Bull

Institutional brokers modestly bullish in Q4 2012, says TIM Group

Institutional stock brokers continued to be modestly bullish throughout the fourth quarter of 2012, continuing the trend from the end the third quarter which bodes well for the first quarter of 2013, according to a survey by TIM Group.

This is despite concerns over the US and European fiscal and economic situations and the US election which gyrated the market in 4Q12.

“It seems to be a clear case of stay calm and carry on,” says Colin Berthoud, TIM Group co-founder. “At this point, the general outlook is that brokers are sanguine if not slightly positive about the outcome of the ‘fiscal cliff’ in the US.”

According to the survey, 65 per cent of equity trading ideas that brokers sent to their institutional clients in 4Q12 were long. This was the highest quarterly average for the year.  A long percentage of 66 per cent or more is considered bullish as equity sales desks are recommending two longs for every one short trade.
 
The general trend during 4Q12 was a weekly range 62-67 per cent long, punctuated by a low of 61 per cent the second week of the quarter and highs of 70 per cent the seventh and eighth week.
 
This compares to the 3Q12, which averaged a more negative 59 per cent, though was highly volatile and showing signs of improvement as it went into 4Q12.
 
For 2012, brokers’ ideas averaged 62 per cent long versus 64 per cent in 2011.

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