Global equity markets will perform strongly in 2009, according to fund manager Prahmit Ghose, who sees excellent buying opportunities amongst big players with strong balance sheets.
Ghose, the Dublin-based manager of the Elite Bloxham Equity Income fund, expects markets to hit rock bottom within the next few months, but is taking a bullish approach into 2009.
“By anyone’s standards 2008 has been a bumpy year,” he says, “but we are now seeing the green shoots of recovery. In common with many of our competitors, we are taking a cautious short-term approach, running 15%+ liquidity – but will look to decrease liquidity as opportunities unfold in the coming months.”
Ghose says large cap firms with cash to spare have opportunities to acquire other firms cheaply, as shown by Bank of America’s takeover of Merril Lynch, or Lloyds TSB’s acquisition of HBOS.
Bloxham is also looking to increase the fund's exposure to North America to 30% from a current exposure of 25%, but plans to remain underweight in Asia with an allocation of 8.5%.
Ghose expects dividend growth to remain low in 2009 at around 4% to 5%, but aims to increase this to between 6% and 7% on average over the next five years as the global economy begins to revive.
He highlights utilities, telecoms, pharmaceuticals and oil companies as potentially strong players in the aftermath of the current downturn.
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