"Fund managers participating in Portfolio.hu’s monthly poll stopped in their tracks and watched in awe as the snappy uphill march of the Budapest Stock Exchange (BSE) screeched to a halt. They have grown more pessimistic both for the short- and the long-term outlook on the BUX index relative to what they projected a month ago.The sudden change is clearly reflected in the fact that none of the respondents would go 'overweight’ with local stocks compared to their own benchmark. It may be attributed to the build-up of this gloom that the fund managers shifted their focus towards Richter, a defensive stock, while fewer of them named OTP as their top pick than in October.
The contributing fund managers to the poll were: Aberdeen, Aegon, Allianz, Buda-Cash, Budapest Fund Management, CIB, Citadella Consulting, Concorde, Dialóg, Erste, Equilor, Generali, ING, K&H, OTP, QUAESTOR, Pioneer, Raiffeisen, RCM.
Although the BUX index conquered yet a new high in October, the momentum on the global scene has faded by the end of the month. The downward correction has pushed the index down close to the 50-day moving average and even below that technically important level occasionally in the past few days.
Therefore, we should not wonder why an increasing number of analysts and market players are murmuring about the imminent start of a long-awaited correction on markets that are by far not undervalued.
The fund managers polled by Portfolio.hu have shed some of their enthusiasm about the prospects of the BSE both for the short and the long terms. Although a majority of the respondents, 55%, continue to expect the BUX index to hover in a +/-5% range over the next three months, the number of those projecting a decline in the index has grown from a month ago. In October, there was a single fund manager that forecasted a BUX fall of over 5%, while in the current poll already eight of the respondents were of the same view.
The lights have started shimmering on the longer horizon, as well. While most of the respondents continue to foresee a 5-15% rise in the BUX index, there has been no projection for a surge of over 15% for the next 12 months. Moreover, it has not occurred since 2005 that a quarter of the respondents expected the index to drop by more than 5% on this horizon."
More from the source: Portfolio Online Financial Journal
05.11.2009