Posted on 07/15/2009 5:23:48 PM PDT by Steelfish
Funds drawn to China like 'moths to a flame'
Fund managers from across the world are shunning the West in favour of China and emerging markets, yet still seem deeply concerned that rally over the last four months may prove to be a false dawn.
By Ambrose Evans-Pritchard 15 Jul 2009
The July survey of investors by Merrill Lynch found that a net 63pc believe the world will recover over the next year, but they lack conviction and are not committing hard money to the rebound. “Asset allocators remain very cautious on global equities,” said the bank.
It noted a “very sharp increase” in cash as funds opt for caution, as well as a retreat from growth stocks into the safe havens of pharmaceuticals, health care, and utilities. Hedge funds have cut their net “long positions”, with many switching to the “short” side as the rally falters.
Despite the skittish mood, investors still seem drawn like “moths to a flame” towards Asia and emerging markets, convinced that the catch-up economies will vastly outperform the Old World over the next twelve months.
A net 54pc are overweight emerging markets, the second highest ever, led by Indonesia, China, Russia, and Brazil. They seem to be disregarding warnings that China may soon have to clamp down on rampant credit growth.
“Sentiment on emerging markets is so loaded that we could see some disappointment,” said Gary Baker, Merrill’s head of European equity strategy.
(Excerpt) Read more at telegraph.co.uk ...
China doesn’t seem very safe to me either
I believe the only safe bet is in ammo, and any company that manufactures it. Hell, probably anything directly related to firearms is a safe investment in the short term.
Almost half my equities are currently in China based firms, traded on the NASDAQ...I doubt the Chinese will enact “Cap and Tax”.
It would seem in these Chinese companies, all the profits would go to the locals. They know how to manipulate things. It would be like buying stock in a brokerage company, the rich guys are the ones who work there, not the nominal owners.
What do you think of China Yuchai (CYD)?
I wonder about that huge rally in the US market today... did anyone notice that the volume wasn’t anything to write home about? It’s going to end badly I think... (It’s all your fault Obama!)
Hadn’t heard of it...like Baidu (BIDU) though
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