Kooyman warns as market optimism soars
October 13, 2009
By Mzwandile Jacks
After investment management confidence surged in the third quarter, there was danger managers were getting too bullish about the market recovery, Kokkie Kooyman, the head of Sanlam Investment Management Global, warned yesterday.
"The problem is that the developed world will not grow as fast as the market expects. (Developed countries) are certainly not going to grow faster, like emerging markets, which are expected to grow at 4 percent to 5 percent," he said.
"The developed world will only grow by about 1 percent because of high levels of consumer debt and government deficits, which stand at 12 percent. This is a risk."
He spoke after auditing firm Ernst & Young released its quarterly investment management survey. The survey showed investment managers' confidence rose from 60 points in the second quarter to 86.
This was on the back of positive investor sentiment despite continuing lower profits.
Ernst & Young would not name investment managers that participated in the survey.
Kooyman said investment managers were beginning to think the "worst is over".
Ernst & Young said the revival of confidence in the investment management sector was being experienced by small and large managers alike.
Confidence levels at the large managers rose from 61 to 84 points, while small ones rose even more sharply, from 57 points in the second quarter to 89. This is the 29th quarterly survey to measure confidence in the asset management industry, conducted by the Bureau for Economic Research in Stellenbosch.
Chris Sickle, the lead asset management director at Ernst & Young, said this was the second consecutive quarter that investment confidence had rocketed after touching its lowest point in the first quarter.
"The reason for the high performance is not difficult to gauge. Equity markets seem to be rising again and there is talk of an end to the recession in much of the developed world," Sickle said.
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