Jabre eyes 'bombed out' stocks

By Laurence Fletcher

LONDON (Reuters) - Many stocks in heavily discounted sectors such as banks and industrials still look cheap, says hedge fund manager Philippe Jabre, although he has trimmed his large weighting in equities after the recent rally.

The former GLG (GLG.N: Quote, Profile, Research) manager, whose Geneva-based Jabre Capital Partners runs around $3 billion (1.8 billion pounds) in assets, said stocks whose share prices were battered last year can benefit from easier access to credit, less competition and improving margins.

"There's money to be made in sectors that were the weakest," he said in an interview on Wednesday.

"You have a lot of stocks that are cheap in this market, hit by deleveraging of investment funds.

"Industrials are very bombed out. Six months ago everyone as scared about bankruptcy. Ford (F.N: Quote, Profile, Research) was $2, now it's $6, but why should it stop at $6 if it's making money and competitors are bankrupt?"

Jabre was fined a record 750,000 pounds in 2006 by Britain's Financial Services Authority for market abuse after building a reputation as one of the City's top hedge fund managers. He later set up his own firm in Switzerland.

Jabre, who says the recovery is a "slowly improving environment" rather than a bull market, is positive on the effect of government stimulus packages and highlights stronger credit markets as a key reason for boosting equities.

"The credit world is better than at the end of December," he said. "Companies can borrow money cheaper ... This makes stocks more desirable.