S. Korea topples China as investors' favorite: Poll<\/p>\n
Reuters
\nHong Kong<\/p>\n
South Korea will topple China as fund managers' favorite Asian
\nmarket by early next year, with Australia and India creeping onto
\ninvestors' radar screens.<\/p>\n
South Korea was the top pick by 33.3 percent of fund managers
\npolled from both a three-month and one-year perspective in the
\nlatest quarterly funds survey by Reuters and Hong Kong-based fund
\nmanagement magazine, Benchmark.<\/p>\n
China, the fund managers' long-held favorite, was relegated to
\nsecond place with 22.2 percent and 11.1 percent of respondents
\nchoosing it over three and 12 months respectively.<\/p>\n
But China was also rejected by 11.1 percent as the least-loved
\ninvestment destination over three months -- the first time this
\nyear the economy was featured on the list of least-loved markets.<\/p>\n
Some fund managers have cut their weightings on overvalued
\nChinese stocks after a huge rally in the early part of the year.<\/p>\n
The poll of nine international fund management houses forecast
\nSouth Korea, China and Hong Kong as likely to emerge as the top
\nthree Asian markets in the next 12 months.<\/p>\n
Taiwan fell out of favor with 33.3 percent and 22.2 percent of
\nrespondents rejecting it over three and twelve months.<\/p>\n
Elsewhere in the region, Australia and India gained investor
\nconfidence after being shunned in previous polls.<\/p>\n
Australia was chosen by 11.1 percent of respondents who see
\nthe market as a safe haven for investments against rising global
\nrisks over the next one year.<\/p>\n
India was favored by 5.6 percent of respondents after the
\nlifting of economic sanctions by the U.S. imposed since 1998 in
\nreturn for New Delhi's support to Washington in its war against
\nAfghanistan.<\/p>\n
Fund managers cited increased risks after the Sept. 11 attacks
\nas the biggest threat to investment performance over the next
\nthree- and 12-month horizons.<\/p>\n
\"The major risk now is how U.S. retaliation efforts against
\nthe terrorist attacks will evolve and the resulting impact on
\neconomic growth,\" JF Asset Management said in the survey.<\/p>\n
Fears over a protracted U.S. economic downturn prevailed with
\n19.5 percent of all respondents naming it the biggest risk in the
\ncoming year.<\/p>\n
Events related to the Sept. 11 attacks spurred risk aversion
\namong money managers, with 44.4 percent going overweight on
\ndefensive and healthcare stocks over the next three months.<\/p>\n
The abrupt global economic downturn after the attacks
\nreinforced investors' loss of faith in technology, with 22.2
\npercent of fund managers going underweight on the sector over the
\nnext three- and 12 months.<\/p>\n
Bonds and cash were chosen by 22.2 percent and 11.1 percent of
\nportfolio managers as the assets to hold over the next three
\nmonths given volatile global stockmarkets.<\/p>\n
But equities remained as most fund managers' best bet over the
\ncoming year with 88.9 percent expecting them to outperform.<\/p>\n
Europe was the most-preferred destination for funds outside
\nAsia, with 33.3 percent of money managers choosing to invest in
\nthe continent over the next 12 months.<\/p>\n
The U.S. stock market, the world's largest, found favor with
\n27.8 percent of asset managers with a one-year horizon.<\/p>\n
By contrast, Argentina was the least loved of all non-Asian
\nmarkets, with 22.2 percent of fund managers rejecting it over a
\nthree-month and one-year horizon.<\/p>\n
Nagging doubts over Argentina's ability to restructure its
\nmassive debts have cast a shadow over emerging market assets.<\/p>",
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