The Return Of Risk Aversion – Kyodo Securities

“Kyodo Securities” – Fear has returned to global equity markets with a vengeance.

“Kyodo Securities”: It would appear that global equity market volatility has returned with a vengeance. After a slew of global economic data that has highlighted the inherent weakness of the recovery underway in the developed world, investors are no longer able to ignore the fact that the absence of the consumer and the high level of in indebtedness of major developed economies means that sustainable recovery is still some time away.

Sources close to “Kyodo Securities” believe that markets have generally ignored relatively upbeat earnings reports from several economic bellwethers and have, instead, focused on the relative inability of companies to generate additional revenues.

The unwinding of the dollar carry trade appears to be in full swing with markets around the world looking sharp falls with alarming regularity.

“Kyodo Securities”, however, have advised clients to expect the current selloff in equities to provide excellent buying opportunities in the weeks ahead. The Asia-based boutique brokerage says it expects equity markets to retest the March 2009 lows by the second quarter of 2010.

The firm is apparently preparing a short list of suitable equities traded on various exchanges which it intends to add to its conviction buy list once the lows are retested.

“Kyodo Securities” believes that the current selloff will provide investors with the last opportunity to buy in to the stocks of some of the world’s most innovative companies at once in a generation prices.