ABN AMRO Private Banking stays positive on equities and keeps its "overweight" stance, encouraged by signs of a bottoming out of the global economic cycle and continued strong corporate balance sheets and dividend distributions.
"The convergence of improved economic conditions and investors fleeing low yields feeds our positive outlook for equities," Didier Duret, chief investment officer of ABN AMRO Private Banking, says in a note.
"Investors are facing the harsh reality that they cannot achieve decent real yields without venturing into assets exposed to economic risk. 'Safe haven' flows have massively compressed bond yields, forcing institutional and private investors to consider equities for their target returns."
The bank's preferred sectors are industrials, particularly capital goods, energy and healthcare, the bank says, adding that international companies with direct exposure to fast-growing emerging markets are also favoured.
"'Masters of Manufacturing' is the equity theme identified for the first quarter of 2013. It focuses on companies supporting or delivering production efficiencies and higher manufacturing standards via improved tools and IT."
The companies under the theme include ABB, BASF , Bureau Veritas, Intertek, BMW and Volkswagen.
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