A portfolio manager at PIMCO, a leading global asset manager with more than US$2 trillion under management, has provided a bullish assessment of global markets.
Despite many global stock indexes sitting around all-time highs, Erin Browne, who’s based in PIMCO’s Newport Beach office says she believes there’s strong potential for additional upside in stocks across the board.
“Particularly as we move through earnings season and we start to have more forecasts for what the year ahead is going to look like,” Ms Browne told Bloomberg.
“While certainly investors have priced in a lot in terms of a normalisation in certain segments of the market, I think there is still room to run, particularly if you look at those stocks that are most exposed to a return to normalisation in travel, in leisure and entertainement.
In Asia markets, she said she believes casino stocks look particularly attractive.
“In Asia, some of the gaming names is where we don’t think that the market has fully recognised the full potential for a pick-up in the back half of the year in those names.”
Hong Kong-based casino operators including Melco Resorts and Entertainment (NASDAQ:MLCO), Galaxy Entertainment Group (HKG:0027) and SJM Holdings (HKG:0880) have all recorded modest share price gains in recent months.
Browne warns her bullish views could be impacted by the ongoing threat of COVID-19, particularly in the Asia region. She also says investors should pay close attention to inflation.
“Certainly, we’re not at the end of the virus yet, we still have a long way to go across different countries in terms of vaccinations… I think you’re going to see this play out throughout the next six months or so across different markets.
“That said I wouldn’t lose sight of the fact that we’re closer to the end than we are to the beginning and we’ve seen tremendous amounts of global monetary and fiscal support.
“Inflation is probably one of the biggest risks right now and one of the easiest ways to gain exposure or hedge is buying stocks that are most exposed to inflation… as well as to take advantage of being a little bit long commodities.”