Financial crisis: Worst over in global poll



By Agency Reporter

Wednesday, 22 Sep 2010


Three out of five global investors say the world economy has weathered the financial crisis and has stabilised two years after the collapse of Lehman Brothers Holdings Incorporated.


According to a report from Bloomberg Newyork, few believe the economy is recovering, with only one in six of those surveyed describing it as expanding, according to a global quarterly poll of 1,408 investors, analysts and traders who are Bloomberg subscribers.


Forty-one per cent aren‘t convinced the financial situation is stable and say further turbulence is likely.


”When taken as a whole, the world has stabilised,” says Uzi Zimmerman, a respondent to the Bloomberg Global Poll and managing member of Ventura Capital Management, a hedge fund in the Los Angeles area. ”The emerging markets of Asia and Latin America are providing support to the global economic malaise.”


There are still danger spots, including the threat of government defaults, respondents say. Over the last three months, the percentage of those who say it‘s likely Ireland will default more than doubled to 37 per cent, according to the poll, conducted on September 16 and 17.


Still, a majority see this as unlikely.


Investors are responding to the economic environment by managing their money conservatively, according to the poll, which has a margin of error of plus or minus 2.6 percentage points. More than 40 per cent are still hunkering down, while one in three are taking more risks. The rest say they are getting back to normal. Those percentages were little changed from the last poll in June.


”In the absence of clarity on numerous issues, we are much more diversified,” Buddie Ballard Jr., a principal in Alpha Capital Management in Austin, Texas, said. ”We‘ve increased our exposure into more asset classes with smaller position sizes and tactically apply stops to those positions” to limit losses.


The Paris-based Organisation for Economic Cooperation and Development said on September 9 that growth in the major industrial nations might slow to an annualised rate of about 1.5 per cent in the second half of this year from three per cent in the first half.


Europe is seen as a weak link in the world economy. More than three-quarters of those surveyed see a risk that the eurozone may dissolve eventually, and more than 20 per cent of those describe such a threat as looming. That‘s a more pessimistic take than in June, when a majority said the currency union would remain intact.


European investors are the most optimistic about the chances of avoiding a breakup of the eurozone; US investors the least.


Source: The Punch


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