Worst of banking crisis over, market lows near: ex-Fidelity manager

TOKYO, Nov. 21 Kyodo - The worst of the global banking crisis is over and financial markets in advanced countries may be nearing their lows, Anthony Bolton, one of Britain's most successful fund managers, said recently during a visit to Japan.

But Bolton, president for investment at Fidelity International, said recovery
for markets in emerging countries like China and India may take longer due to
the deeper-than-expected damage to the real economy from the U.S.-triggered
financial turmoil.
''The news always looks absolutely bleakest when markets are near their lows,''
Bolton told reporters in Tokyo.
In fact, the outlook for the global economy has not looked grimmer, with both
the eurozone economy and Japan entering a recession while the U.S. Federal
Reserve warns of further contraction in the U.S. economy next year.
''I think a lot of the behavior of markets recently suggest lows,'' he said,
adding the recent high volatility in stock markets ''is typical of a change in
environment.''
Bolton, who has managed the Fidelity Special Situations fund for 28 years,
since 1979, said the financial sector will be the first to recover from the
current financial crisis, which he termed as ''the worst'' in his long-running
career.
''The financials were the first into the crisis so I think they could be the
first out of the crisis,'' he said, adding commodities will take longer to
recover since they were the last to be hit by the crisis.
But on the prospects of stock markets in high-growth regions, Bolton said
people were generally ''too optimistic'' to presume that the impact of the U.S.
subprime mortgage crisis on Asian economies like China was light.
''My suspicion is that they (emerging economies) have been worse affected by
what's going on in the Western world than many people understand,'' he said.
Compared to a year ago, Shanghai's main stock index has plunged about 70
percent and India's benchmark Sensex fell over 50 percent as panic about a
global credit squeeze and a global recession gradually rippled into emerging
markets.
In a separate interview with Kyodo News, Bolton added major Chinese exporters
will be hard-hit by a slowdown in the U.S. market.
''It's true that China didn't have the subprime problem, but because...America
is a big market for Chinese goods, it's being sort of imported into China
through exports,'' he said.
Bolton, who put about 4 percent of his Fidelity fund into Chinese equities,
said he sold most of them at the end of 2007 due to concern about the
performance of the post-Olympics economy.
But he suggested buying opportunities may arise in emerging markets during the
April-June quarter of 2009 after market participants digest all the bad
economic news on the region that will be released early next year.
On the Japanese market, Bolton said it may be ''one of the better markets
performing'' in three or four years as investors take on the newly found
opportunities in share prices that have fallen even more sharply than in the
U.S. market, where the subprime meltdown originated.
While confidence in stock markets worldwide has nearly been wiped out by
despair over the outlook on the global economy, Bolton said that loss of
confidence often occurs at the best opportunity to actually enter the markets.
''Confidence is lost normally just at the wrong time,'' Bolton said. ''If I'm
right about the future and if markets recover, I think we're going to be in a
golden age for value (investors).''