Fund Manager Pessimism Shifts to Japan: Survey

London, Aug. 17 (Jiji Press)--The spotlight of investor pessimism
has shifted away from Europe to Japan, a Merrill Lynch fund managers survey
showed Tuesday.
Japan took a hammering in August, with a net 27 pct of asset
allocators underweight Japanese equities, compared with 11 pct underweight
in July.
The euro zone, meanwhile, fared much better. Greater optimism about
Europe's banks, coupled with recent economic data, meant investors were 11
pct overweight European equities, a huge swing from the 34 pct underweight
position of three months ago.
"I think there's been a trade-off this year between Europe and
Japan," said Patrick Schowitz, European equity strategist at BofA Merrill
Lynch Global Research.
"When the European sovereign debt crisis hit, asset allocators
moved out of Europe and saw Japan as the alternative they could invest in.
Now the crisis has obviously come under a bit of control in Europe, and
Japan is looking more scary," Schowitz said.
"Historically, investors tend to be only overweight one or the
other. Clearly right now Europe is seen as the safer, and cheaper bet."
Sentiment towards the yen was also gloomy. A net 62 pct of
investors saw the Japanese currency as overvalued, up from 55 pct in July,
marking the highest overvalued conviction level ever seen in the survey.
Elsewhere the survey showed a net 5 pct of respondents predicting
that the global economy would improve in the next year. This represents a
modest turnaround from July, when a net 12 pct of fund managers predicted
the world economy would deteriorate.
A total of 187 fund managers participated in the global survey,
conducted from Aug. 6 to Thursday.


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