Thursday, May 19, 2011

Investors shifting to cash from commodities

Global investors have tempered their optimism about the US and world economies and plan to put more of their money in cash and less in commodities over the next six months, a Bloomberg survey found. Almost one in three of those questioned say they will hold more cash, while 30% intend to reduce investments in commodities, according to a quarterly Bloomberg Global Poll of 1,263 investors, analysts and traders who are Bloomberg subscribers. Both results are the highest since the survey began asking the question last June.

A plurality – 40% – expects oil prices to fall in the next six months, the first time respondents felt that way since the inception of this poll in July 2009.The “big-stimulus game is over”, says Bill O’Connor, a poll participant and founder of Sagg Main Capital hedge fund in New York, in explaining why he’s moving money into cash as the US Federal Reserve winds up its bond-buying programme and US lawmakers look to cut the budget.

Fewer than four in 10 of those surveyed describe the US and global economies as improving, down from about 50% who felt that way back in January. US economic growth slowed to 1.8% in 1Q2011,down from 3.1% in 4Q2010. Home prices fell in more than three-quarters of US cities in 1Q2011, according to the National Association of Realtors.

The poll, conducted on May 9 and 10, also found that investors’ ardour for stocks is cooling. Two in five intend to increase their exposure to equity markets over the next six months, down from almost three in five in the last poll in January. US investors, in particular, have become less keen on stocks: Just 37%say they are increasing their exposure, down from57% in the previous poll.

The survey was taken after a turbulent week in the markets that saw commodity prices suffer their biggest decline in more than two years. The Standard& Poor’s GSCI Total Return Index of 24 commodities dropped 11% two weeks ago, led by a 27% collapse in silver prices. The gauge fell 3.9% on May 11 and another 0.9% by 9.29am in London on May 12.Crude oil fell below US$100 a barrel in New York trading on May 11.More than half of those surveyed expect silver prices to fall further in the next six months. Sixteen percent identified commodities as one of the markets that will suffer the worst returns over the next year, more than double the proportion that said that in January. Commodities have “become a bubble, with a lot of non-specialist investors”, says Ken Welby, a salesman at KNG Securities LLP in London and a poll participant. “Demand cannot cope with the price rises that we have seen.”

While the attractiveness of the US is ebbing, it still comes out on top when survey participants are asked to name the best countries to invest in. Thirty-one per cent cite the US as among the markets that will offer the best returns over the next year, down from 37% in January.

US investors are more enthusiastic about their country than those in either Europe or Asia. Almost two in five Americans picked the US as a top market. Only one-third of Asians and less than a quarter of Europeans felt that way. Brazil and China trail the US in the poll, with one in four investors citing those countries as good places to put money. Fifteen per cent single out Japan, almost double the amount that did so in January, before the country suffered a devastating earthquake and tsunami that left 24,837dead or missing as at May 7 and cratered its stock market. “We have confidence that the Japanese are addressing the issues, and that earnings will not disappoint the market,” says Welby. “I see it as a relative-value trade.” More than two in five investors see Japan’s Nikkei225 Stock Average rising over the next six months. That compares with about one in four who said that back in January.

The Nikkei average on May 11 rose 45.50, or0.5%, to 9,864.26. That’s down from 10,254.43on March 11, the day of the earthquake. The gauge dropped 1.5% on May 12.Investors have turned less optimistic about other stock markets. Less than half see the Standard & Poor’s 500 Index rising during the next six months; in January, almost two-thirds forecast an advance.

About one-quarter in the latest poll say they expect the stock gauge to fall. The S&P 500 fell 1.1% to1,342.08 on May 11 in New York. “US stocks will have a 5% to 8% decline in the coming months,” says Joe Larizza, a director at Vining Sparks IBG in Memphis, Tennessee, and a poll participant. “I see energy and food prices causing a drag on the economy.” Global investors still consider equities to be among the most lucrative places for their money, with more than one in three forecasting that stocks will provide superior returns over the next year.–Bloomberg LP

Publish date:15/05/11


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Warren E. Buffett(沃伦•巴菲特)
Be fearful when others are greedy, and be greedy when others are fearful
别人贪婪时我恐惧, 别人恐惧时我贪婪
投资只需学好两门课: 一,是如何给企业估值,二,是如何看待股市波动
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