CSAM sees short-term upside in European stocks

FRANKFURT (Reuters) - Credit Suisse Asset Management sees a 20 percent short-term rise ahead for European stocks, prompting a temporary "overweight" stance, but says investors should begin to selectively sell once such gains are made.

"We've set a level of around a 20 percent gain for the EuroSTOXX .STOXX -- perhaps a bit more for the DAX .GDAXI because it has disappointed a bit more lately," Stefan Keitel, global chief investment officer at CSAM, said at an event on Monday.

"We had said when we reach this level we would tell investors they should go to the sidelines."

Keitel said CSAM, a unit of Credit Suisse Group AG (CSGN.VX), had earlier determined that when the S&P 500 .SPX reached 1,000 points, stocks would be relatively fair valued and it would be time to selectively sell.

The S&5 500 was up 0.9 percent at 886.74 by 4 p.m. British time, having dropped around 3 percent so far this year.

"There are simply so many problems out there waiting for us, that we don't think we'll see rocket-like growth," Keitel said.

CSAM is "overweight" on equities in emerging markets, Canada, Britain and Switzerland, while it is "underweight" on those in Japan and eastern Europe. It has a "neutral" weighting on U.S. equities.

RATE RISE

"The U.S. will undoubtedly go through the global recession faster than some countries, but interest rate pressure is likely to weigh thereafter," Keitel said.