Survey Shows Fund Managers Still Bullish on Stocks

Too much bullishness in the markets still — where are the bears? The market action is HORRIBLE, yet every analyst and strategist is bullish. Europe is melting down, the banking system in both the US and the EU is on verge, credit spreads are extreme. But analysts are bullish...

Interestingly, accordingly to the last sentence below, the European shares which have decline more, are a better contrarian bet than the US or emerging market ones.

(Bloomberg) — Global fund managers are bullish on stocks for the third quarter, as the turmoil in financial markets offers investors “attractive buying opportunities,” according to a HSBC survey. 

A survey of 12 investment companies overseeing $4.4 trillion in funds showed 63 percent are holding “overweight” positions on equities this quarter, up from 44 percent in the previous three months, HSBC said in a statement today. 

Some 57 percent of fund managers are “underweight” bonds in the third quarter, compared with 38 percent in the previous period. “Current market volatility has created attractive buying opportunities for long-term investors,” Geoffrey Pidgeon, the head of global investments at HSBC Australia, said in the statement. 

“While there is continued uncertainty around growth in the U.S., corporate earnings forecasts remain positive.” [...] The 11 percent slump in the MSCI All-Country World Index this year means the gauge is valued at 10.9 times estimated earnings, less than the five-year average multiple of 13.6 times. Profits for Standard & Poor’s 500 Index companies may grow 19.4 percent in 2011 from a year earlier, according to earnings estimates compiled by Bloomberg. 

[...] “Global fund managers are looking toward the emerging markets for opportunities and are focusing on Greater China equities as market expectations of the end of the Mainland’s tightening cycle continue,” said Pidgeon. China’s Policies Inflation is no longer a major concern in China and tightening policies should be eased, Wang Jian, secretary- general of the China Society of Macroeconomics [...]. 

The proportion of fund managers holding “overweight” positions on Greater China stocks climbed to 57 percent this quarter, compared with 25 percent in the previous three months, HSBC said. Half of all fund managers are “underweight” on European equities, up from 11 percent in the second quarter, HSBC said.

And, from another report published today as well:

(Bloomberg) — “Stocks still offer good long-term value,” said Kevin Gardiner, the global head of investment strategy at Barclays Plc’s Wealth unit, which manages about $266 billion for clients.