Nomura Securities 2012 Global Strategy Outlook: Will Lightning Strike Twice?
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Nomura Securities 2012 Global Strategy Outlook: Will Lightning Strike Twice?
Analyst, Ian Scott, said, "2011 witnessed a series of very negative developments: the intensification of the eurozone debt crisis, slower economic growth, tighter policies in emerging markets, political gridlock in the US, and an earthquake and nuclear disaster in Japan. Despite all this, global equities are only down by 5½%."
"Valuations and sentiment suggest that investors are going into 2012 in downbeat mood, with some extremely risk-averse behaviour recently...Although 2012 looks like being a challenging year from an economic and earnings growth perspective, this outlook appears to be factored into prices, a serious credit event almost certainly cannot be...So the key issue is whether a ‘lightning strike’ akin to Lehman Brothers’ bankruptcy happens next year. If not, stocks should be appreciably higher at year-end 2012...From a regional perspective, we favour overweighting emerging markets, Asia and Europe...We prefer Japanese stocks to the US market."
"Sectorally, we continue to like Technology, commodity producers, and, selectively, some cyclicals – including autos – already appear priced for recession...We overweight Financials, and Asian property, in expectation of at least a partial solution to the eurozone’s problems and some further easing in China. We underweight ‘defensive’ sectors...Stylistically, the market’s preoccupation with risk, while understandable, leaves stocks with superior growth and value looking attractive."
Analyst, Ian Scott, said, "2011 witnessed a series of very negative developments: the intensification of the eurozone debt crisis, slower economic growth, tighter policies in emerging markets, political gridlock in the US, and an earthquake and nuclear disaster in Japan. Despite all this, global equities are only down by 5½%."
"Valuations and sentiment suggest that investors are going into 2012 in downbeat mood, with some extremely risk-averse behaviour recently...Although 2012 looks like being a challenging year from an economic and earnings growth perspective, this outlook appears to be factored into prices, a serious credit event almost certainly cannot be...So the key issue is whether a ‘lightning strike’ akin to Lehman Brothers’ bankruptcy happens next year. If not, stocks should be appreciably higher at year-end 2012...From a regional perspective, we favour overweighting emerging markets, Asia and Europe...We prefer Japanese stocks to the US market."
"Sectorally, we continue to like Technology, commodity producers, and, selectively, some cyclicals – including autos – already appear priced for recession...We overweight Financials, and Asian property, in expectation of at least a partial solution to the eurozone’s problems and some further easing in China. We underweight ‘defensive’ sectors...Stylistically, the market’s preoccupation with risk, while understandable, leaves stocks with superior growth and value looking attractive."
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