POLL-Funds see little post-war upside for dlr, equities -- "There are many problems around the world -- North Korea, Saudi Arabia, Pakistan, Cuba, Venezuela...," "Iraq is only the beginning, not the end."

www.forbes.com Reuters, 03.20.03, 11:59 AM ET By Reuters Polling Unit

LONDON, March 20 (Reuters) - Fund managers expect the Iraq war to be over in a month but see little upside for equities or the dollar after the conflict ends, according to a Reuters poll.

Thursday's survey of 11 strategists at fund management companies in Europe, North America and Singapore gave mid-range and average forecasts for the war to last four weeks.

But most saw only limited gains for the benchmark U.S. stocks index, the S&P 500. The mid-range forecast was 890 in three months time, barely changed from Wednesday's close of 874.

"Although the stock market has moved so much already, in the end I don't think this market will be up more than five to seven percent for the year, because after all of the hostilities are over, there is still the issue of a weak U.S. economy," said Anthony Chan at Banc One Investment Advisors in Columbus, Ohio.

Some saw the dollar recouping some of its losses against the euro during the conflict but the consensus was for the U.S. currency to weaken to $1.09 per euro in three months' time, close to its recent lows.

"For now the dollar is getting some sympathy," said Avery Shenfeld at CIBC World Markets in Toronto. "But in terms of the economy, when this war is over it will still be weak and the (U.S. Federal Reserve) will have to cut rates again."

The mid-range forecasts were for the dollar to strengthen to $1.05 in a week and a month's time from current levels around $1.06, before weakening again. However forecasts for three months' time ranged from $1.02 to $1.12.

ONLY THE BEGINNING

Most strategists expected only a modest sell-off in U.S. government bonds and some expected 10-year yields to fall again once the conflict ends.

The mid-range forecasts were for the 10-year yield to be little change at around 4.0 percent in one week and one month, edging up to 4.20 percent in three months.

With oil prices already down sharply from pre-war highs of around $34 per barrel for Brent crude, strategists saw fairly minor scope for further falls. The median forecast was for Brent crude to ease to around $25 per barrel in three months from current levels around $26.50.

Asked how long they were assuming the main Iraq conflict would last, five analysts said four weeks with other responses ranging from two to 12 weeks.

But most voiced caution about whether a swift U.S. military victory would resolve market worries about geopolitical tensions and the economy.

"The equity market is in the process of pricing in a quickly expedited war," said Nigel Richardson at AXA Investment Managers in London. "The biggest fear for the market is...that resistance goes on for longer than they anticipate."

Bahi Ghulrib at ABN Amro Asset Management in London said that besides Iraq, markets faced worries about fundamental weakness in major economies and a long list of global tensions.

"There are many problems around the world -- North Korea, Saudi Arabia, Pakistan, Cuba, Venezuela...," he said. "Iraq is only the beginning, not the end."

(Additional reporting by Pratima Desai and Joanne Russell in London, and Svea Herbst in Boston)