Most Global Fund Managers Favor BAT And FAANG, Bearish Of Europe

DAX stock exchange
The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, March 22, 2019. (Photo: REUTERS/Staff)

The latest Bank of America Merrill Lynch survey revealed that many global fund managers are bullish on China's BAT firms and the United States' FANG tech companies. On the contrary, most of the surveyed fund experts are negative over European stocks.

The survey conducted from April 5-11 found out that despite the slowing global economy, a large number of global fund managers are betting on Chinese tech behemoths Baidu, Alibaba, and Tencent (BAT). In the U.S., fund managers rooting for Facebook, Amazon, Apple, Netflix, and Google (FAANG).

While this may be good news for China and the United States, it's the opposite of Europe. The survey involving 187 participants indicated that most global fund managers are not very optimistic of European stocks.

Some analysts attributed the bullish approach on European stocks to the Brexit crisis that has been affecting many industries in the eurozone. As for bullish outlooks on China's BAT and the Americas' FAANG companies, economic experts noted that positive updates on the China-U.S. trade dispute have affected trade forecasts.

Despite some positivity for certain Chinese and U.S. firms, most fund managers still see a downtrend in global economic growth. 70 percent of participants said they are expecting a global recession to kick off by the second half of 2020 or potentially later in the year.

During the weekend, global finance officials called on countries to take the necessary steps to boost growth in their respective economies. Finance leaders noted that seemingly tighter monetary conditions and international trade disputes are taking a toll on the global economy.

"While we expect to see a pickup (in growth) next year, trade tensions, geopolitical risks, political instability are among the challenges," chairman of the International Monetary Fund's (IMF) steering committee, Lesetja Kganyago, said.

Governments have been tapped to find a balance between debt sustainability and demand support schemes. The call was made during the spring meetings between the World Bank and the IMF in Washington. Finance leaders displayed a more serious mood during the discussions, igniting talks about just how worried economic experts are of what could come.

Last week, IMF Managing Director, Christine Lagarde, warned of high levels of uncertainty in global economies. She said that the organization is expecting to see growth rebounds next year but this year could be tougher for some economies.

Lagarde added that the forecast for 2020 is still "precarious and subject to downside risks." Her statements came after it was estimated that around 70 percent of the global economy continues to suffer slower growth.

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