The survey by Broadgate Consultants, Inc also showed that more than 70% of the sample expressed concern that the increase in employee stock options is diluting shareholder value.
In addition, 80% of the sample is troubled by overly optimistic assumptions used by corporations for returns related to their pension funds, which can often boost earnings expectations.
In terms of hot spots in the equity market,
· just over 90% of the sample expect small cap
stocks to rebound in 2002, and
· half of the respondents expect technology stocks to lead the market out of the doldrums
Increased takeover activity is also expected to contribute to market gains next year, according to the survey, with the following industries expected to see increased takeover activity:
· financial institutions, and
· health care
The survey also saw 40% of respondents predicting a strong initial public offering (IPO) market in the first half of 2002, and in the wake of the recent scandals, 51% want tougher IPO regulations.
Questioned on the possibility of a January effect on equity valuations in 2002,
· more than half believe the market would
experience this positive effect,
· about 18% of the respondents believe it’s a thing of the past,
· while 27% said there would be no January effect – but still think its a valid phenomenon
The sample comprised 89 fund managers.