|
 However, an overwhelming majority of survey respondents who
expressed a view - 94 percent - do not expect central banks to
deploy 'helicopter money' this year, while saying that they seem to
be running out of options to stimulate growth.
Equity allocations rebounded to 46.6 percent, the highest level
since January, with the MSCI World equity index up almost 17 percent
over the last three months.
The moves higher in global stock markets have been accompanied by a
recovery in oil prices to over $48 a barrel, receding worries about
the Chinese economy, and the U.S. Federal Reserve indicating it is
in no hurry to tighten policy.
"We are still seeing the 'Yellen Put' as a support for global equity
markets," said Peter Lowman, chief investment officer at UK wealth
manager Investment Quorum. He pointed out that Fed chair Janet
Yellen had said on numerous occasions she is more concerned about
outside forces than the state of the U.S. economic recovery.
The survey of 58 fund managers and chief investment officers in the
United States, Europe, Britain and Japan was conducted between April
15 and 28.
As well as raising their equity holdings, investors trimmed their
bond holdings to 37.6 percent in April, the lowest since January.
Allocations to cash and alternatives were steady.
The Fed's dovish stance, in conjunction with continued stimulus from
the European Central Bank and the Bank of Japan's adoption of
negative interest rates in January, has helped drive equity markets
higher since mid-February.
Emerging market stocks <.MSCIEF> have been a major beneficiary of
investors' greater willingness to take on risk, surging 22 percent
from their February lows.
Some 47 percent of respondents who expressed a view thought this
emerging markets rally could continue, citing positive factors such
as the weaker dollar, the rebound in commodity prices and an
improvement in Chinese economic data.
PULL BACK
However, 32 percent thought it could not be sustained, and another
21 percent said it was dependent on a number of factors outside
emerging markets' control, and a pull-back could occur.
Raphael Gallardo, a strategist at Natixis Asset Management, argued
that the rebound in commodity prices had "clay feet". "It stems from
the market belief that the worst is over for Chinese growth, which
is, in our view, extremely complacent," he said.
Anders Lund Larsen, a portfolio manager at SEB Investment
Management, questioned whether the weaker dollar would persist. "The
recent rally is also a reflection of the extremely bearish sentiment
and positioning on emerging markets," he said.
[to top of second column] |
"What we have witnessed is an unwind of some of those big
underweights but we don't see the macro backdrop as strong enough to
engineer a sustained rotation into EM assets."
Within their global equity portfolios, asset managers maintained
their exposure to emerging equities at 13 percent, cut their
allocations to U.S. stocks by one percentage point to 37.2 percent,
and raised their Japanese equity holdings to 20.8 percent, the
highest since November 2014.
The Japanese stock market rallied hard in the first half of April,
climbing 9 percent, but has tumbled 5 percent over the past week
after the BOJ declined to deploy more stimulus at its April meeting.
HELICOPTER MONEY
Governor Haruhiko Kuroda tried to counter the view that the BOJ was
running out of options, while dismissing the idea of "helicopter
money" - where people are given cash handouts in the hope they will
spend it.
The notion that central banks might have to adopt increasingly
unorthodox measures has been mooted in recent weeks, but on the
whole, survey respondents did not expect them to resort to using
"helicopter money" this year.
"What is striking at the moment is the lack of a broader consensus
between policy makers about what monetary policy can achieve and
what it should do in the current situation," said Jan Bopp, asset
allocation strategist at Bank J Safra Sarasin.
Several managers said that deploying helicopter money had a poor
track record and would have little or no credibility with financial
markets who would just see it as a sign that central banks had run
out of ways to stimulate growth.
"Helicopter money is quite controversial and may have some legal
barriers," said Joost van Leenders, chief economist at BNP Paribas
Investment Partners.
"The U.S. economy does not look in need of helicopter money and the
hawks at the ECB are far from convinced that it will work." But he
added that Japan might not be far from this experiment.
(Additional reporting by Maria Pia Quaglia Regondi; Editing by Toby
Chopra)
[© 2016 Thomson Reuters. All rights
reserved.] Copyright 2016 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed. |
