International investors are the most bullish on stocks in at least 3 1/2 years, with close to two- thirds planning to raise their holdings of equities during the next six months, according to a Bloomberg survey.
As the global financial and business elite gather in Davos for their annual forum, 53 percent of respondents to the Bloomberg Global Poll also say equities will offer the highest return in the next year. That’s a 17 percentage point jump from the last poll in November and the most since the quarterly survey of investors, analysts and traders who subscribe to Bloomberg began in July 2009.
Equity market gains are expected to be widespread. More than three-in-five surveyed forecast the Standard & Poor’s 500 Index (SPX) and the MSCI Asia Pacific Index (MXAP) will be higher six months from now.
“Investors are tired of low yields in safe-haven assets so equities, both in developed and emerging markets, are the natural place to look,” said Ciaran Woods, an analyst at Citigroup Inc. in London and a poll participant. “We have a reasonably constructive base for riskier assets this year.”
Forty six percent of investors intend to increase holdings of emerging market equities in the next six months, compared with only eight percent planning to reduce exposure, the survey found.
While 69 percent still see Greece as likely to default, that’s the smallest amount since September 2010. Thirty percent say Portugal won’t be able to pay its bills, almost half the rate of a year ago, and Spain is viewed as credit worthy by 68 percent, the most in a year. Only 12 percent say Ireland is likely to default and 17 percent say the same of Italy.