Stocks Rally Last Month Was `Dead Cat Bounce,' Aberdeen Asset's Young Says

[marmar]

Stock Gain Is ‘Dead Cat Bounce,’ Aberdeen Asset Says (Update3)
By Chen Shiyin and Susan Li


April 8 (Bloomberg) -- The rally in global stocks over the past month is a “dead cat bounce,” as companies report “terrible” earnings this year and the global recession persists, Aberdeen Asset Management Plc said.

Investors should instead focus on companies with strong balance sheets and sustainable business models that can weather the “severe recession,” Hugh Young, who oversees about $37 billion as managing director of Aberdeen Asset’s Asian unit, said in a Bloomberg Television interview. He favors regional financial companies and holds stakes in Singapore’s Oversea- Chinese Banking Corp. and United Overseas Bank Ltd.

The MSCI World Index fell 0.7 percent to 826.66 as of 4:49 p.m. in Singapore, taking its losses this week to 3.3 percent. The decline ended a four-week, 23 percent rally that came amid optimism government efforts worldwide to revive the global economy will succeed. The gauge has lost 10 percent this year.

“It does feel very much like a dead cat bounce if you like, or a bear market rally,” Young said. “The fundamentals for the stocks we’re looking at are not improving and this year is going to be pretty bloody for earnings, if not into next year as well.”

Sharp Corp., Japan’s largest maker of liquid-crystal- display televisions, today reported a 130 billion yen ($1.3 billion) loss, its first since 1956. Alcoa Inc., the largest U.S. aluminum producer, yesterday posted a second-straight quarterly loss as the global recession reduced demand for the metal used in automobiles and appliances. ..........(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601213&sid=aR.m5To74E5k&refer=home

[Optical.Catalyst]

1. Or it is a 'Sucker Rally'

It could be a return to more realistic stock prices after the Bear Raids conducted on several of the financial houses.

The Bush Administration got rid of the uptick rule to allow his friends on Wall Street to rape the market selling short. Thank you Mr. Bush, even when the market is at the bottom conservative businessmen are still hard at work stealing money and getting rich.