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Deutsche sees 2010 corrections as buying opportunities

Date: 02 Feb 2010

The bank’s wealth management team is advising clients to be dynamic in asset allocation. It believes the global economy is strong enough to withstand a withdrawal of government stimuli, and urges investors to seize on market dips.

Keywords (click to search): [Deutsche Bank] [wealth management] [Christian Nolting]

Leigh Powell
The global economy is strong enough to withstand a gradual withdrawal of government stimuli, and consequent stock market dips should be viewed as a buying opportunity, says Deutsche Bank.

The most pressing concern among investors is that the present recovery from the global financial crisis is not sustainable, and that the unwinding of stimulus packages combined with the tightening of fiscal policies will erode confidence and cause a second dip in financial markets.

Such fears have been evident in Hong Kong and China already this year. When Beijing surprised the market last month by announcing two hikes in banks’ reserve requirement ratios – the amount of capital they are required to keep on deposit and not lend – indices in both locales sank.

Over the past two weeks, the Shanghai Stock Exchange Composite Index has dropped 9.4%, while the Hang Seng Index has fallen 6.6% over...

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