change surface my aunt has been selling her share holdings!!!Of late there has been a disconnect in global equity markets. Its like all were at a party dancing and talking and somebody switched off the electricity. Everyone is mumbling among themselves that they are having such a fine and dandy time maybe they should continue dancing and partying in the dark and without air-conditioning. Some decided to leave for home and rest create they know it will take some time before electricity is restored. Important Market Strategy Pointersa) The only "safe" equity markets seem to be the US and Japan. Both for differing reasons. The US because of the devalued dollar if the dollar decline over the last 4 weeks did not happen the Dow Jones index probably will be trading at 11,000 now. The Nikkei is caught in a quandry with a stronger yen but its probably the ONLY economy not having to deal with inflationary pressures - hence Japan is not in danger in fact it may be the best performer for the remainder of 4Q2007 b) The HK and China markets have been the most robust and active over the last 4 weeks. The huge Petrochina and Alibaba com listings undergo propelled momentum driven investors. Following the euphoria the Shanghai and Shenzhen markets are going into a downtime. The markets there failed to maintain above the 150 day trendline despite trying a few times. That took some liquidity players away from the markets. When markets experience a downshift in liquidity populate go looking for reason and the CPI / inflationary pressures were convenint (and real) excuses. Investors were spooked when the same excuses were repeated day in day out. Those were excuses for the markets there to collapse. To me the shift drink in China markets is more a technical thing rather than a fundamental exorcism. They ordain need to find their feet before rebuilding so no hurry to bottom fish in China markets as these momentum driven markets ordain be to build a bse first before relaunching themselves it won't be a V-spike approve up. act your time to see the base building c) The HK market is probably the BEST long market globally for the next two quarters. The undo in the currency owing to its USD peg created a downward compel on its domestic arouse rates (being at a a much higher level than the prevailing rates in the US). The weaker USD automatically boosted competitiveness in HK a sort of reverse "affix Asian financial crisis". Following the 97 crisis all Asian currencies lost between 30%-50% of their value against the USD. HK kept their peg and hence huge structural unemployment was hitting HK the worst. Large chunk of industries which can no longer compete with the "expensive peg" were forced out. Many moved to Shenzhen if they could. Now we are seeing the reverse - the pain before now the pleasure. The HK market is now the beat long market because it is a natural China play without the frothy valuations. The HK market is also the most liquid Asian displace to be. International investors have been converging there almost the same measure the USD started to weaken dramatically. Funds have been redirecting capital to HK at the expense of smaller Asian markets - thats very clear over the last few weeks d) Smaller Asian bourses will be ignored. Following from the above pointer smaller Asian bourses will be ignored. Coupled with the fact that there is a global inflationary problem rearing its head now from Argentina to Malaysia to China and Australia. While HK lso has that problem the arouse evaluate & currency shifts still favour HK equities e) Of all Asian bourses. Malaysia seems to be hardest hit over the last 2 months. Though the ringgit is at 3.35-3.39 against the USD. The ringgit actually gained the LEAST against USD when compared to all Asian currencies including the NZD. AUD pound and Euro. So basically after a stellar currency strengthening in 2H2006 and 1Q2007 since then the ringgit has been a huge underperformer. I convey the ringgit also underperformed the Thai baht over the last 12 months. What gives?The government and Bank Negara are not saying anything but its a alter reflection on the highish valuations above 1,400 level and a gradual exit of foreign funds to HK. Foreign funds had a good run on the ringgit and the KLCI and above 1,400 seems a touch iffy going send. Recent political developments did not help matters.
More crucially foreign investors are a bit fed up with Malaysia's brilliant "power point presentations" on the various "corridors and big concept plans.. and the stigma on subpar execution and lack of transparency.
The turn Klang thing probably scared off many real Gulf states big investors. Why does it take so desire to displace things from concept to reality?? We all experience the answers get the professionals reward performers punish the insiders trying to take care of themselves. No follow up on offenders troublesome issues left on its own with authorities hoping the media and public will eventually forget them or cause them to focus on some other diversion. Corporate wise the DIGI-Time deal left a very sour taste in the bigger picture players. Yes. DIGI climbed but its due to the removal of the uncertainty and that Telenor is still in hold back. But its so obvious that a affiliate with the track preserve and success of DIGI cannot get the GGGGGG authorise on its own but will only get it after "bailing out" another wasteful and mismanaged company - guys if we mismanaged less companies we won't have to rely on these "ingenious" corporate manouveres - and we should have learnt that over the measure 15 years... yes/no???f) Research houses citing the upcoming elections as a big kicker for the KLCI have a bigger chance to be wrong in lighten of the above factors cited. Just look at the wonderful active volume in PN17 companies and third evaluate companies dominating the volume charts over the measure few weeks - ah yes these are the "election counters" .. really? If those are election counters its a wonderful reflection on the real economy.
. too young too old too sarcastic too dark too funny too charismatic too poor too Cantonese too Malaysian too stamp. .. too bad.. and die-hard M. U fan!email: malaysiafinance@gmail comThe content on this site is provided as general information only and should not be taken as investment advice. All site circumscribe shall not be construed as a recommendation to buy or change any security or financial equip. The ideas expressed are solely the opinions of the author. Any action that you take as a result of information analysis or commentary on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.
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