13 August 2009
Published in: Investment risk, Market risks
Worst of market turmoil is over, say European investors
In a second quarter survey by Fitch of Europe's senior credit investors -- of which 22% were insurance companies, 6% pension funds and 63% traditional asset management firms -- 72% of respondents believed the worst disruption is behind them, up from 29% in the first quarter of 2009.
This optimism was also reflected in the estimates of the length of the recession which have "shortened considerably," according to Fitch analyst Trevor Pitman. In the Q1 survey, the majority thought the recession in emerging Europe would be more than 24 months, whereas most now think it will be over in 12-24 months. Although expectations for the Eurozone remain fairly stable, the UK is perceived to be in a better position than three months ago, with 25% expecting it to stay in recession for more than 24 months, down from 42% in Q1.
The main area of concern is the availability of global liquidity, with over a quarter of respondents rating this risk as "high." This had, though, fallen from 40% in the Q1 survey. Another area of concern is expectations for default/market driven losses: almost half think we are yet to see the peak of the loss-taking.
The survey featured 62 responses from 100 of the top investing institutions in Europe. The full results can be found in the report by Fitch entitled European senior credit investor survey, June 2009.
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