Saturday, March 29, 2008

IS THE sun peeking out now after the dark night of the US financial crisis?

There are perma bears who believe otherwise. There are born optimists for whom the sun will always shine. Increasingly, it seems that “experts” of various stripes are saying that indeed investors will feel the warmth of the sun soon. On March 20, US analyst Richard Bove was quoted by Bloomberg saying in a note to clients: “"I do, in fact, believe that the crisis is over. There will be more negative developments but they will be meaningless." UBS Investment Research and guru Barton Biggs are among other prominent voices who believe so too. The latest are Mark Mobius and Temasek Holdings’ fund management unit.In a March 27 article by Bloomberg, Temasek unit Fullerton Fund Management’s CEO said investors have passed ``the point of maximum fear'' amid the global credit squeeze and it expects to meet a target of US$3 billion in assets by June. Fullerton, which oversees US$2.5 billion of third-party money and an undisclosed amount of capital for Singapore's sovereign wealth fund, saw the U.S. Federal Reserve's decision to rescue Bear Stearns from bankruptcy as a turning point, Fullerton's Chief Executive Officer Gerard Lee said in the Bloomberg article.``The Fed coming in to facilitate JP Morgan Chase & Co’s purchase of Bear Stearns is a watershed event, and most bottoms are found during watershed events,'' Lee said in an interview in Singapore. ``From that perspective, we could have already crossed the point of maximum fear.''

Mobius is Singapore-based and author of numerous books on emerging markets.Templeton Asset Management Ltd.'s Mark Mobius said he ``generally'' agrees with Temasek's assessment that the markets have reached a bottom. ``If we haven't achieved it, we're damn close,'' Mobius, who oversees US$47 billion in emerging-market equities, said in a phone interview from Hong Kong on Mar 27. ``With the kind of liquidity that's pouring into the system, with the Fed, and now the European Central Bank and others putting more money into the system, we think stock prices are not going to remain down. We think there's a good chance of growth going forward.''

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