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Global fund managers are showing strong bullish sentiment towards equities, reaching levels not seen in nearly three years, according to a report by BofA Securities. The optimism is primarily driven by expectations of interest rate cuts by global central banks, rather than anticipated growth in earnings per share (EPS).
The report indicates that 18% of fund managers surveyed by BofA Securities are overweight on Indian equities, although this level of optimism has slightly declined from levels observed in March 2024. Meanwhile, cash levels among global fund managers have dropped to a three-year low of 4%, with allocations to stocks reaching the highest level since January 2022.
The survey, conducted between May 3 and May 9, 2024, involved 245 panelists managing assets worth $642 billion. Among these, 209 participants with assets worth $562 billion responded to the global Fund Manager Survey (FMS) questions, while 134 participants managing $301 billion in assets responded to regional FMS questions.
India, Taiwan popular
According to BofA Securities, Japan tops the preference list for equity markets in the Asia Pacific (APAC) region, with a net 44% of global fund managers favouring Japanese equities, followed by Taiwan at 21%. Conversely, Thailand (net negative 18%), Indonesia, and Australia (net negative 15% each) are among the least favoured equity markets in the APAC region, with fund managers remaining underweight on these markets.
Regarding India, BofA Securities notes that Taiwan and India are popular investment destinations after Japan, although India’s appeal has diminished since March. Thailand, on the other hand, remains unattractive to investors despite recent market sentiment.
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