Cornerstone Worldwide reportedly believe the Korea Development Bank should postpone acquiring stock in Lehman Bros according to a source close to banking analysts at the Asian-based investment manager.
“One only has to look at the prices of stock in Citi and Merrill to see the result of premature investment”, said the source alluding to sovereign wealth fund stakes acquired when shares in both firms were 40% higher than they are today.
Cornerstone Worldwide are thought to believe the time for investing in financials has yet to arrive given the moribund state of the US banking system.
“Freddie Mac and Fannie Mae are still not out of the woods and third quarter bank report season is not looking promising,” said the source.
Many analysts share Cornerstone ‘appraisal of the banking sector’s situation and eminent economists have largely warned against investment in the stocks of Wall Street’s most venerable names.
