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A GLOBAL survey has reinforced beliefs that fears of a credit squeeze and panic selling are making institutional investors more averse to risk.

Merrill Lynch's August survey of 181 fund managers presents a timely snapshot. "What is surprising is that there doesn't appear to be a major change in views on stocks," said David Bowers, a consultant to Merrill Lynch. "People still see better value in equities relative to bonds. It's not quite business as usual, but they have not thrown in the towel."

Mr Bowers added that he believed investors were simply waiting for the turmoil to clear before they took advantage of what they saw as a buying opportunity.

Bill Mott, a a former Credit Suisse UK equity chief who now runs the boutique asset manager Psigma, said market sentiment was close to the bottom, and share prices for banks, insurance companies and housebuilders were now "stunningly attractive".

He said: "We are convinced the best value is to be found in the severely traumatised areas where deep value is available - specifically banks and insurance companies."

The survey showed that fund managers saw the clouds over financial markets as separate from the health of the global economy. Merrill said the problem was still very much one for the US, and investors would only start to really worry when this got in the way of growth in the east.

"Investors are still comfortable about the macro-backdrop, particularly for emerging markets," Mr Bowers said. "They are not deterred by the turmoil and almost all view emerging market economies as a safe haven from the US."

The survey also showed that 7pc of fund managers thought a global recession was likely in the next 12 months, a lower proportion than in May. But the survey was conducted before the dramatic falls in the US and Britain.

Karen Olney, a equity strategist at Merrill Lynch, said compared with the Russian financial crisis in 1998 there was a lot more confusion now. "Banks are scared of lending to someone, because no one knows who holds the disaster this time round," she said.

This clampdown on credit could lead to a widespread knock-on effect.

Guardian News & Media