Buy DBS, Bank Stocks `Before the Sale Is Over,' Fortis Says

By Hanny Wan

July 31 (Bloomberg) -- Investors should take advantage of the bear market in financial stocks to buy shares of ``well- managed'' banks such as Singapore's DBS Group Holdings Ltd., Fortis Investments said.

The global credit crisis is ``half-way through,'' John Chisholm, Boston-based head of investment specialists in equities at Fortis, which oversees $7.5 billion of global assets, said in an interview. ``Buy now before the sale is over because inevitably markets will rebound as they always do.''

About $11.7 trillion in value has been erased from global stock markets this year on concern losses caused by mortgage defaults will slow economic growth while record-high oil costs erode earnings and stoke inflation.

A measure of financial stocks on the MSCI World Index has tumbled 32 percent from its October high, compared with a 17 percent drop in the broader measure. A bear market is typically characterized by a decline of 20 percent or more.

The financial shares index is valued at 12.6 times reported profit, less than the MSCI World's 15 times.

``It is a difficult environment but you have to take a long term view,'' Chisholm said. ``You really have to focus on companies that have sound fundamentals, good operating models, and you're getting them at a discount right now.''

DBS, Southeast Asia's biggest bank, has declined 6.9 percent this year. The company is due to report profit on Aug. 7.

To contact the reporter on this story: Hanny Wan in Hong Kong at hwan3@bloomberg.net.