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Showing posts from March, 2009

Analysts say outlook for Singapore's stock market poor

By Ng Baoying, Channel NewsAsia | Posted: 31 March 2009 1952 hrs

SINGAPORE : Singapore's benchmark stock index, the Straits Times Index (STI), ended the first quarter this year down 3.5 per cent. The STI closed at 1,699.99 on Tuesday.

However, that is a recovery of 16 per cent over the six-year-low seen in the early part of this month.

Nevertheless, analysts have said the rally is not sustainable and expect a bumpy year ahead for the index.

Most analysts said the recent uptick in the local bourse is unsustainable in the year ahead.

Kevin Scully, executive chairman, NRA Capital, said: "The market is being a bit premature in assuming the worst is over. We will continue to see downgrades in global growth, trade. And I think corporate earnings guidance for first quarter, probably in mid-April, will be quite negative. And that will show that the rally is not supportable."

Looking ahead, analysts said defensive plays like utilities, telcos and transport counters are good bets.…

OECD says govt policies will avert Depression

OECD cautiously predicts 'policy-induced' global recovery next year as stimulus spending flows

Emma Vandore, AP Business Writer

PARIS (AP) -- Haunted perhaps by the ghost of Herbert Hoover, global leaders have steered the world away from a 1930s-style Great Depression by a "very, very, high level of awareness" of the policy errors of his era, a top international economist said as he released an OECD study of efforts to save the world economy.

Klaus Schmidt-Hebbel, chief economist for the Organization for Economic Cooperation and Development, spoke to The Associated Press as he slashed forecasts for growth in the 30 rich countries that make up its membership, predicting the economies of the OECD countries will shrink by 4.3 percent this year, and by 0.1 percent next year.

The new forecasts released Tuesday compare with a November forecast that the OECD economy would shrink by 0.4 percent this year and grow by 1.5 percent in 2010.

It would have been worse without governme…

George Yeo, the man who respects us all enough, not to hurt our brain.

The Great Repricing

Madam Pro-Vice Chancellor, Kate Pretty, my old tutor, Professor Navaratnam, dear friends, ladies and gentlemen, it may seem inauspicious that Cambridge should be celebrating its 800th Anniversary at a time when the world is heading into a deep recession the likes of which have not been seen for a long time. From the perspective of Cambridge’s long history, however, this sharp economic downturn is but another discontinuity in the affairs of man of which the University has seen many and participated in not a few. Whether this crisis marks a major break in world history we don’t know yet. Turning points are only seen for what they are in hindsight.

What is becoming clearer is the severity of the crisis. No one is sure where the bottom is or how long this crisis will last. In the meantime, tens of thousands of companies will go bankrupt and tens of millions of people will lose their jobs ─ at least. What started as a financial crisis has become a full-blown economic cri…

Commentary by Kathy Lien: Leaked Draft of G20 Communique is Dollar Bullish

One of the biggest event risks this week for the foreign exchange market is the G20 meeting held on April 2nd in London. Unfortunately even before the start of the meeting, it is proving to be a big disappointment. The Financial Times has gotten its hands on a draft of the communique or "statement" that the leaders of the world's 20 largest economies will release on Thursday. The communique mentioned nothing about currencies in contrast to all of the hype about a global reserve currency last week and no fresh announcement about a new fiscal stimulus. This of course is just a draft and many changes could be made at the meeting but on a day when the market is worried about a GM or Chrysler bankruptcy, the failure to provide any specific financial commitment to boosting the global economy has been a huge disappointment. The dollar's rally reflects the increased pessimism and relief that a global reserve currency to replace the greenback was not mentioned at the meeti…

OECD: Jobless may near 10%

ROME - UNEMPLOYMENT may near 10 per cent in the member states of Organisation of Economic Cooperation and Development except Japan by 2010, the OECD said in a paper released on Sunday.

'By the end of 2010, the unemployment rates could be approaching a double-digit figure in all G8 countries with the sole exception of Japan, as well as in the OECD area as a whole,' the OECD said in a background paper for a labour ministers' meeting in Rome.

'If these projections were to materialise, the number of unemployed people in the OECD area would have risen in the three years to 2010 by an amount even larger than that observed ... over the ten-year period to the early 1980s, which included the two oil shocks,' the document said.

'Historical experience suggests that it can take a long time to overcome such large increases in unemployment,' the paper said.

'Indeed, some G-8 countries never got back to the pre-crisis unemployment lows,' it added. While the paper was …

First signs of recovery

After several long wintry months of economic gloom, the first green shoots of a possible recovery have finally emerged in recent weeks.

Stock markets are rallying around the world, home sales rose unexpectedly in United States and Singapore last month, and exports and manufacturing data appear to be stabilising in a number of economies, including in Singapore.


But does this mean the worst is over?

Some economists warn that the improved data is just a temporary blip before another downward dip, as in a 'W-shaped' recession. Others say it may have reached the bottom but with no glimmer of a recovery ahead, as in an 'L-shaped' path.

Still, there is some reason to cheer, at least for now. Leading indicators seem to point to a bottoming out in the world's most severe recession since the 1930s. US Treasury Secretary Timothy Geithner has unveiled a bank rescue plan that appears to have been well-received by markets. Whether this will lead to a true recovery remains to be …

Unrest looms in Asia-Pacific amid financial crisis

Asia and the Pacific face a "marked risk" of social unrest as the global financial crisis bites, but the region continues to lead international prospects for recovery, a UN survey said Thursday. The annual survey said that the region faces multiple layers of crisis ranging from financial breakdown, food and fuel price instability and climate change that could have wide-ranging effects throughout 2009. There was "fresh evidence mounting that the worst has yet to come," with a big slump in trade, the region's engine of growth, according to the Economic and Social Survey of Asia and the Pacific 2009. "There is a marked risk that the financial crisis could converge on itself in a downward spiral of deepening recession, social unrest and political instability," said the survey. A key trigger for unrest was that millions of Asian migrants are returning to their rural homes in search of work after losing jobs in the crisis-hit export sector, UN Undersecretar…

4 Skills Every Trader Should Master

Austin Passamonte

Austin Passamonte is a full-time professional trader who specializes in E-mini stock index futures and commodity markets. Mr. Passamonte's trading approach uses proprietary chart patterns found on an intraday basis. Austin trades privately in the Finger Lakes region of New York. Go to CoiledMarkets.com to visit CoiledMarkets.

The mental (emotional) aspect of trading is hands down the toughest hurdle between aspiring traders and consistent success. For sure our technical nuts & bolts portion is vital. It goes without saying that we need some type of method, system or approach for trade entry, management and exit parameters that create a defined edge. The truth is there are countless ways to create such a viable "edge" over the long-term, but human management of such is the weakest link in that chain.

Out there in the real world we are taught to set tangible goals. Timelines, limits, targets and objectives are all part of the path to success. Need a road…

Should You Forgive Your Fund?

By Michael Breen

The late John Templeton was a patient investor who kept his head while others lost theirs. He didn't let near-term events push him off course. When times were bleakest, he'd produce a chart showing all the bull and bear markets back through the Great Depression. FAM Funds recently gave me an updated version of that chart, and it still makes its point: Bear markets are followed by bull markets that tend to be longer in duration and greater in appreciation. But looking backward from deep inside a bear market, it can be hard to foresee better things for stocks.

Now is such a time. We've blown through the losses of the 1974 bear market and the tech-inspired downturn of the early 2000s. The S&P 500 Index has lost an average of 2.5% annually over the trailing 10 years--its worst run since the 1930s. Stocks have shown signs of life lately but have a long way to go before they crawl out of the hole they're in.

Mind the Midstream Changes
In such an environment,…

How NOT to Get Your Kid Into Harvard

by Hana R. Alberts

If you are looking to get your offspring into Harvard or any other elite school, here are several ways to NOT do it.

No Intellectual Podcasts

Beaming podcasts about Foucault, Tolstoy or Heidegger into the womb will not increase your child's intellectual capacity. In fact, he (or she) will probably be so scarred by the polysyllabic words that he won't talk until the age of 5.

Skip the Emblazoned Clothing

You think wearing paraphernalia emblazoned with the Harvard crest makes your child look cool? Think again or, better still, visit Harvard Square. Only townies sport logo-laden gear. Harvard students wouldn't be caught dead in it (except maybe band members).

No Payoffs

Some parents mistakenly believe that paying their children to read, or awarding cash for the number of A's on their report cards, will make them love learning, not to mention history, literature and philosophy. Nah. It will only make them love one thing: money.

Bank Bound

That love of money, in t…

The Street - Kass: Why the Bears Are Wrong

Doug Kass:

On Feb. 17, I presented a watch list of conditions that, if in an improving trend, would likely indicate that a sustainable up move is possible for equities.

It is time to review this checklist (and add one more factor) to determine the market's standing. Our new grades and those of two weeks ago are in parentheses and will be updated in the weeks and months ahead.

* Bank balance sheets must be recapitalized. Yesterday a comprehensive bank rescue package was introduced. It is obviously too early to consider its full impact, but the details of the program suggest to this observer that it will likely be effective in clearing toxic bank assets. (We grade the package a B+, up from a D+ only two weeks ago.)

* Bank lending must be restored. While bank lending standards remain tight, my view is that yesterday's announcement of ring-fencing toxic bank assets will almost unquestionably succeed in unclogging the transmission of credit. (Grade B, up from a C previously.)

* Financia…

World trade growth 'to plummet 9% in 2009'

GENEVA (AFP) - - World trade volumes are expected to drop by an average of nine percent in 2009, the sharpest fall since World War II, the World Trade Organisation said Monday.

But the WTO said in its latest forecast for global trade flows that data from key Asian traders like China last month suggested that the worst of the global trade decline may be over soon.

"The collapse in global demand brought on by the biggest economic downturn in decades will drive exports down by roughly nine percent in volume terms in 2009, the biggest such contraction since the Second World War," the forecast said.

Trading volumes of the developed economies should contract 10 percent this year, while trade in developing economies should slip 2 to 3 percent.

Despite the dismal projections for the full year, the WTO pointed out that import data for China, Singapore, Taiwan and Vietnam turned positive in February following successive months of decline.

China posted an increase of 17 percent in imports c…

Bull run? Yes, but...

Markets have bottomed out but spectacular gains unlikely: Analysts

By Yang Huiwen

WHAT a difference a few weeks make.
Earlier this month, as bourses almost everywhere continued to spiral downwards, it seemed almost unthinkable that a major rally was just around the corner.

RELATED LINKS
UPWARD TREND
Some markets including Singapore took a breather yesterday, but nevertheless the recent run-ups are striking.

The most closely watched barometer of all, the Dow Jones Industrial Average in New York, has gained 17 per cent since its March 9 closing low.

Asian markets are also up 15 to 20 per cent from their early March lows. The Straits Times Index (STI), for instance, is up 16.1 per cent since March 9.

All this stock market cheer is prompting a nervous thought: Is the worst for stock markets really over?

Crystal ball-gazing is a business fraught with uncertainty but some analysts are willing to cautiously suggest the answer might be yes.

They say optimism started pouring into markets afte…

Signs of US revival

WASHINGTON - NEW orders for long-lasting US-made goods rose in February for the first time in seven months and new home sales rebounded, government data showed on Wednesday, suggesting the economic downturn might be easing a bit.
The Commerce Department said durable goods orders rose 3.4 per cent to US$165.6 billion (S$249 billion) in February, the biggest gain since December 2007, after a 7.3 per cent drop the prior month. Sales of newly built US single-family homes rose at their fastest pace in 10 months in February, it said in another report.

US stocks rallied on the data, with the Dow Jones industrial average ending 89.84 points higher at 7,749.81 and the S&P 500 closing up 7.76 at 813.88.

The upbeat economic reports and tepid demand in a record-large auction of five-year US Treasury notes sent benchmark government bond yields, which move inversely to prices, rising to their highest in a week.

Recent data, including retail sales and housing, have pointed to some signs of a mod…

Obama rejects China's call for new global currency

WASHINGTON (AFP) — US President Barack Obama has defended the dollar as "extraordinarily strong" and rejected China's call for a new global currency as an alternative to the dollar.

He said investors considered the United States "the strongest economy in the world with the most stable political system in the world" even as it was reeling from a prolonged recession stemming from financial turmoil.

People's Bank of China Governor Zhou Xiaochuan had called for a replacement of the dollar, installed as the reserve currency after World War II, with a different standard run by the International Monetary Fund.

"As far as confidence in the US economy or the dollar, I would just point out that the dollar is extraordinarily strong right now," Obama told a White House press conference on Tuesday.

He said that although the United States was "going through a rough patch" at present, it enjoyed a "great deal of confidence" from investors.

&q…

'S'pore Madoff' cons investors of nearly $900,000

By Elysa Chen

HE could well be Singapore's Bernard Madoff, give or take billions of dollars.

Yugoslavian national Stefanovic Nenad, 34, used a Ponzi scheme to cheat his victims here of more than $880,000 over two years.

It was a scheme similar to Madoff's, though on a much smaller scale. Madoff pleaded guilty to a $100 billion fraud in the US and was hauled to jail to await sentencing.

Nenad, a derivatives trader, approached his victims promising returns as high as 30 per cent within a year.

He told them he had an account with brokerage Fimat Singapore, through which he would invest. Fimat Singapore is part of the Fimat Group of companies owned by French bank Societe Generale.

Nenad lied that he would invest their money using his account and pay them the promised returns.

Nenad used the money to cover his personal expenses and to repay earlier victims whom he had cheated the same way.

$50,000 cheque

One of his victims, Singapore permanent resident Skinner David Hamilton, 41, wrote him …

Spare us the dinner-time economics lecture, dad

By Bryan Toh

THERE is a new dish during dinner time at my home: Economic Recession.

It has become a daily staple and comes in a variety of flavours. Some days it is sprinkled with hints of Credit Crunch, other days it is dressed with Job Loss.

The recent recession has not left anyone untouched, including my parents, who feel its impact on their spending habits and at their workplace.

They want to ensure I also feel their pain - albeit in a different manner.

What used to be a time when my family would come together, talk and laugh about our day has become somewhat of an economics lecture.

Most of the lecturing comes from my dad. Each day, he reminds us of the difficulties he and my mum are facing, how we should be helping them more, and laments that the stock market is not going his way.

Like any good lecturer, he also insists on restating what he has taught - in fact, up to two or three times. Because he does not like to be interrupted, we cannot tell him that we are, in fact, bored.

From his…

I will survive - as my parents did

By Eef Gerard Van Emmerik

MY PARENTS' tales of their early struggles have stayed with me.

As baby boomers, they and the majority of their peers had to toil hard to rise up their career ladders - without university degrees. They knew tough times and enabled their children - those of my generation - to stand on their shoulders.

They gave me the choice to pursue law, which I saw as a safe bet. After all, lawyers always make up part of society's upper-middle class; even when they do not make tons of money, most enjoy a relatively comfortable life.

Now here I am, staring at a downturn far worse than all others, in which so much global wealth has been wiped out that we may as well be starting from scratch.

The end is a long way off, too - up to 10 years, if sombre forecasters are to be believed. This, in spite of lawmakers being hard at work to contain the damage.

Though I am still four years from completing university and joining the labour market, I must admit I am finding it hard to &#…

Top five tips for managing your career in a downturn

1. Communication skills: Strong communication and interpersonal skills are essential, including the ability to work closely with a variety of stakeholders within, and outside, your department.

2. Technology expertise: It’s critical to stay up-to-date on the latest technological innovations. Being able to maximise the use of new technology not only makes your job easier but also increases your value to a potential employer. If you need to learn how to make best use of a new application, consider taking a computer or software class through a college or university programme, or participate in a local software users’ group for the product you would like to learn more about.

3. Global perspective: There’s a strong demand for certain professionals (such as accountants and IT specialists) with international business skills. Indeed, organisations are seeking professionals who are not only familiar with global trends, but possess an understanding of practices in other countries. For example, i…

Signs of economic progress

WASHINGTON - US President Barack Obama on Tuesday told his crisis-weary nation he sees signs of economic progress but pleaded for time to navigate out of the worst financial maelstrom in decades.

Mr Obama used a prime-time news conference to tout his US$3.6-trillion (S$5.44 trillion) budget as the key to national recovery, during an intense week of economic and foreign policy rollouts ahead of his first big trip abroad next week.

The president said his government, in its first two hectic months in office, had framed a comprehensive strategy to attack the crisis on 'all fronts'. 'It's a strategy to create jobs, to help responsible homeowners, to restart lending, and to grow our economy over the long term. And we are beginning to see signs of progress.

'We'll recover from this recession, but it will take time, it will take patience,' Obama said at his second full-blown press conference.

The president said his budget, which opposition Republicans argue will ru…

Bottoming out soon?

THE Singapore economy could reach a bottom within the next six months, Finance Minister Tharman Shanmugaratnam said at the Singapore Business Awards (SBA) on Tuesday.

'On current indications, we expect to see a bottom in the economy within the next two quarters,' he told business leaders at the Shangri-La Hotel.

'But growth thereafter is likely to remain weak till at least the end of the year, and possibly 2010 as well if there are no clear signs of recovery in the global economy,' said Mr Tharman.

Although the downturn is likely to be 'our deepest recession', he is confident that Singapore can weather the storm, even if it lasts for some time.

'We will emerge from this crisis fitter and stronger, as we have done before.'

The Government will also do its part to help businesses by reducing administrative speed-bumps and removing regulatory roadblocks wherever possible.

He cited an initiative introduced last April allowing firms to file just one full set …

Worst may be over soon

THE worst of the economic crisis may soon be over, according to an economist from the Nanyang Technological University (NTU).

Drawing from selected leading indicators that appear be to signalling a turning point, Assistant Professor Choy Keen Meng predicts that Singapore's recession will bottom out in the current first quarter and turn the corner by year's end.

He expects the economy to shrink by 4 per cent this year, a forecast that is more optimistic than most.

Although the official projection is for a contraction of between 2 per cent and 5 per cent, some private sector economists have predicted a decline as severe as 10 per cent.

'The leading indicators suggest that the worst will be in the first quarter and we will see improvements in the second and third quarters,' Prof Choy said during a presentation on the economic outlook at NTU yesterday.

One of these key indicators is the United States' purchasing managers' index, which rebounded in January and last …