Investors cut equity exposure to first underweight in 4 yrs-BAML

martes 19 de julio de 2016 10:56 GYT

By Claire Milhench

LONDON, July 19 (Reuters) - Global investors, fretting over economic growth and Brexit, have cut equity allocations to underweight for the first time in four years while raising cash to the highest in almost 15 years, a Bank of America Merill Lynch survey showed on Tuesday.

BAML's monthly global survey of fund managers showed a sharp reduction in risk-taking across the euro zone and the UK after Britain's June 23 vote in favour of leaving the European Union.

The outcome of the referendum wiped billions off share prices, pushed sterling to a 31-year low against the dollar and has raised fears of a recession in Britain.

The International Monetary Fund has also cut its global growth forecasts for the next two years, citing the "sizeable increase in uncertainty" due to Brexit, which is expected to take a toll on investment and consumer confidence.

In last month's survey, 30 percent of respondents had identified Britain leaving the European Union as by far the biggest 'tail risk' for world markets.

Not surprisingly then in this month's poll fund managers have voted with their feet, cutting their UK equity allocation to a net 27 percent underweight from a net 23 percent underweight. What's more, the percentage of investors looking to short UK equities was the highest since December 2009, the survey revealed.

Allocations to euro zone equities also tumbled to a net 4 percent underweight from last month's net 26 percent overweight. This is the first Eurozone underweight in three years, BAML said.

"For the first time in three years, global investors are underweight European stocks. Europe finally belongs to the bears," Manish Kabra, BAML's European equity quantitative strategist, told clients.   Continuación...