at 11% and no scope for fiscal expansion,” he said.
“This is a poor state of affairs in country that represents 32% of the Euro economy and whose deep malaise is beginning to harm neighbours such as Holland, Austria and Italy.”
Other projections include:
- Asia and emerging markets remain attractive due to lower valuations, higher growth, improved management and low debt ratios.- Japan could surprise investors in the second half of 2003 following monetary easing from the Central Bank, a focus on non-performing loans and a smaller number of leading banks. - Although Baring expects global bonds to be flat in 2003, it favours corporate bonds and high yields, and expects inflation linked bonds to gain in prominence.
The registration deadline for the Workplace Savings & Benefits Awards 2019 is today.
This week's top stories were the DWP giving the green light to CDC and TPR granting extensions for 11 master trust authorisation applications.
Susan Martin says building strong foundations for business are the only way forward as the pensions industry is radically shaken up
The Pensions Regulator (TPR) has granted Now Pensions a six-week extension for its master trust authorisation application after the 31 March deadline, PP can reveal.