Cash holdings remain high while market claws back ground

6 August 2009
| By Benjamin Levy |
image
image
expand image

Cash holdings have remained high among investors despite evidence of a sustained rebound in world share markets, according to the head of investment strategy at UBS, George Boubouras.

Boubouras claimed the rally in the market is the start of a longer upward trend that will occur across most global share markets.

Australia, Britain, the United States, Europe, Japan, Hong Kong and China will benefit from the trend as investors look to leverage their exposure in the years ahead, he said.

The 3,120 basis point mark in March was the lowest point in 2009, and markets will move to more normal valuations over the next 12 months, Boubouras said. The share market has rallied 38 per cent since March.

However, many investors are still stranded in cash while global equity has rebounded, with the cash weightings for super funds, institutional funds and private clients hitting record levels. Cash has also been falling, but it still remains above long run average levels, Boubouras said.

The equity market has already discounted further deleveraging, and investors in cash will look to enter the market if there is a pullback, he said.

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest developments in Super Review! Anytime, Anywhere!

Grant Banner

From my perspective, 40- 50% of people are likely going to be deeply unhappy about how long they actually live. ...

11 months ago
Kevin Gorman

Super director remuneration ...

11 months 1 week ago
Anthony Asher

No doubt true, but most of it is still because over 45’s have been upgrading their houses with 30 year mortgages. Money ...

11 months 1 week ago

Westpac has delayed its rate cut forecast, aligning with its peer NAB’s outlook on the likely trajectory for the Reserve Bank of Australia’s cash rate....

51 minutes 5 seconds ago

The government’s adjustment to the Future Fund’s mandate could set a dangerous precedent, warns an economist, raising concerns that it may pave the way for problematic fu...

9 minutes 48 seconds ago

The proposed reforms have been described as a key step towards delivering better products and retirement experiences for members, with many noting financial advice remain...

2 hours ago