below are my comments on what the "4 financial experts said" and below my comments is the article "4 financial experts' forecast for this year" published in Sunday Times 2 Jan 2011.
My comments:
as I always said, analyts' No. 1 objective is to keep their jobs. You can see that they seem to "agree with one another", each saying STI in year 2011 might only go up by about 10%. Becos if your views are not too different from other analyts, when your forecast turns out to be wrong, you will still keep your job.
If as analyst, you stick your neck out and say something different, if it turns out to be wrong, you might get fired.
Most of them also play "safe" by suggesting that people buy Blue Chip stocks. Frankly, most of the blue chips are already trading at PE of 15 or higher, there is not much upside potential left. Even if STI goes up to historical high of 3,900 in year 2007, that is just 20% upside from current levels.
Some said that REITs likely to do well in year 2011. Stock picks included Ascott REIT and Suntec REIT. My opinion is REITs are likely to only move up max 10% to 20% in year 2011. Do you know that Ascott REIT has moved up almost 200% from the low in Mar 2009 and Suntec REIT moved up 50% in year 2010? I said Suntec REIT is worth buying 1 year ago when share price was S$1. Now then analysts suggest you to buy Suntec REIT when price is S$1.50. Are they kinda late?
The stocks that have the most upside potential are the Penny Stocks, below S$1, but none of them dare to say so, (so that if they are wrong, they can still keep their jobs).
So, do you still want to listen to these analyts who are NOT very accurate in their forecast? (If you don't believe me, just track what they say and you might realise their "hit rate" is about 50%, (you might as well flip a coin also have 50% chance, why bother wasting time listening to them?)
I disagree with their views. In Jan 2010, when most analyts were either overly bullish or bearish (some said STI in year 2010 might exceed 3,900) and some said STI would fall, I wrote in My Paper on 6 Jan 2011 that STI likely to go up by about 10% (bingo, I got it right).
Now in Jan 2011, when most analyts are very conservative, thinking STI in year 2011 might only go up 10%, my views are different. I think possibility for STI to go up to 3,600 to possibly even breaking the historical high of 3,900. Many of these analysts forget that Philippines, Indonesia and even Malaysia had already reached NEW historical high, so it is possible for STI to reach a New Historical High as well.
And I want to repeat myself:"forget Blue chips, the upside potential for Blue chips is only 10% to 20%, even if STI goes to 3,900. In the last Rally in the Bull market, it'll be the penny stocks that are likely to do well. Penny stocks by definition are those priced below S$1. However, in my opinion, the Real penny stocks are those priced below 50 cents.
Be careful, because many of these penny stocks are rubbish stocks. However, there are some that have solid fundamentals eg. Chip Eng Seng, Tuan Sing, GK Goh, just to name a few. And many of these penny stocks are trading at PE below 10 times vs average PE of 15 times for STI component stocks such as DBS, Singtel, SPH, etc.
And after going up, the stock markets might CRASH in late year 2011 or year 2012. Yes, Crash, not correct. The reason is by late year 2011, after U.S. finished printing money, people might realise that U.S. economy is still not exactly growing, and when that realisation creeps in, there might be a crash in confidence, leading to a crash in stock markets.
I dare to say all these becose my Main Motivation is NOT to keep my job (analysing investment is NOT my job), I am an investor. And as an investor, we dare to speak our Mind becos the accuracy of our views determines our Investment Results. We put our money where our mouths are, so we don't anyhow say anything as well. Becos, if we are wrong in our views, we might lose money.
And as to my track record, I think if you follow what I have been sharing, you would agree that it is definitely higher than 50% correct, possibly right 70% of the times. And to make money in investing, we only need to be right 51% of the times only.
Cheers!
Dennis Ng, http://www.MasterYourFinance.com - author of bestselling Bilingual book on Personal Finance - "Mastering Your Personal Finance"
"4 financial experts' forecast for this year"
Trading volatility likely to persist into new year, after a year when STI gained modest 10%
Share market investors had a dizzying ride in 2009 but the pace has been a bit more pedestrian last year, with modest gains of around 10 per cent.
On Friday, the benchmark Straits Times Index (STI) closed at 3,190.04.
That would be welcome in many countries but local traders have been a little spoiled of late.
For full-time investor Isaac Chin, 61, his fortunes have been tracking STI rises in the past two years.
He described the STI performance last year as 'lack- lustre' when compared to the more than $1.5 million gain he enjoyed in 2009 when the STI nearly doubled to 2,897.62 from its March lows of 1,456.
Mr Chin is fully invested in real estate investment trusts (Reits) and DBS preference shares.
'CapitaMall Trust and Suntec Reit remain my favourite picks for this year. They are retail/office plays and Suntec Reit has just acquired a stake in Marina Bay Financial Centre Phase One,' he said.
Mr Chin also believes the STI can reach 3,500 to 3,700 by the middle of this year.
Mr Lim Say Boon, DBS Private Banking's chief investment officer, said 2010 had been a year of sideways trading for shares in the developed world.
'It has been the year of the emerging market theme, as manifested by emerging market equities, local currency emerging market bonds, Asia ex-Japan properties and commodities, which in turn are driven by emerging market growth,' he said.
OCBC Investment Research's head of research Carmen Lee noted several highs and lows last year, with three major areas of action.
Europe's sovereign debt situation remained a drag on market sentiment even after a US$1 trillion (S$1.3 trillion) emergency rescue package managed to quell fears of a new credit crisis.
The United States government announced a US$600 billion quantitative easing package that led to a rally in November on expectation of increased funds flowing into the markets.
China, always closely watched, introduced several rounds of measures, including interest rate hikes, to rein in inflation and drain liquidity from the market.
Despite the volatility in these markets, Singapore's economy clocked up growth of 14.7 per cent last year with expansion of 4 to 6 per cent tipped for this year.
'With the protracted euro zone debt issue and concern over the pace of recovery in the US, this will continue to translate into trading volatility in the market this year,' cautioned Ms Lee.
Mr Lim of DBS expects commodities to outperform.
He stressed the importance of including bonds as diversifiers and insurance against volatility, even in the most bullish of scenarios.
'Depending on the risk appetite of the investor, for example, in our strategic asset allocation models, bonds represent 55 per cent of the portfolio for the most conservative, through to 10 per cent for the most aggressive,' he said.
The Sunday Times polled four financial experts on their market outlook.
MS JANICE CHUA
Head of DBS Vickers Research, Singapore
Q: What are the sector/stock picks for 2011?
We target STI to hit 3,500 by the first quarter of this year and there is even upside potential to 3,600.
We see commodity plays as an inflation hedge.
We expect crude palm oil prices to resume their uptrend from the end of last year through to March due to the weak US dollar, strong demand from China and declining yield.
Our stock picks are Indofood Agri with a target price of $3.20, SembCorp Marine at $5.48, Keppel Corp at $12.20 and Cosco Corp at $2.35.
The trend for strong visitor arrivals should continue into this year, driven by new attractions at Universal Studios in Sentosa, the gear-up to host larger conferences and meetings, the opening of Gardens by the Bay and the International Cruise Terminal.
Hospitality-related stocks should continue to deliver strong earnings and our picks are Genting Singapore with a target price of $2.70, SIA at $18.50, UOL at $5.23 and CDL Hospitality Trusts at $2.28.
Q: What's your tip?
In the Year of the Rabbit, be as fleet-footed since stock valuations have already risen from their bear-market bottom.
The easy money was made during the first 12 months of the global recovery that started in March 2009.
Stock and thematic picks have became more relevant and this skill will be even more essential to have in 2011 as the recovery enters its third year.
MR TERENCE WONG
Executive director at DMG & Partners Research
Q: How do you see 2011 panning out?
It should be an exciting start to the New Year, driven by loose liquidity - thanks to the US Fed's second round of quantitative easing - and low interest rates.
Fund managers are expected to pile in early in the year to build up their positions.
Retail investors who were out of the picture in the fourth quarter of last year will likely re-enter the market in a meaningful way, leading to a broad-based run.
In a maximum bullish scenario where sentiments hit feverish pitch, it is not unfathomable to see the market punch past 10 per cent gains by mid-year.
But the market will likely tame down after that and may settle with 5 per cent to 10 per cent gains for the year.
Q: What are the sector/stock picks for 2011?
Our stock picks include CDL Hospitality Trusts at a target price of $2.51 as Singapore sees record tourism numbers.
Occupancy is very tight at about 92 per cent, which should result in average room rates heading north.
We also like FJ Benjamin, with the target price at 52 cents, as we believe that strong visitor arrivals coupled with the solid job market should boost retailers.
Domestic consumer sentiment is also on the rise in both Malaysia and Indonesia which are FJ Benjamin's key markets.
Other stock picks are Sino Grandness at 56 cents, as it is enjoying strong earnings growth driven by domestic beverage sales and is expanding its distribution network in China; Ezion at $1 and First Resources at $2.05.
MS CARMEN LEE
OCBC Investment Research's head of research
Q: How do you see 2011 panning out?
We remain positive on the Singapore market.
We expect some of the favourable factors last year to spill over into this year.
This include the current low interest rate environment, quality earnings for Singapore blue chips of at least 10 per cent this year and the good liquidity in the market.
However, volatility is likely to remain as euro zone concerns will linger.
Q: What are the sector/stock picks for 2011?
Valuations are fairly attractive at current levels and stocks are inexpensive.
In addition, most STI stocks provide dividend yield of at least 3 per cent.
We see potential for the STI to go up another 10 per cent to about 3,500, largely underpinned by healthy earnings growth.
We are still positive on several sectors including oil and gas, commodity and plantations, health care, Singapore Reits and banking.
Our key stock picks are Ascott Residence Trust at a target price of $1.38, Biosensors at $1.35, CapitaLand at $4.54, DBS at $16, Ezra at $2.27, Genting at $2.53, Hyflux at $3.66, Keppel Corp at $12.50, Mapletree Logistics Trust at $1, Noble at $2.59, Olam at $3.53, Pacific Andes Resources at 40 cents, Sembcorp Marine at $5.70, StarHub at $3.02, UOB at $19.70, UOL at $5.42 and Venture Corp at $12.10.
Q: What's your tip?
We advocate investing in quality stocks in the right sectors with good track record, management teams and good order flow.
We prefer to stick with blue chips, in particular, blue chip laggards last year such as DBS, UOB, CapitaLand, Noble and SGX.
MS TAN MIN LAN
Strategist at UBS Investment Research
Q: How do you see 2011 panning out?
We expect the US Federal Reserve to start raising interest rates only in September and by small increases.
This means interest rates here will remain near record lows for the next nine to 12 months.
As a result, Singapore Reits would benefit the most while firms with US dollar or euro revenue and assets in developed markets should feel the drag of a stronger Singapore dollar, specifically tech firms such as ST Engineering, Wilmar and Hyflux.
Meanwhile, retail spending could remain muted as locals increasingly shop overseas.
Year to date, retail sales excluding autos have increased just 7 per cent.
Q: What are the sector/stock picks for 2011?
We like Overseas Union Enterprise at a target price of $4.28 for its significant exposure to prime office space and hotels, and Indofood Agri at $3.70, as it is well positioned to benefit from rising cash flow, improving profitability, lower gearing and potential for dividend payouts following the completion of its major capital expenditure cycle.
Other stock picks are Keppel Land at $5.08, Keppel Corp at $11.10, SembCorp Industries at $5.68, OCBC at $11.30, Sats at $3.40, Noble at $2.70 and DBS at $16.60.
Our least preferred stocks are StarHub, CDL, CapitaMall Trust, ST Engineering and UOB .
lorna@sph.com.sg
# VISITOR ARRIVALS UPTREND TO CONTINUE The trend for strong visitor arrivals should continue into 2011 driven by new attractions in Universal Studios at Sentosa, the gear-up to host larger conferences and meetings, the opening of Gardens by the Bay and the International Cruise Terminal.
MS JANICE CHUA, head of DBS Vickers Research, Singapore
# EXCITING START TO THE YEAR LIKELY It should be an exciting start to the new year, driven by loose liquidity ? thanks to the US Fed?s second round of quantitative easing ? and low interest rates. Fund managers are expected to pile in early in the year to build up their positions.
MR TERENCE WONG, executive director at DMG & Partners Research
# IMPACT OF STRONGER SING DOLLAR Interest rates here will remain near record lows for the next nine to 12 months... Singapore Reits would benefit the most while firms with US dollar or euro revenue and assets in developed markets should feel the drag of a stronger Singapore dollar.
MS TAN MIN LAN, strategist at UBS Investment Research
# POSITIVE FACTORS MAY SPILL INTO 2011 We expect some of the favourable factors last year to spill over into this year. This include the current low interest rate environment, quality earnings for Singapore blue chips of at least 10 per cent this year and the good liquidity in the market.
MS CARMEN LEE, OCBC Investment Research?s head of research
Financial Experts' Forecast for Year 2011 and Dennis' views
Moderators: alvin, learner, Dennis Ng
Financial Experts' Forecast for Year 2011 and Dennis' views
Cheers!
Dennis Ng - When You Master Your Finances, You Master Your Destiny
Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
Dennis Ng - When You Master Your Finances, You Master Your Destiny
Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
Hi,
This is my personal opinion.
I agreed with Dennis on his view. Don't be fool by all this financial experts. Look at who they are working for, DBS, UBS, OCBC etc. I feel that nowadays bank intention is not to look after the interest of the public. They have their hidden agenda.
Now think about it, when Sunday Time interview them, it should be last year before the market close. And what do you think these financial experts are doing ? They maybe the invisible hand or the big player who already advise their fund manager to buy all the stocks at low price mention in Sunday Time today. When SPH reporter come to interview them last year, they understand the media power very well. They told them their favorite stocks so that the reporters can write them in the newspaper today. What is their motive ? To influence public so that all of them will rush in to buy those stock tomorrow when the first day of the market open this year. Sadly many of the public don't know many of those stock are already overvalue or has limited upside potential. However because of the power of media, most of the public will rush in to buy all those blue chip stocks these financial expert recommend to buy. Naturally their share price will go up in the next few days. But like Dennis say what are the upside potential of those stock ? Are they sustainable ?
Therefore I think we should not chase after the hot stock. But I don't meant that you should not buy any of the stock mention in Sunday Time today. I am not here to give you any financial advise. But just to share my personal opinion on what all these financial are up to. It is up to you to do your homework on what stock to invest. There are many good cold stock with good FA that already mention here in this forum they have more than 50% upside potential than blue chips stock. Maybe you like to reconsider and study carefully before you follow the others to jump in to buy the stock that these financial expert try to tempt you to buy.
James Tai
This is my personal opinion.
I agreed with Dennis on his view. Don't be fool by all this financial experts. Look at who they are working for, DBS, UBS, OCBC etc. I feel that nowadays bank intention is not to look after the interest of the public. They have their hidden agenda.
Now think about it, when Sunday Time interview them, it should be last year before the market close. And what do you think these financial experts are doing ? They maybe the invisible hand or the big player who already advise their fund manager to buy all the stocks at low price mention in Sunday Time today. When SPH reporter come to interview them last year, they understand the media power very well. They told them their favorite stocks so that the reporters can write them in the newspaper today. What is their motive ? To influence public so that all of them will rush in to buy those stock tomorrow when the first day of the market open this year. Sadly many of the public don't know many of those stock are already overvalue or has limited upside potential. However because of the power of media, most of the public will rush in to buy all those blue chip stocks these financial expert recommend to buy. Naturally their share price will go up in the next few days. But like Dennis say what are the upside potential of those stock ? Are they sustainable ?
Therefore I think we should not chase after the hot stock. But I don't meant that you should not buy any of the stock mention in Sunday Time today. I am not here to give you any financial advise. But just to share my personal opinion on what all these financial are up to. It is up to you to do your homework on what stock to invest. There are many good cold stock with good FA that already mention here in this forum they have more than 50% upside potential than blue chips stock. Maybe you like to reconsider and study carefully before you follow the others to jump in to buy the stock that these financial expert try to tempt you to buy.
James Tai
Thanks and agreed with views by Dennis and James. Prediction is not an easy task as anything unexpected may happen which will will disturb the current pace of economy (eg. previous SARS, 911...)
Chasing after hot stocks or blue chips will still earn profit, but the potential is not as high as those undervalued ones, this is what we have been learning from Dennis seminars and forum here.
At least there is a common point by most researchers/analysts: major trend is moving upwards, only diff is how much is the magnitude. Even if they make a mistake (Eg. underestimate the growth), likely we will still make profit. A more challenging prediction will be 1 year later for 2012, when the market is heated up, most penny stocks are up regardless of their fundamental strength, who will give the warning to pull the brake?
A game of balance for risk vs return ... diff value for everyone
Chasing after hot stocks or blue chips will still earn profit, but the potential is not as high as those undervalued ones, this is what we have been learning from Dennis seminars and forum here.
At least there is a common point by most researchers/analysts: major trend is moving upwards, only diff is how much is the magnitude. Even if they make a mistake (Eg. underestimate the growth), likely we will still make profit. A more challenging prediction will be 1 year later for 2012, when the market is heated up, most penny stocks are up regardless of their fundamental strength, who will give the warning to pull the brake?
A game of balance for risk vs return ... diff value for everyone
jamestai wrote:Hi,
This is my personal opinion.
I agreed with Dennis on his view. Don't be fool by all this financial experts. Look at who they are working for, DBS, UBS, OCBC etc. I feel that nowadays bank intention is not to look after the interest of the public. They have their hidden agenda.
Now think about it, when Sunday Time interview them, it should be last year before the market close. And what do you think these financial experts are doing ? They maybe the invisible hand or the big player who already advise their fund manager to buy all the stocks at low price mention in Sunday Time today. When SPH reporter come to interview them last year, they understand the media power very well. They told them their favorite stocks so that the reporters can write them in the newspaper today. What is their motive ? To influence public so that all of them will rush in to buy those stock tomorrow when the first day of the market open this year. Sadly many of the public don't know many of those stock are already overvalue or has limited upside potential. However because of the power of media, most of the public will rush in to buy all those blue chip stocks these financial expert recommend to buy. Naturally their share price will go up in the next few days. But like Dennis say what are the upside potential of those stock ? Are they sustainable ?
Therefore I think we should not chase after the hot stock. But I don't meant that you should not buy any of the stock mention in Sunday Time today. I am not here to give you any financial advise. But just to share my personal opinion on what all these financial are up to. It is up to you to do your homework on what stock to invest. There are many good cold stock with good FA that already mention here in this forum they have more than 50% upside potential than blue chips stock. Maybe you like to reconsider and study carefully before you follow the others to jump in to buy the stock that these financial expert try to tempt you to buy.
James Tai
Hi ein55,ein55 wrote:Thanks and agreed with views by Dennis and James. Prediction is not an easy task as anything unexpected may happen which will will disturb the current pace of economy (eg. previous SARS, 911...)
Chasing after hot stocks or blue chips will still earn profit, but the potential is not as high as those undervalued ones, this is what we have been learning from Dennis seminars and forum here.
At least there is a common point by most researchers/analysts: major trend is moving upwards, only diff is how much is the magnitude. Even if they make a mistake (Eg. underestimate the growth), likely we will still make profit. A more challenging prediction will be 1 year later for 2012, when the market is heated up, most penny stocks are up regardless of their fundamental strength, who will give the warning to pull the brake?
A game of balance for risk vs return ... diff value for everyone
I'm not worried at all, the market will through charts and Moving Average tell us when to pull the brake, when to "get off the train".
The last Train (Rally) in the Singapore stock Market has barely started.
As for Risks, buying Tuan Sing at 24 cents with its NAV at 45 cents, I don't see how this is more risky than buying Capitaland at S$3.71 when its NAV is S$3.17. Most people have this mistaken belief that buying Blue Chips is low risk and buying Penny stocks is high Risk.
I admit many penny stocks are rubbish stocks, and can drop by 50% to 90% in a stock market crash. However, if one learns how to analyse and choose stocks, one can choose to buy stocks that have good fundamentals and trading a discount (Margin of Safety concept as advocated by Benjamin Graham).
Cheers!
Dennis Ng - When You Master Your Finances, You Master Your Destiny
Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
Dennis Ng - When You Master Your Finances, You Master Your Destiny
Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
My gauge of the current market:
the market is getting hotter.
However, most of the retail investors are still not in the stock market. Or if they have invested, it is not much, they are not yet fully invested.
Many are still worried, worried about possibility of Korean War; Europe Debt Crisis; China Inflation; U.S. Economy;
In the meantime, while many people worry, I'm not worried.
When these people (people who don't know how to invest) start to feel confident and they no longer worry, then I'll be very worried, and probably sell off my shares. But until then, and until the 200 day MA cut the 50 day MA, I'm not worried. I'm starting to enjoy the "ride", which has just started.
Let the market trend be your friend until it ends - as Yip Khiong shared in the Seminar.
The Last Rally in the Current Bull Market has just started. If you miss this round, given that the next Crisis might strike in end 2011 or year 2012, and it might take 1 year before Crisis reached bottom.....it means that you might have to Lose (wait) 3 years for the Next Chance to make money in stocks.
By that time, probably, I've again doubled my wealth, from current S$2 million to S$4 million. So the longer you delay in making your first million (I reached mine in year 2008 after 15 years since I graduated from university), the longer you wait to reach your 2nd million and so forth.
Please remember that if you buy stocks without knowing how to analyse and choose stocks, it is equivalent to gambling.
The Good News is I am willing to teach the "Secrets to Making Money in Stocks" . The only question is When do you want to learn?
Details of the seminar is here:
http://www.masteryourfinance.com/web/in ... &Itemid=35
the market is getting hotter.
However, most of the retail investors are still not in the stock market. Or if they have invested, it is not much, they are not yet fully invested.
Many are still worried, worried about possibility of Korean War; Europe Debt Crisis; China Inflation; U.S. Economy;
In the meantime, while many people worry, I'm not worried.
When these people (people who don't know how to invest) start to feel confident and they no longer worry, then I'll be very worried, and probably sell off my shares. But until then, and until the 200 day MA cut the 50 day MA, I'm not worried. I'm starting to enjoy the "ride", which has just started.
Let the market trend be your friend until it ends - as Yip Khiong shared in the Seminar.
The Last Rally in the Current Bull Market has just started. If you miss this round, given that the next Crisis might strike in end 2011 or year 2012, and it might take 1 year before Crisis reached bottom.....it means that you might have to Lose (wait) 3 years for the Next Chance to make money in stocks.
By that time, probably, I've again doubled my wealth, from current S$2 million to S$4 million. So the longer you delay in making your first million (I reached mine in year 2008 after 15 years since I graduated from university), the longer you wait to reach your 2nd million and so forth.
Please remember that if you buy stocks without knowing how to analyse and choose stocks, it is equivalent to gambling.
The Good News is I am willing to teach the "Secrets to Making Money in Stocks" . The only question is When do you want to learn?
Details of the seminar is here:
http://www.masteryourfinance.com/web/in ... &Itemid=35
Cheers!
Dennis Ng - When You Master Your Finances, You Master Your Destiny
Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
Dennis Ng - When You Master Your Finances, You Master Your Destiny
Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
Equities set to grab the headlines in 2011
Bonds expected to take a backseat this year; Asian and commodity stocks may fly
By LYNN KAN AND LINETTE LIM
(SINGAPORE) If 2010 was the year of corporate and emerging market bonds, then 2011 is gearing up to be the year of equities.
'The upside has become more limited for corporate and emerging market bonds, as coupons will not rise in the event of higher inflation rates, and bonds are now trading closer to fair value,' said UBS researchers. 'The opposite is true for equities that still haven't unlocked their full valuation potential.'
JPMorgan is also favouring equities over bonds, against a backdrop of accelerating global growth and peripheral Europe's sovereign debt crisis.
'The dominance of growth stimulus over inflation control across much of the world makes us overweight real assets, such as equities, real estate and commodities, over nominal assets, which are cash and bonds,' the bank said.
'After a decade of disappointing equity returns and a slow death for the equity culture, equities may again become a preferred asset for no other reason than the alternative - bonds - looks dangerous in comparison.'
If equities are generally back in favour, then commodities, cyclicals and technology are the sectors to be in, as well as Asian and emerging stocks which are set to outpace the developed markets.
Most investment banks agree that the commodity price jumps in 2010 will stretch into 2011. 'We favour commodities where supply growth is limited, such as gold, copper and corn, and where prices haven't seen exponential increases, such as cotton and silver,' said UBS.
Credit Suisse added that because prices have gotten expensive - gold has winged its way above US$1,300 per ounce, for instance - investors should adopt 'momentum investing' tactics to exploit 'significant price swings'. 'Although passive buy-and- hold investment strategies should still have some upside in 2011, we think a momentum investment strategy is more promising . . . (these are) investment strategies that shift positions and sectors more often and focus on markets where strong price movements emerge.'
Also bullish on commodities is JPMorgan, citing 'strong demand from the emerging markets, in particular China, coupled with tight supply conditions'.
As more and more smartphones and tablets get snapped up by consumers, technology stocks in Asia look promising. 'Demand in 2011 should hold up well because of the overwhelming new product pipeline,' said HSBC. 'Since we do not expect a single brand or product to dominate in the current competitive environment, component makers such as Largan will better benefit from these new product launches,' said the bank, which is 'overweight' on the Taiwanese technology sector.
JPMorgan is favouring the US technology sector. 'With Republicans taking control of the House, policies are set to become more business-friendly for US companies. Our US equity analysts believe that healthcare and technology are the sectors poised to see the most benefits.'
The consensus is that Asian and emerging market equities should fare better than advanced economies in the US and Europe. The banks said valuations in Asia are still not overstretched. Said Citi: 'If every investor and his/her dog were fully invested in Asia ex-Japan, multiples would surely be higher than they currently are, as would trading volumes.'
Credit Suisse and Citi are looking at an upside of 19 per cent and 25 per cent, respectively, from Asian stocks, while HSBC is expecting what it called a more 'modest' 11 per cent return, given concerns that earnings growth could be thwarted by weak margin expansion due to rising inflation.
The Chinese market drew mixed calls - UBS and Credit Suisse prefer China, while HSBC and Citi are 'neutral'. JPMorgan is keeping its 'underweight' rating on China. 'The shift in the Chinese growth model away from investment into consumption benefits only a small part of its MSCI benchmark,' it noted. 'In addition, 79 per cent of MSCI China consists of companies where the government is the controlling shareholder, which makes them vulnerable to policy risk.'
Taiwan and Russia are two other markets which drew votes from analysts. HSBC and UBS said that the Taiwanese market is trading at a discount, while both JPMorgan and UBS are overweight on Russian equities.
The recent US stockmarket rally - the S&P 500 has risen about 5.7 per cent since the start of December - has revived hopes of an 'American regeneration'. Credit Suisse favours innovative American corporates like Apple, those with strong branding and re-engineered business models like GM, and companies which have powered their way into new markets like Coca-Cola.
UBS noted that investors should not abandon Europe entirely, but to focus on 'economically strong core Eurozone countries' like Germany and Switzerland.
While the focus will be very much on equities, bonds are not totally written off. Said UBS: 'Within the investment-grade segment, we caution investors to limit exposure to bonds with long maturities (over 10 years), and recommend finding opportunities in the 'BBB' space, ideally those with five to seven years of maturity. We continue to like bonds of Hong Kong and Singapore conglomerates, and lower Tier-2 debt of Hong Kong banks.'
Investors should also add credit risk to their fixed income portfolios with higher-yielding corporate bonds and emerging market government bonds, said Credit Suisse, UBS and JPMorgan.
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RE: Equities set to grab the headlines in 2011
Not just the locals. Ang Mohs (US, in this case) bullish too.
This was taken from today's Today. (link)
A look ahead
10 ways a firm US recovery will manifest in 2011
by Bob Doll
05:55 AM Jan 13, 2011
As a way of discussing our economic and market views for the year, we present our 10 predictions for this year:
1. Growth in the United States accelerates as real GDP reaches a new all-time high.
2. The US economy creates 2 million to 3 million jobs this year as the unemployment rate falls to 9 per cent.
3. US stocks experience a third year of double-digit percentage returns for the first time in more than a decade as earnings reach a new all-time high.
4. Stocks outperform bonds and cash.
5. The US stock market outperforms the MSCI World Index.
6. The US, Germany and Brazil outperform Japan, Spain and China.
7. Commodities and emerging market currencies outperform the US dollar, the euro and the Japanese yen.
8. Strong balance sheets and free cash flow lead to significant increases in dividends, share buybacks, mergers and acquisitions and business reinvestment.
9. Investor capital flows move from bond funds to equity funds.
10. The US presidential campaign next year sees a plethora of Republican candidates, while Mr Barack Obama continues to move to the political centre.
For some context around these predictions, we expect to see continued improvement in US economic growth, especially the quality of that growth.
This trend, coupled with improved business and consumer confidence as well as a less hostile capital markets attitude from Washington, should lead to another reasonably good year for risk assets including equities in particular.
Our 1,350-plus S&P 500 Index target implies that the stock market should appreciate at least in line with earnings with the risks skewed more to the upside than was the case last year.
The cyclical recovery should continue but at a less-than-normal pace due to the structural problems that continue to face most of the developed world.
In this environment, the US Federal Reserve will likely remain accommodative, which will probably result in some further steepening of the yield curve. Equities are likely to surpass fixed income as the preferred asset class, both in terms of price appreciation and investor flows.
We expect the US stock market to outperform the MSCI World Index again this year. The gap between the higher growth rates in the developing world and the lower ones of the developed world will likely shrink somewhat this year, causing less differentiation in equity returns.
On the possible what-can-go-right front, we include an acceleration in jobs gains, improving business and consumer confidence, a possible upside surprise in real GDP, corporate earnings exceeding expectations (as seen last year) and Washington, beginning to address the debt and Budget problems.
The what-can-go-wrong list includes the possibility of credit problems resurfacing (including US housing, sovereign nations and state and local governments), commodity price increases causing profit margin pressure, inflation fears, a higher-than-expected rise in interest rates and excessive emerging markets tightening to curb asset bubbles.
The upside possibilities could lead to a stock market that appreciates 10- to 20-per-cent more than we expect, while the downside issues could result in low double-digit percentage losses. In summary, while our expected gains for equity markets are similar going into 2011 to what they were going into 2010, we believe that the risks have moved from the downside to the upside.
The writer is vice-chairman and chief equity strategist for fundamental equities at BlackRock, a premier provider of global investment management, risk management and advisory services. He also is lead portfolio manager of BlackRock's Large Cap Series Funds. Prior to joining the firm, he was president and chief investment officer of Merrill Lynch Investment Managers.
Bonds expected to take a backseat this year; Asian and commodity stocks may fly
By LYNN KAN AND LINETTE LIM
(SINGAPORE) If 2010 was the year of corporate and emerging market bonds, then 2011 is gearing up to be the year of equities.
'The upside has become more limited for corporate and emerging market bonds, as coupons will not rise in the event of higher inflation rates, and bonds are now trading closer to fair value,' said UBS researchers. 'The opposite is true for equities that still haven't unlocked their full valuation potential.'
JPMorgan is also favouring equities over bonds, against a backdrop of accelerating global growth and peripheral Europe's sovereign debt crisis.
'The dominance of growth stimulus over inflation control across much of the world makes us overweight real assets, such as equities, real estate and commodities, over nominal assets, which are cash and bonds,' the bank said.
'After a decade of disappointing equity returns and a slow death for the equity culture, equities may again become a preferred asset for no other reason than the alternative - bonds - looks dangerous in comparison.'
If equities are generally back in favour, then commodities, cyclicals and technology are the sectors to be in, as well as Asian and emerging stocks which are set to outpace the developed markets.
Most investment banks agree that the commodity price jumps in 2010 will stretch into 2011. 'We favour commodities where supply growth is limited, such as gold, copper and corn, and where prices haven't seen exponential increases, such as cotton and silver,' said UBS.
Credit Suisse added that because prices have gotten expensive - gold has winged its way above US$1,300 per ounce, for instance - investors should adopt 'momentum investing' tactics to exploit 'significant price swings'. 'Although passive buy-and- hold investment strategies should still have some upside in 2011, we think a momentum investment strategy is more promising . . . (these are) investment strategies that shift positions and sectors more often and focus on markets where strong price movements emerge.'
Also bullish on commodities is JPMorgan, citing 'strong demand from the emerging markets, in particular China, coupled with tight supply conditions'.
As more and more smartphones and tablets get snapped up by consumers, technology stocks in Asia look promising. 'Demand in 2011 should hold up well because of the overwhelming new product pipeline,' said HSBC. 'Since we do not expect a single brand or product to dominate in the current competitive environment, component makers such as Largan will better benefit from these new product launches,' said the bank, which is 'overweight' on the Taiwanese technology sector.
JPMorgan is favouring the US technology sector. 'With Republicans taking control of the House, policies are set to become more business-friendly for US companies. Our US equity analysts believe that healthcare and technology are the sectors poised to see the most benefits.'
The consensus is that Asian and emerging market equities should fare better than advanced economies in the US and Europe. The banks said valuations in Asia are still not overstretched. Said Citi: 'If every investor and his/her dog were fully invested in Asia ex-Japan, multiples would surely be higher than they currently are, as would trading volumes.'
Credit Suisse and Citi are looking at an upside of 19 per cent and 25 per cent, respectively, from Asian stocks, while HSBC is expecting what it called a more 'modest' 11 per cent return, given concerns that earnings growth could be thwarted by weak margin expansion due to rising inflation.
The Chinese market drew mixed calls - UBS and Credit Suisse prefer China, while HSBC and Citi are 'neutral'. JPMorgan is keeping its 'underweight' rating on China. 'The shift in the Chinese growth model away from investment into consumption benefits only a small part of its MSCI benchmark,' it noted. 'In addition, 79 per cent of MSCI China consists of companies where the government is the controlling shareholder, which makes them vulnerable to policy risk.'
Taiwan and Russia are two other markets which drew votes from analysts. HSBC and UBS said that the Taiwanese market is trading at a discount, while both JPMorgan and UBS are overweight on Russian equities.
The recent US stockmarket rally - the S&P 500 has risen about 5.7 per cent since the start of December - has revived hopes of an 'American regeneration'. Credit Suisse favours innovative American corporates like Apple, those with strong branding and re-engineered business models like GM, and companies which have powered their way into new markets like Coca-Cola.
UBS noted that investors should not abandon Europe entirely, but to focus on 'economically strong core Eurozone countries' like Germany and Switzerland.
While the focus will be very much on equities, bonds are not totally written off. Said UBS: 'Within the investment-grade segment, we caution investors to limit exposure to bonds with long maturities (over 10 years), and recommend finding opportunities in the 'BBB' space, ideally those with five to seven years of maturity. We continue to like bonds of Hong Kong and Singapore conglomerates, and lower Tier-2 debt of Hong Kong banks.'
Investors should also add credit risk to their fixed income portfolios with higher-yielding corporate bonds and emerging market government bonds, said Credit Suisse, UBS and JPMorgan.
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Today, 09:40 AM
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kazukirai Online
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RE: Equities set to grab the headlines in 2011
Not just the locals. Ang Mohs (US, in this case) bullish too.
This was taken from today's Today. (link)
A look ahead
10 ways a firm US recovery will manifest in 2011
by Bob Doll
05:55 AM Jan 13, 2011
As a way of discussing our economic and market views for the year, we present our 10 predictions for this year:
1. Growth in the United States accelerates as real GDP reaches a new all-time high.
2. The US economy creates 2 million to 3 million jobs this year as the unemployment rate falls to 9 per cent.
3. US stocks experience a third year of double-digit percentage returns for the first time in more than a decade as earnings reach a new all-time high.
4. Stocks outperform bonds and cash.
5. The US stock market outperforms the MSCI World Index.
6. The US, Germany and Brazil outperform Japan, Spain and China.
7. Commodities and emerging market currencies outperform the US dollar, the euro and the Japanese yen.
8. Strong balance sheets and free cash flow lead to significant increases in dividends, share buybacks, mergers and acquisitions and business reinvestment.
9. Investor capital flows move from bond funds to equity funds.
10. The US presidential campaign next year sees a plethora of Republican candidates, while Mr Barack Obama continues to move to the political centre.
For some context around these predictions, we expect to see continued improvement in US economic growth, especially the quality of that growth.
This trend, coupled with improved business and consumer confidence as well as a less hostile capital markets attitude from Washington, should lead to another reasonably good year for risk assets including equities in particular.
Our 1,350-plus S&P 500 Index target implies that the stock market should appreciate at least in line with earnings with the risks skewed more to the upside than was the case last year.
The cyclical recovery should continue but at a less-than-normal pace due to the structural problems that continue to face most of the developed world.
In this environment, the US Federal Reserve will likely remain accommodative, which will probably result in some further steepening of the yield curve. Equities are likely to surpass fixed income as the preferred asset class, both in terms of price appreciation and investor flows.
We expect the US stock market to outperform the MSCI World Index again this year. The gap between the higher growth rates in the developing world and the lower ones of the developed world will likely shrink somewhat this year, causing less differentiation in equity returns.
On the possible what-can-go-right front, we include an acceleration in jobs gains, improving business and consumer confidence, a possible upside surprise in real GDP, corporate earnings exceeding expectations (as seen last year) and Washington, beginning to address the debt and Budget problems.
The what-can-go-wrong list includes the possibility of credit problems resurfacing (including US housing, sovereign nations and state and local governments), commodity price increases causing profit margin pressure, inflation fears, a higher-than-expected rise in interest rates and excessive emerging markets tightening to curb asset bubbles.
The upside possibilities could lead to a stock market that appreciates 10- to 20-per-cent more than we expect, while the downside issues could result in low double-digit percentage losses. In summary, while our expected gains for equity markets are similar going into 2011 to what they were going into 2010, we believe that the risks have moved from the downside to the upside.
The writer is vice-chairman and chief equity strategist for fundamental equities at BlackRock, a premier provider of global investment management, risk management and advisory services. He also is lead portfolio manager of BlackRock's Large Cap Series Funds. Prior to joining the firm, he was president and chief investment officer of Merrill Lynch Investment Managers.
Cheers!
Dennis Ng - When You Master Your Finances, You Master Your Destiny
Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
Dennis Ng - When You Master Your Finances, You Master Your Destiny
Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.