Now’s the time investors should buy emerging market shares and bonds, according to a leading fund manager.
Kames Capital’s Chief Investment Officer Stephen Jones believes they have reached such a low level that investors should not hold back.
He explained emerging markets have had a difficult year and leading many fund managers to reduce their holdings to a neutral position.
“The valuations are not good, but they are certainly attractive,” said Jones.
“Some shares and bonds are looking distressed and many investors are worried about the effect any increase in US interest rates and a further strengthening dollar may have.
Bad news adjustment
“But I believe the market has adjusted to the bad news and the prices are about right.”
“I am taking the neutral position for the rest of the year and reassessing where to go based on US data that will lead the way to an eventual US interest rate rise.”
Jones also argues the market is positive for stock pickers and that emerging market companies that can deliver earnings will give decent returns.
“Investors need to carefully pick what to hold and what to sell,” he said. “I often see falls of up to 20% as companies have disappointing profit news.”
He also suggests investors should keep an eye on European equities as share valuations look attractive.
BP profits beat expectations
Troubled oil giant BP more than bettered market expectations for third quarter profits.
Despite problems with falling oil prices and the spiralling costs of clearing up the 2010 Gulf of Mexico oil spill, the company predictably showed lower profits, but not as low as the markets feared.
Revenue was $55.9 billion compared with $94.8 billion 12 months earlier.
Profits were down by almost half from $3 billion last year to $1.8 billion. Analysts had expected a figure of around $1.2 billion.
The company disclosed the total cost of the Gulf of Mexico clean up would now hit $55 billion.
“BP is looking for a price of around $60 a barrel for oil and is reining back infrastructure investment in a bid to control costs,” said a spokesman for the Share Centre.
“We recommend BP as a buy for those happy with intermediate risk whether they are looking for growth or income.”
