Survey Shows SA Fund Managers Optimistic

by Philip Morton, Investors Offshore.com

22 March 2002

A Merrill Lynch survey of fund managers in South Africa has revealed that the majority are bullish on commodity prices, and also on the country's economic prospects over the forthcoming months.

The poll of 266 global fund managers, which was concluded last week, found that 100% of the SA fund managers questioned were upbeat about global prospects, and expected firmer global pricing power and less rand appreciation over the next twelve months. Merrill Lynch also revealed that optimism in South Africa has risen sharply with regard to the domestic economy.

In the short-term, the survey revealed, 47% (compared to 71% in February) are keen to reduce their overweight cash positions in favour of equities.

However, these results differ sharply from the responses given by fund managers in the US and United Kingdom, who appear to be far less bullish on global economic prospects. The Merrill Lynch Stock Market Conditions Indicator - which consolidates the responses of fund managers on key economic issues into one number - fell from +13.2 in February to +12.1 in March, showing that in general, US and UK fund managers have a more cautious view of world markets.

'Fund managers are very worried that all their optimism about growth and profits may be dashed if monetary policy is tightened,' explained David Bowers, the organisation's Chief Global Investment Strategist, and author of the survey.

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