Salient to Investors:
Global investors are buying emerging-market debt and shares of well capitalized companies.
Anne Richards at Aberdeen Asset Management likes balance sheet strength, says many European equities are high risk and U.S. Treasuries are overvalued. Richards says investors are underestimating the health of Asian issuers – Likes Indonesian sovereign debt, Latin American corporate bonds, gold, European stocks with strong balance sheets and customers in emerging markets.
Jim McCaughan at Principal Global Investors said the euro zone will spur volatility and be a headwind for a few years, sees a 25 percent chance Europe’s leaders fail to deal with the crisis or get voted out of office and replaced by nationalist politicians who reject the euro, which would contract Europe’s economy by between 5 percent and 8 percent in a year. McCaughan dislikes U.S. Treasuries at current yields, likes emerging-market debt and equities, U.S. commercial property yielding 6 percent to 7 percent.
Jose Antonio Blanco at Global Asset Management said that, short of satisfying Germany that fiscal and structural reforms are in place, Europe’s weaker countries may have to wait until a major event spurs Merkel into taking bolder steps. Sees a lack of safe investments in Europe so keeping more cash.