Eq­ui­ties in de­vel­oped, emerg­ing mar­kets of­fer growth po­ten­tial

Bar­clays re­leases its Q3 2017 ‘Com­pass’ re­search re­port

Kuwait Times - - BUSINESS -

KUWAIT: Bar­clays’ Pri­vate Bank re­leased its Q3 2017 “Com­pass” Re­port, which ex­am­ines ma­jor as­set classes glob­ally. The lat­est re­search re­port re­vealed that eq­ui­ties in De­vel­oped and Emerg­ing Mar­kets con­tinue to of­fer best growth po­ten­tial for in­vestors seek­ing to take ad­van­tage of tac­ti­cal in­vest­ment op­por­tu­ni­ties across the globe.

The Q3 tac­ti­cal al­lo­ca­tion high­lighted in Bar­clays’ lat­est edi­tion of the Com­pass Re­search Re­port main­tained an over­weight po­si­tion in De­vel­oped Mar­kets Eq­ui­ties es­pe­cially with lead­ing in­di­ca­tors, re­lated to this as­set class, cur­rently paint­ing a pos­i­tive pic­ture for the fu­ture. Bar­clays’ strate­gists be­lieve that both US and Euro­pean stock mar­kets (ex­clud­ing the UK) are cur­rently seen to of­fer su­pe­rior growth po­ten­tial for in­vestors.

The re­port also main­tained its over­weight al­lo­ca­tion to Emerg­ing Mar­kets Eq­ui­ties as the busi­ness cy­cle con­tin­ues to firm up; a view which is sup­ported by the sta­bi­liza­tion of busi­ness con­fi­dence sur­veys and trade data. Korea, Tai­wan and China (off­shore) main­tain their po­si­tions as mar­kets of choice. As a re­sult, Bar­clays’ In­vest­ment Com­mit­tee low­ered its al­lo­ca­tion to Cash and Short-Ma­tu­rity Bonds from neu­tral to un­der­weight.

Sim­i­larly, High Yield & Emerg­ing Mar­kets Bonds al­lo­ca­tion also re­mained over­weight. Although rel­a­tively ex­pen­sive, Bar­clays’ strate­gists con­tinue to view High Yield Bonds as at­trac­tive in the con­text of a fixed in­come com­plex within a mod­er­ate risk port­fo­lio. Com­ment­ing on the re­port, Francesco Grosoli, Bar­clays’ Head of Pri­vate Bank for Europe, the Mid­dle East and Africa (EMEA), said: “While the out­look for the global econ­omy con­tin­ues to im­prove, as in­di­cated by cor­po­rate earn­ings and trade sta­tis­tics, in­vestors are best served by con­tin­u­ing to di­ver­sify their port­fo­lios across both as­set classes and ge­ogra­phies.”

He added: “Emerg­ing Mar­kets Eq­ui­ties in gen­eral con­tinue to show ro­bust growth po­ten­tial; how­ever, it’s worth high­light­ing the no­table change in EM eq­uity in­dices which are wit­ness­ing a shift from the en­ergy and ma­te­ri­als sec­tors to the in­for­ma­tion tech­nol­ogy sec­tor.”

‘Com­pass’ also as­signed an un­der­weight al­lo­ca­tion to both De­vel­oped Gov­ern­ment Bonds and In­vest­ment Grade Bonds, given that nom­i­nal yields of­fered by large chunks of the gov­ern­ment bond uni­verse as well as in­vest­ment grade cor­po­rate bonds are still neg­li­gi­ble.

Ad­di­tion­ally, the re­port main­tained its neu­tral view on Com­modi­ties, in­di­cat­ing that in­vestors are more likely to ben­e­fit from tilt­ing their in­vest­ments to­wards oil and shy­ing away from gold, as it con­tin­ues to be sus­cep­ti­ble to fur­ther US in­ter­est rate hikes. The lat­est in­stal­ment of the re­port has also main­tained its neu­tral al­lo­ca­tion to both Real Es­tate and Al­ter­na­tive Trad­ing Strate­gies.

DHAKA: A Bangladeshi woman walks through a veg­etable mar­ket at Kar­wan Bazar in Dhaka on Sun­day. Kar­wan Bazar is one of the largest whole­sale mar­ket­places in the Bangladeshi cap­i­tal. —AFP

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