By Desmond Wong, Channel NewsAsia | Posted: 20 March 2009 1732 hrs
SINGAPORE: Where investors are concerned, the big question in the current market is when the selling will bottom out. Fortis Investments has warned that calling the recovery on equities too soon could cost investors money.
It said given the uncertainty in the market, bear market rallies will create a series of false starts as investors find their footing.
William de Vijder, global chief investment officer, Fortis Investments, said: "Some investors are nurturing hopes that there is improvement on the way, getting into the market, triggering a rise, while others will still be afraid... so you have this sequence of rallies, profit taking, rallies, profit taking."
Fortis is recommending that investors wait for a sustained recovery in stock markets for a sign that confidence has returned.
And as Asia has fewer problems holding back its economies, compared to the US and Europe, the region is likely to pull ahead in the race to recovery.
According to Fortis, the US and Europe are saddled with tight regulations and weak economic conditions.
"This is all going to weigh on the expected GDP and earnings growth for five, six or seven years. So this is going to, on a relative basis, weaken the outlook of Western markets compared to Asian markets," said Mr de Vijder.
Fortis said 2009 is expected to be tough for global markets, but Asian bourses should be in for an easier time from next year.