Nikko Asset Management has further increased its overweight allocation to global equities as outlook for the global macroeconomic environment continues to improve.
Nikko Asset Management’s head of the global investment committee John Vail told InvestorDaily that while there are some concerns about the global economy, "none of them are enough to halt the upside momentum of equity prices".
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"Even rising US interest rates are consensus now, so although there may be volatility as [it] crystallises, it may be no more problematic than the nearly-completed tapering process.
"As for employment, we continue to believe that payrolls will expand at a healthy rate, especially in the housing construction and related services areas.
He added that the rise in car sales was perhaps the strongest sign of growth in the US.
"Retail spending is also solid; new home sales are rebounding; and ex-aircraft durable goods orders have accelerated further in recent months and are surging if you include aircraft," he was quoted by the publication as saying.
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By GlobalDataVail said the committee also believes Japan’s recovery is on track.
"Our positive view on inventory building and net exports is likely what sets us apart from consensus, but our forecasts are hardly aggressive and seem completely logical.
While conditions in Europe were weaker in the second quarter than Nikko AM expected, primarily due to the effects of the Ukraine crisis, Vail said this should improve.
