Dollar's Rally on Euro Jitters Could Be Short-Lived: Pros

Published: Monday, 29 Nov 2010 4:41 PM ET

Fears over Europe's latest debt crisis may have triggered a higher dollar and a pullback in the stock market, but market pros don't see any long-term strength in the dollar or major threat to US stocks.

With the Federal Reserve flooding the market with money and the International Monetary Fund at the ready with a nearly $1 trillion bailout package, many remain convinced that the trend for the US currency remains lower.

The weaker greenback has been considered pivotal in the Fed's strategy to kickstart the slumbering US economy by cheapening assets and lowering interest rates, thus triggering risk-taking.

"In the short run, who knows? Over the intermediate term, greed is going to take investors away from this crisis because I don't think it's a game-changer," said James Paulsen, chief investment strategist at Wells Capital Management in Minneapolis. "This is more about market reaction than it is fundamentals in Europe."

Stocks lately seem to be in throwback mode and could stay that way through at least the end of this year.

The US market has declined more than 3.5 percent since fears have grown over European debt, primarily in Ireland—for now—but likely reverberating onto other euro zone economies including perhaps Spain. Stocks lost more than 1 percent Monday but rebounded later in the afternoon.

Simultaneously, the euro has tumbled from its recent high of 1.414 against the dollar to near 1.31 on Monday, a fall of about 7 percent in less than four weeks. The move resembles a similar pattern to April, when fears over Greek debt defaults triggered a soft patch for the market that lasted through most of the summer.

While many market pros remain fairly sanguine about US stocks, there remains fear that the euro has a ways to fall yet.

Hedge fund manager Dennis Gartman, author of The Gartman Letter investment guide, wrote that the euro is "in the process of breaking down" and likely will slide to 1.265-1.275 in the near term.

"These are tectonic plates shifting very, very slowly but doing so inexorably," he wrote. He echoed those comments in an interview on CNBC. (Click here for more)

So if the dollar does continue to weaken, that could present some headwinds for stocks.

At the same time, conventional wisdom would be that commodities would suffer, too. Yet Monday trading actually saw price increases for items such as gold, oil and silver. Dollar-denominated assets generally do well when the greenback is falling in value as that makes them cheaper to purchase with foreign currencies.

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The activity could be a sign that some commodities could be losing their sensitivity to dollar movements and trading more strongly on underlying fundamentals.

"We are convinced, as we have been for months," Gartman wrote, "that the driving force behind gold's strength is not inflation nor dollar devaluation but the simple notion that gold has become the world's 3rd most popular 'reservable currency' and that it will soon move past that of the EUR into 2nd place."

But even if the European situation continues to roil markets, gold remains a solid safety investment, said Philip Silverman, managing partner at commodity trading advisor Kingsview Management in New York.

"A flight to safety would be having exposure to gold," Silverman said. "Now, commodities can get soft here based upon the strengthening of the dollar and economic activity. But we're finding that gold can be viewed a commodity and inflation hedge as well as a currency substitute."

Oil prices also are continuing to head higher, which Gartman sees as reflective of global uncertainty in the energy markets—most recently the damage done to relations with Mideast nations following another round of Wikileaks disclosures.

Conversely, Paulsen sees stock prices continuing to rise despite global turmoil such as the European debt situation. He said credit spreads and interest rates are well off the highs experienced in April, indicating that investors are not as nervous as they were when the crisis first broke.

"We're finishing up the second year of what is likely to be double-digit gains in the stock market and up 80 percent from the March 2009 lows," he said. "Yet the whole time it has been going up we've been worrying about one crisis after another. Has it done investors any good to focus on any of these crises, or has it been better to focus on underlying stability?"

Yet much of those gains have been underwritten by loose monetary policy that at some point will have to end to stave off the accompanying inflation from all that money printing.

Weak-dollar policies tend to prevail during economic downturns as a way to ignite an economy by cheapening its goods in world markets. But it is an ultimately unsustainable policy due to the threat of inflation and global trade wars.

So at some point, whether it comes from a flight from the euro or fundamental economic strength, the market will have to show it can justify a stronger dollar.

"The government gifts of stimulus are driving the stock market. There's been an impression that if the economy stays weak the government will keep throwing money in," said Keith Springer, president of Springer Financial Advisors in Sacramento, Calif. "In the long term a strong stock market has to rely on the strong economy—getting people back to work, which means a stronger dollar. Eventually that's what's going to happen."

(Source: CNBC.com)

KLCI may fall into longer correction after forming Top Reversal Pattern - 29/11/10

Chart: KLCI daily chart1 (Source: tradeSignum)

Refer to KLCI daily chart shown above, the KLCI hit the new high of 1530 and retreated to the low of 1474 level on 29th Nov 2010. Further to this, the KLCI is forming a Top at 1530 and reverse into short term downtrend pattern. It has tried several rebound but has yet broke the previous high, subsequent to the failures, the KLCI may continue the correction until a stronger support is builded.

Resistance levels
1500, 1505, 1530

Supports level
1480, 1465, 1456

Near term outlook
Bearish - Short term downtrend, heading towards 1480 level.

Long term outlook
Bullish - Long term uptrend, as long as the index stay above the main uptrend support line.

Trading opportunity
Cautiously pick up some good fundamental stocks during profit taking.

Favourite stocks recommendations
Finance - Maybank, CIMB, RHBCAP, PBB.
Consumer - CI Holdings, TWS. (TWS has broken the main resistance, outlook strong buy)
Construction - Sunway, Gamuda.
Healthcare - KPJ, Faber.
Plantation - BStead, TDM, MHC, Cepat.
Trading/services - Kfima.
Gaming - Genting.
Telecommunication: Axiata.

不拼輸贏 享受情趣; 胡立陽 抱著玩尋寶心情買股票

投資股市應該像巴西人跳桑巴舞一樣，帶著愉快的心情，但卻很有規律的。

要不然，就把股票投資當是一種尋寶遊戲，不拼輸贏，自然而然你就會覺得股市是一個遊樂場，並不是所謂的“會吃人”的市場或賭場。

被譽為台灣“股市教父”的胡立陽說：“只要別把賺錢當為投資股市的第一目的，你才能真正享受投資股市過程中所帶來的快樂。”可能你會問：不為錢那投資股市做啥？

他笑說：“投資股市就應該只為增加生活情趣，如果賠錢很傷心，賺錢更痛苦的人，根本不適合買股票。”

胡立陽：不把賺錢作為投資股市的第一目的，才能真正享受投資的快樂。在胡立陽眼中，大馬就像10至20年前的台灣，大部分投資者都對投資存有不正確觀念，但只要將正確觀念嵌入每個投資者心里，再配合推廣投資教育，大馬股市自然就會蓬勃發展，也慢慢會活潑起來。

“別將投資股票當作一門職業來經營，應當作是尋寶遊戲一樣，如果只為了賺錢，抱著股票就像抱著憂愁，每日提心吊膽，那就一點都不快樂。”

他說，20多年前被邀回流台灣時，當時台灣並不流行投資股票，投資氛圍也較為嚴肅，股市規模也非常小，大家都當股市是“會吃人”的市場，就有少碰為妙的心態。

當時，他透過幽默風趣的演講及教育，將投資股市愉快的氣氛感染大家，並糾正投資觀念。
短短3年時間，他帶動投資股市的風氣。

到過世界各地演講，幾乎舉凡有華人的地方都遍佈他的足跡，胡立陽發現，人性沒有改變，不一樣的只是活潑及嚴肅的分別。

開始關心時事行情

他說：“只要放寬心，只要把賺錢放在其位，旨在享受投資過程帶來的樂趣，輕鬆看待股票投資，股市變得活潑了，參與的人自然就活絡起來，屆時大家自然都能從中賺到錢。”

“你會發現買了股票，生活將不再那么乏味，你會開始看很多書、報章雜誌、開始關心油價、金價、利率，生活變得多彩多姿起來。”

研究說，巴西股市是全球最送錢的股市，那是因為當地投資者就像跳桑巴舞一樣，很有韻律，買了股票就像買了一個無窮的希望，不但覺得好玩又賺錢。

“第二送錢股市就是新加坡股市，那里的投資者都很規矩很守法，該買時買該賣時賣，股市的圖形呈獻很有規則，就像典型的教科書，可以說所有華爾街理論都可運用于新加坡股市。”

“只要跟著規則走，就很容易賺到錢，所以大家要珍惜這樣的股市；大馬股市投資者參與度只要再提高些，再活潑輕快些，自然會像新加坡、巴西或華爾街股市一樣，更活絡更繁榮。

1. 馴服熱錢 變長期留駐資金

幽默風趣的胡立陽，曾創下連續3年平均每年超過1000場的演講記錄。“成也熱錢，敗也熱錢！”這只在一線之間，胡立陽說熱錢並不可怕，反之是千載難逢的機會，一旦成功馴服熱錢這壞孩子，熱錢就有可能變成長期留駐的資金，在國家建設上助上一臂之力。

美國近期實施的貨幣量化寬鬆政策（QE2）瘋狂印鈔，導致亞洲各國人心惶惶，深怕大量熱錢聚焦亞洲會引發泡沫，進而爆發另一輪金融危機。

國際貨幣基金組織總裁史特勞斯卡恩更建議，應在必要時實行資本管制，以阻止另一輪金融危機降臨。

胡立陽認為，各國政府無需恐慌，只要夠膽識及懂得善用，就可將頑皮的孩子變成乖寶寶，海水也可變淡水，真正把投機資金變成投資資金。

他建議說，我們可以設立一個基金或債券，或是混合型的各式建設基金，然后由政府背后支撐，或跟銀行合作給個較市面定存年利率高上2%至3%的適度保證回酬，吸引這些資金一起搞建設。
因為很多政府都有龐大外匯存底，以這做背后支撐，政府只要冒個非常低風險，給這些資金信心，給予高出一般市面上的年回酬，這些資金自然就留下來了。

“畢竟全世界都需要基礎建設，如果資金是來炒作，我們不要，如果是來參與建設，何樂而不為？也能順勢帶動經濟成長。

“我們越想鎖住或禁止熱錢進出，又無某程度上的保證，沒有信心，這些資金當然夾帶逃，真正變成到處竄逃的熱錢，屆時當然世界大亂。

“越是規矩多多綁手綁腳，它就會越掙扎，更加來得快去得快；適度給它糖吃，它自然就會變乖，心甘情願留下來，屆時赶它走它也不走了。”

2. 利率太低 房市難跌

目前全球股市已進入牛市下半場，如果經濟基本面沒跟上股市步伐，就要謹慎了！據胡立陽觀察全球資金流動狀況時，發現自去年開始，投資在全球房地產市場（簡稱房市）的熱錢或資金已開始回巢，回流美國等債券市場及銀行定存，意味未來5至10年，房市價格會開始趨穩。

漲潮需要時間，他說，退潮也不是一下子，房市長期會走緩，至少未來5至10年會慢慢調整及趨穩，退到正常的債券市場及銀行等，這就是為何早前債券市場會出現大熱情況。

很多人預測房市會大跌10%至15%，他說這不容易發生，因為房市出現大幅度回檔不在現在，目前利率太低，資金沒有去處只好留在房市，資金不動房市也就沒有跌的選擇。

“短期來看，未來2年房市不會大跌，同樣地，未來幾年房市價格也不會飆漲，所以別再嚮往房地產市場。”

胡立陽提醒，一旦定存年利率超過3.5%，情況就不同了。假設錢放在銀行里3年，複利息就可取得高達12%時，房市價格就會開始出現大幅度回檔。

屆時把錢放在定存好比房市情況出現時，他們就會賣房子，房市才會出現最少10%至15%的大幅度調整。

針對大馬房市是否存在泡沫，他糾正說，根本沒有什么泡沫化，那是資金太多的緣故。

“很多人根本不懂什么是泡沫，較以前漲多些就說是泡沫化，漲跟不漲只是資金的流動及需求造成。當資金太多又沒有去處，只好買房子，最怕就是資金有選擇，那才會出現泡沫。”

3. 牛市 上半場無基之彈

要謹記，牛市上半場是“無基之彈”，但下半場卻“有基可循”！

意即牛市上半場都是技術性反彈，無需經濟基本面配合，但股市與經濟一如股市與房市都是孿生兄弟，在下半場時，前者必須與后者步伐一致，有基本面可依循。

胡立陽說：“目前全球股市已進入牛市下半場，我們該祈望說股市別漲那么快，因為全球經濟基本面還沒跟上來，一旦股市走得太快，彈得越高摔得就會更重。”

“股市都如桑巴舞有它的節奏，一旦往上漲10%至15%，就會需要休息，我們就需謹慎；反之跌幅超過10%至15%，就存在買進訊號。”

他說，這理論在個股市中也可供參考，惟有時則需注意突發情況，就不能只單憑一招。

胡立陽指出，依據過往研究，股市回酬並不比房地產投資、債券等其他的投資工具來得高，但投資股市卻最好玩，更千變萬化。

投資股市比房市投資門檻較低，是全民可以參與的活動，反觀房市是有錢人的投資遊戲。

有人說，地球上的土地買少見少，所以房市是穩賺不賠的投資。他說如果買房超過20年以上，這詮釋沒錯，但5年10年短期就賣的話，那就不恰當，因為房市短期很波動。

4. 娛人娛己 錢自然到口袋里

自20年前返回台灣后，選擇當老師的胡立陽就不再買股票，大家都稱他“不炒股的股神”。

曾有人想將胡立陽高潮迭起及極具傳奇的人生拍成電影，很多集團及所有證券行都來請他當董事長及總裁，但都被胡立陽婉拒。

他說：“辛苦了一輩子，我犧牲了一切回來，就真的只想當個小老百姓，單純想當個教育家推廣投資教育為大家服務，將所學所懂的傳授給大家，不想被誤解成是回來演電影或趁勢賺錢什么的。”

大家問他會后悔嗎？放棄潛在賺大錢的機會，只當老師及講師，他說：“不會！台下的掌聲讓我很富足，我得到了我想要的。”

他曾因壓力太大得過兩次胃潰瘍，因為演講講太多，喉嚨開過兩次刀。

“我是很有創造力及想像力的人，我喜歡電影，希望下輩子可以當個演員，演好看的電影給大家看。”

他也奉勸大家，賺錢不是人生所有寄託，一切應以心出發，喜歡發明汽車飛機的，就朝理想抱負去做也造福人群，娛人娛己，自然而然錢就會到你的口袋里。

小檔案：華爾街華人傳奇

在台灣大學畢業的胡立陽，取得美國留學資格，從原本的工程系轉換至商學系。

畢業后，為了找到符合自己專長的工作，他在3個月內便應征了300家公司，26歲進入美國證券界時，33歲時已是美國最大證券公司美林證券（Merrill Lynch）有史以來第一位華籍副總裁兼硅谷分公司總經理，是華人在華爾街的最高職位。

從口袋只剩27美元，到成為華爾街華人傳奇，他被譽為華爾街神童。

1986年，應台灣總統府資政李國鼎邀約，毅然放棄華爾街的一切，回台擔任證券市場發展基金會秘書長，任期內因推動股票投資及教育投資大眾，成功掀起空前的投資熱潮。因此被媒體尊稱為“亞洲股市教父”。

他也在台灣大學擔任教授，並首創“股票投資學”課程，幽默風趣的他，曾創下連續3年平均每年超過1000場的演講紀錄。

(Source: chinapress)

KLCI to test crucial support - 26112010

KLCI Daily Commentary

Refer to KLCI daily chart, the KLCI hit the new high of 1530 and retreated to 1488 level which is about 5% retreatment. The index fall into a short term down trend after falling below the middle line of the Bollinger bands, and formed a lower high pattern. The profit taking was partly due to the uncertainties happening globally such as the War threat between North Korea and South Korea, and the EU countries bailout issues in PIIGS.

Resistance levels

1500, 1505, 1530

Supports level

1480, 1465

Near term outlook
Bearish - Short term downtrend, heading towards 1480 level.

Long term outlook

Bullish - Long term uptrend, as long as the index stay above the main uptrend support line.

Trading opportunity

Cautiously pick up some good fundamental stocks during profit taking.

Favourite stocks recommendations

• Finance - Maybank, CIMB, RHBCAP, PBB.
• Consumer - CI Holdings, TWS.
• Construction - Sunway, Gamuda.
• Healthcare - KPJ, Faber.
• Plantation - BStead, TDM, MHC, Cepat.
• Trading/services - Kfima.
• Gaming - Genting.
• Telecommunication: Axiata.

Malaysia FBMKLCI long term bullish view - 24112010

KLCI Daily Commentary

Refer to KLCI daily chart, the KLCI has started the uptrend since March 2009 from the low of 800 points level. A long term uptrend support line is formed by joining the 2 low points shown. Thus, it is clearly indicated there will be a very strong support level at 1405.

Summary

As long as the KLCI stay above the long term uptrend line, I am still bullish on the market, and there should be a bargain hunting opportunity during market weakness.

Gold Steady on Renewed Worries Over Ireland

Published: Monday, 22 Nov 2010 11:15 PM ET
By: Reuters

Gold prices were steady on Tuesday, supported by safe-haven demand spurred by renewed worries over Ireland's political stability, and liquidity is set to thin as the U.S. Thanksgiving holiday approaches.

The uncertainty in Ireland's politics unnerved investors, pressuring the euro and helping the dollar to stand firm.

Ireland begins two nervous weeks of political maneuvering on Tuesday as the government dares the opposition to block an austerity budget on which a multi-billion euro EU/IMF bailout is riding.

"The precious metals have good support, as the situation in Europe is still unstable despite the rescue package," said a trader based in Hong Kong. "It has attracted funds in safe-haven buying."

The trader also noted that trading was thin because of a public holiday in Japan.

"Liquidity is going to dry out later this week due to the Thanksgiving holiday in the U.S. But the thin liquidity might exaggerate price moves."

Spot gold is expected to rally towards $1,380 per ounce as it completed a consolidation between $1,342 and $1,363, and is poised to rise further.

Physical selling around the $1,365 level was spotted in early Asian trade, but overall trade through the physical market was scarce, a Singapore-based dealer said.

"Gold is likely to be rangebound in the near future, with $1,340 being a good support level. The outlook is still firm, as the European debt situation is not very optimistic," said the dealer.

Just before the United States approaches the Thanksgiving holiday later in the week, investors are watching for a batch of data from the U.S. on Tuesday, including preliminary economic growth data for the third quarter.

Also on the radar are the minutes from the Federal Reserve's meeting on Nov 2-3, where the Fed decided to launch its $600 billion bond purchase programme.

"Gold should be able to gradually rise again, after the correction down to the $1,330-level. But a strong rally will be unlikely in the rest of the year, unless Ireland's problem spills over to seriously impact the entire euro zone," said Hou Xinqiang, an analyst at Jinrui Futures.

Speculation on China's tightening moves has come to a pause for now, after Beijing raised banks' reserve requirement last Friday — a move tamer than an interest rate hike that many market players had expected, Hou added.

(Source: CNBC: By Reuters)

The "secret" behind the financial stock index

Understanding about Stock Index

When we talk about financial market, the most common topics among discussion would be What is the stock index today? Has the stock index broken new record high? What cause the stock index move up or down? and most of the people may express the frustration that although the stock index hit record high, but they did not feel the benefit at all. In order to answer those questions, it would be important to dwell deeper for a better understanding about stock index.

Definition of Stock Index

A group of stocks put together in a standardized way to provide a useful window into a sector or market's performance at a glance. That is, a stock index groups together a certain list of stocks and usually takes an average of their prices so as to provide an idea of how the industry or market represented in the stock index is doing. Very often, stock indices are weighted to prevent a few data points from overwhelming it. For example, the S&P 500 is weighted according to market capitalization, while the DJIA is weighted for price.
(Source: Farlex Financial Dictionary. © 2009 Farlex, Inc. All Rights Reserved)

Interpretation of Stock Index movement

For me, ideally, the stock index is a very important guideline as it shows the condition of the economy and it is formed with the purpose as an economy indicator. Tehnically, stock index should move about 3-6months ahead aligned with the economy direction. However, you may detect a lot of misleading indicators especially when the stock index move against the economy direction. This creates the confusion and misinterpretation to the investors, subsequently misleading the investors with the wrong investment desicion.

Manipulation of Stock Index

As you know, stock index consists of a group of blue chips counters / components such as DJ index (30 components), Malaysia stock index (30 components), Germany Dax (30 components), etc... These components are definitely good strong fundamental organizations which have been selected to represent a country's economy condition. However, there are many occasions you may notice easily that the index may keep continue moving higher and higher in a long run when the component stocks grow bigger and bigger. Practically, the index component stocks valuation needed to be examed from time to time, the loser may be kicked out from the index components (Ex: Citigroup), the next winner will be selected to replace the seat. Thus, this will definitely stabilise the stock index and subsequently solidify investors confidence. For me, this may be one of the effective way of maniputaing the stock index legally. So, the question for you is: How much do you willing to trust the stock index / the government?

Good investment return in stock index counters

Generally, in a longer run and for the convenience purpose, it should be safe to select index stocks as long term investment choice as it bring the high Return of Investment (ROI) in a attractive compounding rate. Most of the index stocks provide good return, high dividends, and stability to the investors. This may partly due to they are about "Too big to fail"! No matter what, the government will try to save and support the index counters. Thus, for the newbies and some professional investors, stock index counters are definitely one of the good choice for them.

Thailand in technical recession as Asia growth slows

Technically in recession after two straight quarters of economic contraction

BANGKOK: Thailand's economy slipped into a technical recession in the third quarter on Monday, Nov 22, reinforcing signs of an Asia-wide slowdown as export growth cools, manufacturing ebbs and the impact of massive government stimulus spending fades.

Southeast Asia's second-biggest economy shrank 0.2 percent in the third quarter after a revised 0.6 percent contraction in the second, data showed on Monday, reducing chances of another interest rate rise next month.

The data reinforce signs of a slowdown across much of the region, from North Asian export powerhouses China, South Korea and Taiwan to Southeast Asian "tigers" Thailand, Singapore and Indonesia. Strong growth in Asia has been one of the few bright spots for the struggling global economy.

Figures last week showed Taiwan's economic growth slowing in the third quarter, while Singapore's trade-reliant economy shrank 18.7 percent and Indonesia reported this month its first slowdown in annual growth in five quarters.

From a year earlier, Thailand grew 6.7 percent in the quarter, largely in line with economists' forecasts and slowing from growth of 9.2 percent in the second quarter, the data from the state planning agency showed.

"Looking forward, we expect weaker global demand to bring Thailand's economic growth to below trend in the fourth quarter of 2010, and in the first half of 2011," said Usara Wilaipich, a Bangkok-based economist at Standard Chartered Bank.

Malaysia's economic growth slowed more than expected to 5.3 percent in the third quarter from 8.9 percent in the second, its central bank said on Monday, noting growth in the second half of the year and in early next year was moderating." [ID:nKLA002364]

OCBC economist Gundy Cahyadi said growth almost stalled in the third quarter from the previous three months, though few analysts give quarter-on-quarter figures.

The Asian slowdown has been exacerbated by the U.S. dollar's slide, which has driven up regional currencies and started to erode export revenue. It is complicating efforts by Asia's central banks to return interest rates to normal levels after drastic cuts in the wake of the 2008 global financial crisis.

The Bank of Thailand is likely to keep its trend-setting one-day repurchase rate unchanged at 1.75 percent at its next policy-setting meeting on Dec. 1, said Arkhom Termpittayapaisith, secretary-general of the National Economic and Social Development Board, Thailand's state economic planning agency.

Private economists echoed that view after the data, which was marginally better than a deeper 0.4 percent contraction expected by most economists in a Reuters survey.

"We expect less aggressive monetary policy by the Bank of Thailand and possible delays on interest rate hikes next year," said Isara Ordeedolchest, an economist at KT Zeamico Securities, a stock brokerage in Bangkok.

Pimonwan Mahujchariyawong, economist at Kasikorn Research Centre, expects the economy to contract again in the fourth quarter, hurt by a nearly 12 percent rise in the baht this year against the dollar to a 13-year high and floods that have killed more than 200 people since October.

RATES SEEN ON HOLD

Thailand's debt market has largely priced in a rate pause next month, with one-year swap rates down by 22 basis points in the past two weeks. Government bond yields were barely changed after Monday's economic data.

Indonesia's central bank is also seen pausing to keep its policy rate on hold at a record low 6.5 percent well into 2011 as it tries to avoid encouraging an even bigger flow of investment capital to its markets.

Despite the slowdown, Thailand's state planning agency raised its forecast for economic growth this year to 7.9 percent from 7.0-7.5 percent projected in August, and tipped growth of between 3.5 percent and 4.5 percent in 2011.

Agency chief Arkhom said the quarterly contraction was due to lower state spending and a slowdown in private investment.

"It's cyclical that Q3 is usually weaker than other quarters," he told reporters, adding that the flooding across much of Thailand over October and November shaved economic growth by 0.3 percentage points.

He said the fourth-quarter performance depended on strength in exports which his agency expected to rise 25.1 percent this year before slowing to about half that rate of growth next year.

The data puts Thailand technically in recession after two straight quarters of economic contraction.

Earlier data had indicated the economy grew 0.2 percent in the second quarter from the first, but that was revised down to show it had contracted, due largely to political unrest over April and May in which more than 90 people were killed.

(Source: Reuters)

China Set to Continue Raising Rates: Experts

Published: Monday, 22 Nov 2010 2:55 AM ET

By: CNBC.com With Reuters

China is expected to to continue its tightening stance in the next few months as it aims to tame rising price pressures in the country, various analysts told CNBC on Monday.

Beijing will likely hike interest rates by 50 basis points and banks' reserve requirement ratio (RRR) by 75 basis points before the Lunar New Year in February 2011, Luca Silipo, chief economist at Natixis told the network.

On Friday, China's central bank raised the RRR by half a point to a record high of 18.5 percent — a move that weighed on the Hang Seng and Shanghai Composite on Monday.

"We can understand the worries of residents about the relatively quick rise in food prices and other daily necessities," according to a statement released Monday by the National Development and Reform Commission, China's economic planning agency. "But we also have the confidence to say that our country has the capacity and conditions to keep overall prices at a stable level."

The statement was released as the Chinese government gave more details on its measures to contain inflation, including scrapping road tolls for vehicles carrying fresh produce.

"It's actually a smart move. A lot of people in China are still too unbearably poor...It's smart to put a short-term price cap on food so these people can eat," said Shaun Rein, MD of China Market Research Group, adding that the measures are temporary and will likely last one to two months.

Food is currently the primary concern of policymakers, as the price of food has risen 10.1 percent in the year to October.

Strengthening the Yuan

China should consider widening the yuan's trading band and quicken the pace of currency reform to help tame imported inflation, Li Daokui, a central bank adviser said in published remarks on Monday.

However, an analyst highlighted that the U.S. Federal Reserve's quantitative easing plan would work against a stronger yuan.

"Bernanke is enabling America's addiction to debt and is also making it difficult for the Chinese to appreciate the renminbi. They're going to continue to appreciate, but I think it's not going to be as fast now because of Bernanke," Rein said.

(Source: CNBC: Reuters contributed to this report)

Weekly market commentary - 19112010

Summary of things happened last week

• US DJ index corrected from the high and rebounded to stay above 11,100 level.
• China Shanghai index plunged about 10% in a week.
• Europe and Asian markets affected, corrected and rebounded.
• Commodities hit 2yrs high and corrected, Crude oil plunged from USD88/barrel to USD81/barrel. Others like energy, metal and agricultures futures fall into correction.

Negative news

• China CPI shot up to 4.4%, causing china government further implementation to control overheating economy like increased the interest rate and raised 50 basis point reserve rate. China is reacting more aggressively to slowing down the economy to avoid bubble burst.
• Europe sovereign debt worry happening on Irish, Greece and Portugal became more serious, impact the confidence.
• Expensive commodities price may bring higher CPI to impact the economy recovery strength.

Positive news

• With effective economy control and rules implementation in China, it may be short term pain, but will definitely benefit the long term economy growth.
• Ease of worry on Europe sovereign dedt worry as good progressive action taken by Irish, as well as the support from EU members/fund.
• Commodities prices corrected to a more acceptable levels align with current economy situation.
• Although the commodities plunged corrected from 5%-10%, it only bring small impact to the global markets - minor/healthy correction.

Recommendation/things may happen in coming weeks

• Market may continue moving sideway to minor correction due to the uncertainties happen globally.
• Japan market looks positive as it may attract the inflow of hot money from the Asian region.
• Current market correction may end before mid December when most of the commodities price look attractive and cheap again, keep an eye on the commodities price. For instance, if crude oil drop towards USD70-75 level, which is benefiting the economy recovery path, the market may rebound and continue the uptrend again.
• Most of the countries are and must do the hard work to grow the economy in order not to fall into double dip recession, more solutions may announce in coming weeks or months.

Hedging - The flexibility to enhance investment returns and protect your investment portfolio

Unpredictable situation in financial market

As far as the market is concerned, sometimes it's just very unpredictable due to a lot of others unforceen circumstances. The market may change direction suddenly to react according to global news such as raise in interest rate, higher inflation data reported, higher unemployment rate, and others important ecconomy data. Some of the main influencers like weather may directly affect the commodities production like production disruption due to bad weather, new financial control implementation by the governments like tightening the borrowing to control hot money bubble, and the organizations' news like financial reporting and merger & acquisition news.

Options available in financial market investment

In general, the most common investment options are stock market, derivatives and forex. These are where the more experience financial traders preferred. Ideally, different investment tools have its individual characteristic that cater for different investment needs. All types of investment carry risk and return. These are some common professional preferences:

• Stock market - Invest in shares
• Derivatives - Investment in resources/commodities like crude oil, copper, crude palm oil.
• Forex - Invest in currency trading

SWOT analysis dictate the right investment product

In order to determine right investment option to individual, you have to understand yourself detail enough about the main objective of the investment, as well as the risk factor you can accommodate. It is easy, you are recommended to perform a SWOT analysis about yourself to derive your Strength, Weakness, Opportunity and Threats. From there, you choose the perfect investment option which suit you the most, and further explore and focus into that area. I strongly believe it will definitely benefit you and bring you the best rewards.

Hedging - Flexibility to enhance investment returns and achieve protection against investment portfolio

It is best to always remind yourself that what is the main purpose of your investment? and why limit yourself to the particular investment tool? Since there are so many options in financial investment, you are recommended to open up for more flexibility in order to enhance the investment returns and achieve protection against your investment portfolio at the same time. Thus, it is always good to explore and understand all the products available and to know individual characteristics better. Hedging - Is one of the best solution to protect your investment returns. For instance, you can choose to Short or Long the Derivatives and Forex currency pair when there is a sudden change of market direction which is unpredictable.

24hrs trades to avoid market crash on the next open trading day

Most of the time, there are many things happen globally like bad news announce in Europe and US which causing the market collapse, it directly bring the negative impact to the next open trading day in Asian markets. When Asian markets open, most of it directly gap down and it may be too late to react accordingly. For instance, there are options available to Short the commodities like crude oil, soyoil if the commodities are collapse. At the same time, you may Long the forex currency pair USD if the economy news are good during US market trading time since Forex is 24hrs open shop! This may make you gain the profit at night to cover some of the losses in shares market when the shares open gapping down the next day. Thus, the more you understand about the financial market, the safer and excited you feel. That's the reason people always say open up for more flexibility!

美國印鈔機開OT熱錢流竄,榮景隨時變泡影

美國印鈔機開OT熱錢流竄 榮景隨時變泡影

單聽“量化寬鬆貨幣政策”（Quantitative Easing Monetary Policy，QE2），這麼技術的名詞，沒有多少人會興趣研究下去；但如何告訴你，它的意思其實就是指政府“無中生有的印鈔票”，是否會引起你的好奇心？

量化寬鬆貨幣政策是近期國內外，尤其新興國家的熱門課題之一。

美國聯邦儲備局在11月3日，宣佈第二輪的量化寬鬆政策（簡稱QE2），讓全球尤其新興國家嘩然。

印鈔票，有什麼大不了？為何不能隨意增印鈔票？美國此舉，對亞洲新興國家如大馬，又有什麼影響？

馬股在11月10日寫下閉市新高，牛氣十足。沒錢的市井小民被人追款時最愛說的其中一句話是：你以為我印鈔票的嗎？

是的，在一般人的印象中，沒錢就去印鈔票，有了花花綠綠的鈔票后就等于“有錢了”！

可是，對一個國家而言，鈔票不能隨便印，一個國家大量且憑空印鈔票的后果，將導致本國貨幣貶值。

若增印的鈔票是美元，這個影響可就大了…

多了的美元成為四處流竄的熱錢，例如大馬股市、房市、匯市因而“榮景”再現，由于這只是短期炒作資金，一旦大幅撤離，榮景隨時變泡影！

美元作為全球認可且流通的國際貨幣，美國擁有印鈔票的后台，但正因為美元現有地位和影響力，也是QE2推出后，引起各國恐慌的原因。

經濟學家白文春告訴《中國報》，以前以黃金為本位貨幣時，各國所印的鈔票數量是以黃金為標準，意即有多少黃金，才能印多少鈔票。

印越多 貶越快

他指出，自從美元取代黃金成為國際本位貨幣，成為國際流通的標準貨幣和儲備單位，加上擁有龐大的消費市場作后盾，美國自是有能力“印鈔票”。

“美國是規模龐大的消費國，對外採購仍使用美元支付，商家不會不買賬。”

全球約63%的外匯儲備是美元，或以美元計價。

白文春指出，這只是有數據證實的比重，基于世界銀行未能歸類一些資產的匯價，因此若包括這些未歸類資產，全球美元儲備比重可能達70%。

綜合這些因素，美國聯儲局不畏懼的推出QE2，美元也未因增印鈔票而大幅度暴跌。

所謂暴跌，是指在2至3天內，貨幣匯率重挫20%至30%。

換作是大馬，就不能如此大開印鈔機了。

因為令吉非國際通用貨幣，既不在國際流通，也沒有國家會收、會以令吉為儲備金。

“在這情況下，國行若印越多鈔票，令吉貶值只會更快。”

熱錢興風作浪 虎視眈眈短期公債

鈔票不斷增加，市場上的錢如此多，該怎么花、怎么用？小市民若有余錢，一般會放到高回酬的

投資或儲蓄產品上。

大規模、有組織的投資機構或基金也不例外。

包括大馬在內的新興國家，經濟前景看俏、利率相對高，更是投資者垂涎的眼中肥羊，尤其是投機客。

因此，美國增印鈔票，也就是增加銀行體系的流動性（liquidity）后，這些熱錢瞄準的市場，離不開新興國家。

白文春指出，源自美國的游資氾濫，勢將流向區域國家。

“但這些游資，大部分偏好投資在政府短期債券，因為容易投資且可以很快脫手。”

換言之，熱錢的流入將影響公債價格，壓低回酬。

股市牛氣衝天寫新高

除了短期公債，股市是另一個可以迅速牟利的市場，例如向來受海內外基金青睞的藍籌股。

白文春指出，股市表現與經濟前景唇齒相依，股市一般隨著經濟前景向好走俏。

“如今宏觀經濟前景黯淡，明年經濟或走下坡，股市一般應隨之黯淡。”

熱錢帶動股市走高，部分投資者固然樂見其成，但非投資者或擔心，這股並非由基本面帶動的牛氣，或加劇通脹壓力。

儘管大馬利率（隔夜官方利率為2.75%）仍處于低水平，但比起接近零利率的日本（0至0.1%）和美國（0至0.25%），我國利率相對仍高。

他說，一旦美國及日本的避險基金流入大馬，除了投資回酬，還是可賺取可觀匯差收益。

事實上，在美國宣佈QE2的一週后，馬股市牛氣十足，在11月9日衝上1526.53點新高，及11月10

日攀上1528點馬股有史以來最高閉市紀錄！

引發資產升值

美國希望美元貶值，迫使人民幣、日圓及歐元等貨幣升值。聯昌投資銀行區域經濟分析主管李興裕指出，QE2以及亞洲相對仍寬鬆的貨幣政策，兩者加起來的影響，或引發新一輪的資產升值。

“這是因為投資者借取低利率貸款，投資在高回酬資產，這包括房地產、黃金、其他原產品及貨幣。”

黃金價格今年迄今已升值20%，銀價今年亦勁漲40%。新興國家貨幣更是被推升，引發貨幣大戰的隱憂。

白文春認為，由于熱錢偏好快及容易轉手的資產，因此熱錢的湧入，不會直接推高本地房地產價格。

他指出，國行不升息，使現有利率企在低水平，此舉或吸引有心者向銀行借貸購買資產，因此才引起房地產泡沫隱憂。

“這也是為什么，國行限制購買第三間屋子貸款額，不能超過屋價的70%。”

貨幣戰硝煙重 不升息免惹熱錢

中國經濟學家謝國忠說，全球貨幣戰爭未爆發，硝煙的味道已到處彌漫。

白文春不諱認，全球確實存有貨幣戰的可能。

“熱錢流入將對該國貨幣產生需求，進而使貨幣升值，若央行不進場干預，只會讓貨幣繼續升值。

升值太快，只會加劇吸引更多游資流入。”

但所有政策都有其關聯性，以馬幣為例，若國家銀行進場干預令吉升勢，即買進外國貨幣、賣出令吉的干預，將變相增加市場上的令吉供應。

他說，為吸納這些市場上的令吉，國行一般會發行更多短期債券，且不會升息，以免擴大（與美國、日本的）利差，導致更多熱錢湧入。

綜觀海外，歐元區未跟進，日本卻趕在聯儲局之前啟動量化寬鬆政策，中國則開始喊話表達不滿。

至于其他國家，一般透過干預貨幣，或落實預扣稅（Withholding Tax），來抑制貨幣升值。

央行進場干預貨幣走勢的舉措，是挑起貨幣戰的導火線之一。

迄今，“貨幣戰”還沒有權威性的定義，但一般是指一個國家憑藉其強大的經濟和金融實力，利

用貨幣和匯率政策，從經濟上打擊競爭對手、取得貿易優勢。

為下一輪危機埋禍根

綜合國內外經濟學家意見，美國聯邦儲備局（FED，簡稱聯儲局）啟動第二輪量化寬鬆政策，或為下一輪的金融危機埋下禍根！

聯儲局在11月3日推出QE2，將注資6000億美元（1兆8600萬令吉），在2011年第二季之前購買國債，藉此刺激企業和民眾貸款，來創造就業和活絡經濟。

中國知名經濟學家謝國忠指出，量化寬鬆政策是各國在貨幣戰爭的武器，大家競相印鈔票的后果，世界末日或不遠矣。

他認為，美國希望美元貶值，並迫使人民幣、日圓及歐元等貨幣升值，以解決目前自身的經濟難題。

問題是，世界各國目前的經濟也未出現明顯復甦，當然選擇出手阻升本國貨幣。

此舉不僅無法解決美國當前的經濟困境，更可能造成難以收拾的通貨膨脹。

謝國忠認為，美國貨幣寬鬆是個“死棋”！全球經濟不穩定就是因為美國在大量印鈔票，以致2012年時，全球可能將再次出現全球式的金融危機。

世銀促管制資本

大量熱錢湧入誘發亞洲資產泡沫，世界銀行呼籲，亞洲國家或需轉向資金管制，以遏止資本泡沫。

世銀執行董事英德拉瓦蒂指出，美國QE2正威脅並誘發亞洲資產泡沫，亞洲有必要恢復資本管制。

但她指出，這些管制措施應是暫時且具有目標的，以遏制這些流動性的湧現。
財金術語

■量化寬鬆政策

量化寬鬆是一種貨幣政策，由中央銀行通過公開市場操作以提高貨幣供應，可視之為“無中生有”創造出指定金額的貨幣，也被簡化形容為間接增印鈔票。

操作方式是央行通過公開市場購入證券等，使銀行在央行開設的結算戶口內的資金增加，為銀行體系注入新的流通性。

量化寬鬆中的“量化”，是指將會創造指定金額的貨幣；“寬鬆”則指減低銀行的資金壓力。

央行向銀行體系增加流動性后，銀行將坐擁大量資金，但只能賺取低利息。

如此一來，銀行的放款意願或更高以賺取回收益，進而紓緩市場的資金壓力。

■何謂本位貨幣

所謂本位貨幣，是一國貨幣制度規定的標準貨幣。

國際本位貨幣是指在國際上，佔據中心貨幣地位、可自由兌換的貨幣。

首先，這項貨幣必須能在全球自由兌換；其次，是能充當國際商品的價值或價格標準，成為各種貨幣匯率計算的中心。

黃金就曾是國際本位貨幣之一。

以黃金為本位時，黃金是整個國際貨幣體系的貨幣標準，使各國貨幣間及進出口物品間，存在一定的比價關係，那時美元的擴張及發行存在較大的約束，不能想印多少就多少。

(Source: Chinapress.com.my, 13th Nov 2010)

Successful Investor's 4 Important Characteristics

In order to stay and grow in the financial market, there are few important points required to be applied. To make money from the market is not a very difficult task, or probably I can describe it as it is not easy to loss money to the market as well. To a certain extent, win or lose is not that important. The question here is how to maintain growing in the market. To be a successful investor, he/she has to maintain the performance and able to protect the profit gained from the market.

There are 4 main factors which could determine the performance of an investor, there are CASH, RIGHT PERCEPTION, PATIENCE, and LUCK.

CASH:
Cash is the main resources, the first model we needed to start venture into financial market. With the model/capital we have, we can design and strategise the game we wish to be. It can be a speculateive play, short-term, mid-term, or long term investment objective, or probably buy and hold strategy.

RIGHT PERCEPTION:
With the right perception we acquired such as the correct mind-set, knowledges and skills, we should be able to perform well in the market. Of course that require time to pick up the skills and experience, which is also call the "tuition fee for the market". But no worry, that's because I strongly believe in "hard work pays".

PATIENCE:
Absolutely! Patience is very important! The main reason we require this characteristic is because most of the losers have actually gave up after losing money to the market, that's the reason they are called "losers". As mentioned earlier, to make money from the market is not difficult. The question is how to keep the profit and let it grow again? If you understand the financial market, you will find the right timing to trade is actually limited, says about 30% of 365days time. Thus, you are always recommended to stay calm and patient waiting for the perfect timing to ensure the highest ROI rewards!

LUCK:
Lastly, when you have applied all the top 3 key factors, what you need to do is to cross your fingers and pray hard. It is same in life, full of uncertainties and surprises happening in the market. Just be conscious and competent enough to react according to the situation!

美啟動次輪量化寬鬆政策,後年或再爆金融危機

美啟動次輪量化寬鬆政策, 後年或再爆金融危機

(紐約8日訊）美國聯邦儲備局（FED，簡稱聯儲局）啟動第二輪量化寬鬆政策，或為下一輪的金融危機埋下禍根！

簡單來說，量化寬鬆政策就是指大量印鈔票。

中國知名經濟學家謝國忠認為，美國希望美元貶值，並迫使人民幣、日圓及歐元等貨幣升值，以解決目前自身的經濟難題，但問題是世界各國目前經濟也未出現明顯復甦，當然選擇出手阻升本幣。

此舉不僅無法解決美國當前的經濟困境，更可能造成難以收拾的通貨膨脹。
“如果美元貶值仍救不了美國出口，量化寬鬆就只會導致通脹，造成石油價格飆升，整個國家將失去穩定。”

謝國忠認為，美國貨幣寬鬆是個“死棋”！

國債市場率先崩潰

世界經濟不穩定就是因為美國在大量印制鈔票，以致2012年時，全球可能將再次出現全球式的金融危機。

“美國已將利率降到零，讓財政赤字達國內生產總值的10%，這是一個頗具震懾力的‘凱因斯式政策’ ，然而經過數季后，經濟並未恢复，失業率也未見改善，刺激政策可說是項失敗。”

謝國忠提出警告，世界將在2012年進入另一場危機，美國國債市場將率先崩潰，美元的價值將隨著飆升的貨幣供應量和通脹蒸發，最后難逃崩潰命運。

美聯儲反駁：沒製造通脹

針對美國聯儲局再次大量購買美國國債，引起了市場的憂慮及大力反彈，該局主席柏南奇回應說：“我們並沒有在製造通脹！”

他說，這種措施不過是用不同工具執行的有效及傳統的貨幣政策。

柏南奇解釋說：“我們不是在製造通脹，我已經說過我們並不是要把通脹率提升到超越正常的水平來對經濟產生影響，由于聯儲局對于使命的兩方面有著對等的承諾，它也需避免物價下降到不符合物價穩定的水平。”

他說，當前經濟增長乏力、在物價壓力越來越弱的環境中，採取更激進的政策或可以有助改善狀況。

各國擔憂

聯儲局此次舉措已引起世界各國擔憂，因為它將給某些貨幣施加對美元升值的壓力。
柏南奇是在亞特蘭大聯邦儲備銀行舉辦的一場活動期間與格林斯潘等人進行小組討論時，如是發表的。

小組討論回顧了美聯儲的歷史，對過去一個世紀聯儲局應對多種劇變時做得成功與否進行了評價。

上週三，負責設定利率的聯邦公開市場委員會（Federal Open Market Committee）說，將在截至明年年中的這段時間收購6000億美元（1兆8528億令吉）的較長期美國國債。

另外還將利用所持抵押貸款類證券到期時收到的賬款，買入約3000億美元（約9264億令吉）的國債。

凱因斯式政策像類固醇

有專家認為，凱因斯式的政策就很像是類固醇，必要時候該用但不可濫用，因為它最大的一個副作用就是造成財赤及負債。

政府支出增加需要更多財源，但偏偏在經濟不景氣時，政府的稅收偏偏比平常還少，政府擴大支出的財源常來自舉債。

但政府借的債將來可是要還息的，因此此政策就會對未來造成負擔，當凱因斯的政策被用太多后，未來的政府財政就會出現很大困難。

最終或許必須通過加稅、縮減支出，使政府無法做該做的事，或以通貨膨脹方式來降低實質負債。

所以政府在採用凱因斯政策之前，必須要仔細思考所需承擔的負債及還款能力。

歐美寬鬆貨幣恐導致中國泡沫

歐美國家正在執行寬鬆貨幣政策，但泡沫最后恐危及中國市場！

北京大學國家發展研究院教授黃益平6日在財新峰會上表示，為應對發達國家貨幣超發所引發的泡沫引向中國，中國應當在短期內加強資本管制。

他說，世界經濟可能不會回到金融危機前的狀態，目前大多數國家財政狀況都已經惡化，今年世界上可能會有40%以上的國家財政赤字超過國內生產總值的10%。

美國及英國公共債務佔國內生產總值比例已經超過90%，日本更是超過200%，這是一個很嚴重的狀況。

黃益平表示，目前歐、美、日部分中央銀行執行寬鬆的貨幣政策，尤其是聯儲局的寬鬆貨幣政策

政策，更意味著世界經濟在未來一段時間內會進入新狀態。

這或導致出現金融危機后第一次經濟增長的下降，伴隨而來的就是通脹壓力的上升。

“如此多的貨幣肯定會製造泡沫，泡沫不會出現在美國，新興市場國家貨幣升值的潛力比較大，利率比較高，經濟增長的勢頭比較猛，所以中國可能就首當其沖。

為了避免這些泡沫引向中國，黃益平認為人民幣要緩步升值，升值后還要加息，控制國內資產以避免投機行為，然后管制資本項目，包括嚴格調查熱錢進來的途徑及限制短期資本的流動。

(Source: China Press dotcom, 8th Nov 2010)

Daily market commentary - 08112010

Commodities & Speculative Game

As commented on 7th nov 2010, I have recommended to focus on commodities stocks like plantation, oil & gas, steel industry, and some of the hidden jewels undervalue stocks like KFIMA, FIMACORP, MFLOUR.

As of todays closing, KLCI is closed at ard 1520 level, accompanied with bigger volume 1.5bil shares traded. It again concludes that the retailers are coming back to the market to create the excitement - which is the right time for the undervalue stocks and the small to mid cap stocks to play the catch up game. It is simply because the bluechips are mostly price in and hitting the ceiling at the moment. Traditionally, a super bull market have to finished by the speculate play, which is the last phase of a bull trend. Subsequently, the market might need to take a breather for some healthy correction. I believe the bull market may last until Jan/Feb 2011, which is quite optimistic at this moment, and there have no negative indicators showing the market may crash anytime soon.

For the hunters, please have a look at these counters:

• Plantation: United plantation, Tsh, Cepat, Th plant.
• Oil & gas : Kencana, Sapcres, Dayang.
• Steel : Lionind, Ann Joo.
• GLC : UEMland, Mrcb, SimeDarby

Market overview - 071110

Market overview:

• KLCI: 1511.74 - highest level after 2008 financial crisis.
• Market volume: 1.1bil - hovering above 1.0bil shares traded daily which was considered quite moderate, with little excitement happening in the market.
• Daily trading participation: It was noticed that the retailers are coming back into the market with about 35% participation, it was above daily average of about 25% before. Local institution participation maintain at 45% level and the other 20% from the foreign participation.

What was happening in the market:

• Speculative counters contributed 60% market volume with 60% active counters made up from small cap stocks.
• Commodities stocks were moving higher, due to the advance of commodities prices such as gold, steel, crude oil, crude palm oil. The main factor is the weakness of USD as US government has committed to spend USD600bil to boost the economy. Subsequently, investors were buying more commodities as safe haven, while more hot money created and flow into emerging market with higher ROI predicted.
• US unemployment rate stays at the high side of 9.6% even though the positive growth of the jobs created in the market.

Weekly trading strategy:

• Focus on hidden jewels with high growth stocks - good fundamental stocks.
• Looking for buying opportunity in commodities stocks like plantation, oil & gas, steel players.
• Stay away from speculative counters as most of them are non-fundamental sound.

4th quarter 2010 Market Trading Strategy

KLCI has surprisingly moving up slowly and steadily towards last record high of 1524 level. In second quarter this year, the KLCI was expected to go through some healthy correction before continue the up trend. But it din not happen, there were only some minor selling pressure kicked in - the interference to the market. It is mainly due to the large amount of hot money kept flowing in to the equities as it has been treated as one of the best ROI area. As far as the global economy is concerned, there are still a lot of uncertainties around, such as the economy recovering momentum & sustainability? Stubburn high unemployment rate? Asian economy overheated - bubble? western economy losing recovering steam......

As of current market situation, most of the index counters are approaching the new 12 months high and subsequently making them look unattractive - overprice. Thus, it is recommended to be extra cautious in picking a good and strong fundamental companies. The task is just getting tougher and tougher. However, there are still a lot of small to mid cap counters which are so called the "hidden jewels" in the market. Please find below as some of my recommendations:

1. Profit taking on index & mid cap counters which is hovering at the new high area
2. Apply 70% cash vs 30% equities strategy.
3. Stay sidelines with patience, wait for clearer economy/market indicators to reaffrim bullish condition.
4. Research on 3rd quarter financial report, pick the strong growth stocks.
5. Listed the favorite stocks, bargain hunting during market/individual stock correction.
6. Lastly, wait for the fruitful ROI, and profit taking during CNY 2011.

Stock hunting - HPI is flying!

As of today, the global markets have been stretching themselves to move higher and higher, with lower and lower energy. It is obviously showing that the market sentiment is about on par with the economy condition, which is stabilising and hovering at the current level. Thus, it is recommended to stay sideline and observe the situation. Just wait for a good opportunity and grab it to optimun the ROI.

KLCI index was succesfully broke the phycological 1500 level last week. Further to this, it is expected to test the last record high at 1527 very soon.

There is one counter I spotted recently - HPI.

Refer to the daily chart of this counter, HPI has successfully broke the upper line, the famous chart pattern - Ascending Triangle. Upon breaking the upper level with the support of high volumn builded, it is expected to fly sky high! Theoretically and based on the chart, it should continue the uptrend towards target price of RM2.60. This is what I am saying - The golden opportunity arise!