Bearish investors in emerging markets 'virtually extinct'
A survey by Societe Generale showed very few bearish investors for a short-term horizon in emerging markets, while bulls advanced
Investors in emerging markets are bullish again, a survey of 85 clients in Asia, Europe and the US by Societe Generales cross asset research team showed.
The survey showed that over the short-term (2 weeks) 77.6% of clients were bullish towards emerging markets in November, while the population of bearish EM investors is now virtually extinct, the banks research team said in a statement.
The number is up from 60.7% of investors who said they were bullish on emerging markets over a short term in October. Only 3.5% of investors were bearish in November compared with Octobers 26.2%, while 18.8% were neutral, higher than the 13.1% in October.
On a longer, 3-month horizon, investors were even more positive, with 89.4% being bullish compared with Octobers 77.4%; 7.1% were bearish and 3.5% neutral.
The sample of investors comprised 42 so called real money investors such as pension funds and 43 hedge funds.
Among real money investors, 92.9% gave a bullish answer for the next 3 months, while the percentage was 86% for hedge funds.
Investors have rebuilt their risk positions markedly compared with October, increasing their risk-taking, the survey showed.
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When comparing sentiment with views, the banks analysts said, there were more investors than a month earlier who felt they were under-invested; 48.2% of the total of investors surveyed felt they were under-invested in emerging markets, while 20% felt they were over-invested.
I guess EM investors are keen to brush away the short-term risks then, including the fiscal cliff. Interestingly, the positioning picture looks stronger and stronger, Benoit Anne, head of market strategy at Societe Generale, said.Indeed, a huge amount of real-money investors feel that they are bullish but still under-invested. If this is true, the first quarter of 2013 is bound to be spectacular.