Investors around the world have reduced their risk appetite in the wake of the sell-off in stock markets last month, according to a survey on fund managers worldwide released by Merrill Lynch yesterday.
The US brokerage polled a total of 199 fund mangers who manage a combined US$668 billion in assets for the monthly global survey between March 9 and March 15.
The survey showed that global money managers have heightened their aversion to risk and portfolio managers have increased their cash balances sharply, up from 3.8 percent to 4.4 percent, with 30 percent of respondents saying they are "overweight cash".
Merrill Lynch's Composite Indicator for Risk Appetite fell five points this month to record one of its lowest readings of the past five years. The survey suggests portfolio managers have shrunk their investment time horizon to an average seven months, the shortest in four years.
"Investor visibility is at its poorest since the spring of 2003 when Iraq was invaded and fears of global deflation were high," David Bowers, independent consultant to Merrill Lynch, said in a statement released yesterday.
"That risk has been re-priced is not a surprise. What is interesting is the extent to which this sell-off reflects a more fundamental reassessment by investors of global macro prospects," Bowers said.
Investors are slightly more cautious about the outlook for economic growth and corporate profits, but only 10 percent of those polled believe that a global recession is likely in the next 12 months, the survey said.
The majority of investors have not abandoned equities, as 34 percent of portfolio managers believe that stock markets are unlikely to be lower six months from now, up from 15 percent last month, and 25 percent of asset allocators intend to raise their exposure to equities over the next three months, the poll said.
The poll suggested that investors are concerned about the possibility of increased "country risk" associated with US assets, and the US has the least favorable outlook for corporate profits, with the Eurozone the most favorable.
Taiwan’s technology protection rules prohibits Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) from producing 2-nanometer chips abroad, so the company must keep its most cutting-edge technology at home, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. Kuo made the remarks in response to concerns that TSMC might be forced to produce advanced 2-nanometer chips at its fabs in Arizona ahead of schedule after former US president Donald Trump was re-elected as the next US president on Tuesday. “Since Taiwan has related regulations to protect its own technologies, TSMC cannot produce 2-nanometer chips overseas currently,” Kuo said at a meeting of the legislature’s
GEOPOLITICAL ISSUES? The economics ministry said that political factors should not affect supply chains linking global satellite firms and Taiwanese manufacturers Elon Musk’s Space Exploration Technologies Corp (SpaceX) asked Taiwanese suppliers to transfer manufacturing out of Taiwan, leading to some relocating portions of their supply chain, according to sources employed by and close to the equipment makers and corporate documents. A source at a company that is one of the numerous subcontractors that provide components for SpaceX’s Starlink satellite Internet products said that SpaceX asked their manufacturers to produce outside of Taiwan because of geopolitical risks, pushing at least one to move production to Vietnam. A second source who collaborates with Taiwanese satellite component makers in the nation said that suppliers were directly
Top Taiwanese officials yesterday moved to ease concern about the potential fallout of Donald Trump’s return to the White House, making a case that the technology restrictions promised by the former US president against China would outweigh the risks to the island. The prospect of Trump’s victory in this week’s election is a worry for Taipei given the Republican nominee in the past cast doubt over the US commitment to defend it from Beijing. But other policies championed by Trump toward China hold some appeal for Taiwan. National Development Council Minister Paul Liu (劉鏡清) described the proposed technology curbs as potentially having
EXPORT CONTROLS: US lawmakers have grown more concerned that the US Department of Commerce might not be aggressively enforcing its chip restrictions The US on Friday said it imposed a US$500,000 penalty on New York-based GlobalFoundries Inc, the world’s third-largest contract chipmaker, for shipping chips without authorization to an affiliate of blacklisted Chinese chipmaker Semiconductor Manufacturing International Corp (SMIC, 中芯). The US Department of Commerce in a statement said GlobalFoundries sent 74 shipments worth US$17.1 million to SJ Semiconductor Corp (盛合晶微半導體), an affiliate of SMIC, without seeking a license. Both SMIC and SJ Semiconductor were added to the department’s trade restriction Entity List in 2020 over SMIC’s alleged ties to the Chinese military-industrial complex. SMIC has denied wrongdoing. Exports to firms on the list