Chinese economy replaces EU debt crisis as investors’ top concern
May 17, 2013 Leave a comment
Chinese economy replaces EU debt crisis as investors’ top concern
Staff Reporter 2013-05-16
Predictions that China’s economy will face a hard landing leading to a commodity collapse has replaced the European sovereign debt crisis as one of the main concerns of international and domestic investors, with many reducing their investments in emerging markets and commodities to invest in Japanese and European equities, reports our sister paper Want Daily.
A report released by the Bank of America Merrill Lynch earlier in the month showed that many investors are currently forecasting a weakening Chinese economy, with those feeling positive about the country’s economic outlook dropping by 8%. It is the first negative figure in fourteen months, while 25% of the fund managers surveyed considered a hard landing a possibility in China, a sharp increase from the 18% recorded last month.
Approximately 29% of the fund managers have already reduced their investments in China’s commodity market, while investments in Japanese equities have increased for the seventh consecutive month, surpassing the 31% recorded in May 2006.On the threat posed by the European debt crisis, only 29% of those surveyed felt it was a still a key concern, down from the 42% recorded in April. Many investors now consider European equities to be undervalued and predict that the European Central Bank will take further actions to stimulate the region’s economies. Meanwhile, 34% of the fund managers believe that the European Central Bank should print money to lower interest rates and resolve the debt crisis.
Many investors have also increased their investments in bonds following predictions that countries around the world will experience an increase in inflation, however the proportion of those expressing concern fell to 30%, compared to the previous figure of 45%.
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