Bank Austria has increased the equity component of its model portfolio from 37% to 40%. Monika Rosen, head of research at the bank's asset management division, nevertheless warned of the possibility of a renewed sharp fall in global share prices. She said that equity markets may have recovered too rapidly from the aftermath of the terrorist attacks in the USA.
During the next six to nine months, Rosen advises investors to favour cyclical stocks, particularly automobile manufacturers such as General Motors and financial services concerns such as Citigroup and Merrill Lynch. By contrast, she believes that the good years for defensive stocks such as pharmaceuticals are now over.