'All Things in Place’ for Bull Market

April 30 (Bloomberg) -- Anthony Bolton, president of investments at Fidelity International, said a bull market in equities has already begun and financial shares are poised to drive recent gains higher.

Low valuations indicate advances that began in March are the start of a bull market, Bolton said. He favors financials, consumer cyclical, technology, and “value stocks,” such as retailers, automakers and construction-related shares.

“All the things are in place for the bear market to have ended,” Bolton said in an interview with Bloomberg ********** in Hong Kong. “When there’s a strong consensus, a very negative one, and cash positions are very high, as they are at the moment, I’d like to bet against that.”

The MSCI World Index has dropped 3.2 percent this year, extending last year’s 42 percent slump, the worst annual performance since at least 1970. Shares plunged as a collapse in U.S. consumer spending and a freeze in credit markets sent the U.S., Europe and Japan into their first simultaneous recessions since World War II.

The declines dragged the gauge’s price-to-book value, or the ratio of stock prices to company assets, to 1.5, down from 2.4 at the beginning of 2008.

Bolton, who is based in London, said that in September he started putting money into Fidelity’s China-focused fund, which invests in Hong Kong-listed H shares of Chinese mainland companies, and into Japanese stocks.

Not Bear Rally

Investments in money market funds in the U.S. have reached a record and could fuel a bull market during the next two to three years, he said.

Bolton’s view contradicts that of Nouriel Roubini, the New York University professor who predicted the financial crisis. Roubini said last week he was “still bearish” and that an economic recovery is going to take “longer than expected.”

“Nearly all the broker research I read says ‘bear-market rally,’ that’s one of the other things that makes me think it’s the beginning of a bull market, not a bear-market rally,” Bolton said. “When everyone is extremely negative, I want to bet against that. If you wait for things to get better, you’ll miss the rally.”

Fidelity International managed about $157 billion as of January, according to Hong Kong-based spokeswoman Megan Aitken.

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