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Investment Talk We're now living in a world of challenging global economy where changes take place at a rapid pace. Investment Talk offers concerned Malaysians the opportunity to express their opinion on the performance of our country's economy in various sectors -- market watch, property talk, money market and others like unit trusts, bonds, bonus, dividends etc.

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  #1  
Old 04-01-2011, 04:41 PM
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Default Malaysian market in 2011

Tuesday, 04 January 2011

KUALA LUMPUR: Credit Suisse Research remains positive on the outlook for the Malaysian stock as it expects the upward trend to be underpinned by liquidity and several factors including robust economic growth and also a stronger ringgit.

In a research note issued on Monday, Jan 3, it forecast that Malaysia’s 2010 and 2011 real GDP growth would remain robust at 7.5% and 5.2%, respectively.

“This should be a boost to domestic consumption (Genting, Axiata and AirAsia are Outperforms), the property sector (top buys are UEM Land and IJM Land) and Tenaga.

Credit Suisse Research said Malaysia, being a net exporter of commodities (palm oil, rubber, crude oil , should benefit from the high commodity prices/
“High palm oil and rubber prices should be a big boost to the rural economy. In 2010, palm oil and rubber prices have risen 47% on-year and 57% on-year, respectively,” it said.

As for the ringgit, its forex team expected the ringgit to appreciate further to RM2.93 within a 12-month period. The beneficiaries of a stronger ringgit are Tenaga Nasional, airlines (for example AirAsia) and Tan Chong.
It added that pump priming activities for the economy would benefit the CONSTRUCTION [registerQuotes("CONSTRUCTION", "CONSTRUCTION_span"); ] industry. It has OUTPERFORM ratings on Gamuda, IJM Corp and Sunway. The building material companies such as steel and cement will also benefit.

“We believe that the Economic Transformation Programme (ETP) will be a boost to the economy and FDIs. Key beneficiaries appear to be the construction and oil & gas sectors, with the banks being the indirect beneficiaries (top buys are CIMB and Public Bank),” it said.

On the bilateral front, the research house said warming ties between Malaysia and Singapore should encourage more cross-border investments from Singapore.
It expected UEM Land to be the direct play on better Singapore-Malaysia ties, while MMC Corp was also a good proxy as it was the second largest landowner in Johor and a joint venture partner to Gamuda for the KL MRT project.

“Interest rates in Malaysia continue to remain low,” it said, adding there would be one more hike of 25 basis points only towards the end of 2011. This should keep the property sector buoyant in Malaysia.
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Old 04-01-2011, 04:43 PM
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KUALA LUMPUR: Investors’ increasing risk appetite for equities pushed key regional markets higher on Tuesday, Jan 4, with the Malaysian market posting solid gains as the 30-stock FBM KLCI advanced into unchartered territory.
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Old 05-01-2011, 01:10 AM
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Hindenburg Omen signaling again in US market ( Be careful)

There was an interesting event Tuesday in the stock market – a Hindenburg Omen signal. With 179 new 52-week highs and 113 new 52-week lows on the New York Stock Exchange in a rising trend, the basic requirements were met. The question now is “does it mean anything?”

Let’s backtrack a bit to what a Hindenberg Omen means. Basically the idea is that large numbers of new highs and new lows at the same time indicates an unstable market. Its namesake, The Hindenburg, was a hydrogen-filled German airship that exploded in the air in 1937. The imagery for the stock market is clear.

Back to today. The new lows list was dominated by bond-like funds, ETFs and especially inverse ETFs–not stocks–so the great breadth divergence is clearly debatable. Depending on the source you used, the number of new lows in actual operating company stocks was rather low.

Do we count them all or not? And if so, does it change the meaning?


We have to go with the “no Hindenburg” crowd on this one. Additionally, Hindenburgs are supposed to cluster so one isolated signal is not really a true omen. Of course, they clustered in August and the stock market found a rather healthy bottom about a week later.

All the furor (if not panic) the signals generated back then, does go to show that what everyone knows is really not worth knowing.

But this does not mean we should ignore it either. The fact that so many bond-like instruments are tumbling can also mean liquidity is drying up and that is not good for stocks at some point. Lack of liquidity in 2008 was a major factor in the “slow motion crash” of December/January.

Bonds somehow seem to know better than stocks. The Hindenburg Omen may not be the holy grail the bears might like, but it still has plenty of street cred as a wake-up call.
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Old 05-01-2011, 02:55 PM
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FBMKLCI may rise above 1,781 in H1: UOB

Wednesday, January 05, 2011, 03.08 PM

Malaysia’s benchmark stock index may “stampede” beyond 1,781 in the first half of the year, bolstered by an inflow of foreign funds and rising expectations of an early general election, according to UOB Kay Hian Group.

A stronger ringgit, higher commodity prices and a “firm” economic outlook will also help boost the stock market, Vincent Khoo, an analyst at OUB Kay Hian said in a report today. Still, the market faces a “wild ride” as the upside potential may be “lassoed” in the second half of the year, bringing his target for the index to end at 1,654 by the end of the year, he said.

The FTSE Bursa Malaysia KLCI Index rose 0.4 per cent to 1,558.54 at 10:53 a.m., set for a record close. -- Bloomberg


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Old 05-01-2011, 03:06 PM
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Retailers in Malaysia surprised by good numbers

Retailers in Malaysia are pleasantly surprised by the good showing thus far and expect to finish 2010 by expanding 7.8 per cent that will translate into RM76.5 billion in total sales.






Although the 7.8 per cent growth forecast is the third upward revision, retailers nevertheless remain cautious of 2011 performance and expect retail sales to improve by 5 per cent.

This is in line with the lower economic growth next year, concerns over a property bubble and high household debt.

Retail sales are tabulated by Retail Group Malaysia (RGM) on behalf of Malaysia Retailers Association (MRA). It takes into account all sales within the country except big tickets items like houses and cars.

In the first nine months of the year, the retail industry rose by 8.7 per cent compared from a year ago, RGM data released yesterday showed.



While the strongest quarterly growth was in the July to September 2010 period at 9.8 per cent, profit margin of retailers grew by only 4.2 per cent as retailers were still depending on heavy discounts and frequent promotions to get consumers to buy.

"In other words, consumers are still price-sensitive and they respond strongly to sales and promotions," RGM managing director Tan Hai Hsin said.


BT

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Old 05-01-2011, 03:11 PM
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CPO futures end firmer

Published: 2011/01/05
CPO FUTURES

CRUDE palm oil (CPO) futures prices on Bursa Malaysia Derivatives closed on a firm note yesterday with the prices touching 33-month high, dealers said.

They attributed the bullish market to shrinking supplies as production continued to fall due to disruption in harvests in Indonesia and Malaysia.

On the futures market, January 2011 rose RM22 to end at RM3,907 a tonne, February 2011 added RM40 to RM3,913, March 2011 rose RM36 to RM3,888 and April 2010 was RM29 higher at RM3,863.


Turnover fell to 3,797 lots from 14,768 on Monday while open interest fell to 87,668 contracts from 88,544 previously.

On the physical market, January South rose to RM3,900 from RM3,860 previously.

RUBBER

RUBBER prices closed at a record high yesterday supported by limited supply and strong demand from tyre makers, dealers said.

The Malaysian Rubber Board’s official physical seller price for tyre-grade SMR 20 was up eight sen to 1,514 sen a kg, a level unseen since December 24 last year. Latex-in-bulk was also 2 sen higher at 988 sen.

The unofficial seller closing price for tyre-grade SMR 20 increased 10.5 sen to 1,519 sen , while, latex-in-bulk went up 3.5 sen to 990 sen.

TIN

TIN price on the Kuala Lumpur Tin Market (KLTM) was unchanged at US$26,800 (US$1.00 = RM3.06) per tonne at close yesterday, a dealer said.

Trading was light amid a lack of fresh leads as the London Metal Exchange (LME) was closed on Monday, the dealer said.

On the KLTM, the turnover increased to 60 tonnes from Monday's 40 tonnes with the participation of Japanese, European and local traders.

At the opening bell, buyers bid for 60 tonnes while sellers offered 65 tonnes. The price differential between the KLTM and the LME was also unchanged at US$285 per tonne. - Bernama

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Old 05-01-2011, 03:18 PM
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KUALA LUMPUR: Business owners are upbeat on the outlook for 2011 and most of them expect an increase in revenue while nearly half of them see an increase in profitability, according to a Grant Thornton survey.

The findings of the International Business Report (IBR) issued on Wednesday, Jan 5 said 68% business owners indicated they foresee an increase in revenue and 45% an increase on profitability for the year ahead.

“In terms of investment, 51% businesses are expecting to increase investments in plant and machinery and also 18% in new building while 32% expect to increase their R&D,” it said.

The survey also showed businesses in Malaysia remained positive about the outlook of the Malaysian economy for the year 2011.

Grant Thornton said the results of the International Business Report (IBR) -- a survey of over 11,000 businesses per year across 30 economies -- have shown that a balance of +50% of Medium to Large Enterprises (MLEs) in Malaysia are optimistic for the year ahead as compared to a balance of +49% the year before.

This is the highest recorded optimism level for Malaysia since its participation in IBR, according to Grant Thornton.

Edge
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Old 06-01-2011, 03:54 PM
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http://time.deposits.org/

Compare the interest rates offer around the world.



A Time Deposit requires the placement of cash in a savings account at a fixed rate of interest for a certain term or time period. Funds generally cannot be withdrawn from a Time Deposit prior to the end of its term without incurring a penalty.
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Old 07-01-2011, 11:09 AM
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The financial media has for the most part finished their presentations of expert forecasts for the coming year. And as you’ve probably gathered, most of the strategists from the major Wall Street houses expect a continuation of the bull market that started in March 2009.

Other sentiment indicators show the same picture of exuberance and outright bullishness.

These include:

* Individual investors as measured by the American Association of Individual Investors,
* Advisors as measured by Investors Intelligence,
* Mutual fund managers as measured by the average mutual fund cash quote, and
* Speculators as measured by put/call ratios.

Financial market history teaches that so much agreement is unusual and dangerous. Whenever there is unanimity in relation to market forecasts it usually pays to become a contrarian, which is what I recommend now. But not just because of all this unanimity.

There are …

Seven Additional Reasons to Expect a Bear Market in 2011

First of all, the stock market is highly overvalued. It follows then that stock investments are nearly guaranteed to deliver poor, long-term returns.

Second, the rally since August 2010 isn’t based on sound and sustainable economic factors, but on unsound and fragile faith in the Fed’s ability to inflate asset prices.

Third, longer term interest rates have risen considerably since the Fed’s first announcement of QE2. In the past, bull markets were usually on borrowed time during a rising yield environment — even when fundamentals were much sounder than today.

History tells us we're in for a bear market this year.

Fourth, stocks are extremely overbought when momentum indicators and the number of stocks reaching new 52-week highs stay below their cyclical highs, thereby not confirming the current run up.

Fifth, there is a debt crisis brewing, not just in Europe, but also in Japan and the U.S. The U.S. municipal bond market is already under pressure.

Sixth, the financial sector’s problems have not been solved, but only papered over with money printing and a suspension of mark-to-market (fair-value) disclosure.

Seventh, in China a huge bubble economy has developed. Since Beijing has already implemented a turn in monetary policy, this bubble is prone to pop in 2011, posing a major threat for a still very fragile global economy.

All of this makes for a very poor risk/reward relationship. Yes, the stock market could race higher — as it did in 1999 for example. But based on the excessive exuberance, plus the other seven reasons I’ve given you, I wouldn’t bet on that unlikely outcome.

And if you’d like to profit from market declines, you might consider an inverse exchange traded fund, such as ProShares Short S&P 500 (NYSE:SH).


Written By Claus Vogt From Money And Markets
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Old 07-01-2011, 11:23 AM
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Monetary Policy, Bubbles, and Goldilocks

Source: http://research.stlouisfed.org/publications/mt/20110101/mtpub.pdf

Emerging signs of stronger economic activity and the
Federal Open Market Committee (FOMC)’s second
round of quantitative easing (QE2) have raised concern
among some analysts that expansionary policy might
be causing bubbles in financial and commodity markets—
bubbles that might harm the economy if they burst.

Prices
for bonds, equities, and commodities have increased sharply
since late August: The Reuters Jefferies/CRB weekly futures
commodity price index increased by 22 percent (in U.S.
dollars) through the week of November 9 (but fell sharply
the following week), oil prices by 22 percent, the Economist
food-price index by 20 percent, the Russell 2000 Index by
22 percent, and the broader S&P 500 Index by 15 percent.

Given these increases, the concern over bubbles is reasonable,
but it is difficult to distinguish beforehand the line between
aggressive (“just right”) monetary policy and overly aggressive
(“too hot”) monetary policy that generates bubbles.

Rapid increases in commodity and financial market prices
by themselves, however, are not reliable indicators of potential
bubbles because such increases also occur as part of
normal monetary policy.

How exactly does policy operate
in normal times when the federal funds rate is well above
zero? The path begins with a reduction in the target rate,
continues with changes in longer-term interest rates, and is
followed by increases in real economic activity.

1 Disappointingly
low returns on short-term, low-risk investments prompt
investors to move to longer-term, higher-risk investments in
financial instruments, commodities, and durable goods.

In turn, bond and equity prices rise, decreasing corporate borrowing
costs and increasing household wealth. There also is
a price effect: Broad expectations of higher prices for goods
and services in future periods induce firms and households
to spend money now rather than later. And there are lags:

Increasing the production of residential and nonresidential
durable goods (including structures and durable equipment)
takes time. During this “time to build,”

2 both the size and duration of the difference between the contemporaneous prices of financial and real assets and their long-run values are larger, ceteris paribus, when monetary policy is more
aggressively expansionary and increases in aggregate demand
are stubbornly slow.

Eventually, as the economy rejoins its
balanced growth path, bond prices fall (yields increase) as
real interest rates and expected inflation increase.

Commodity price movements are more complex and involve
several factors. One factor is the potential success of expansionary
monetary policy: If economic activity expands, demand for
commodities likely will increase, pushing futures prices upward,
which, in turn, tends to increase current-period prices.

Further, some analysts have suggested the expansion of hedge funds and
similar investments over the past decade may have increased the
speed and volatility of commodity price changes.

3 A second factor is the decreased foreign exchange value of the dollar as
a result of aggressive monetary policy. Because most commodities
are freely traded in international markets, commodity prices
in U.S. dollars tend to increase as the dollar’s value against
other currencies falls. As James Hamilton discussed in his blog
on November 10, 2010, recent data show that changes in the
U.S. dollar price of oil closely approximate changes in the dollar’s
exchange value against our trading partners.

4 As long as the FOMC’s pursuit of highly expansionary policy
continues, households and businesses remain pessimistic, and
demand is sluggish, the potential exists for asset prices to deviate
from their long-run levels by large amounts and for long
periods.
Such increases per se are not bubbles but a commonplace
reaction of the monetary transmission mechanism. Yet,
monitoring of prices is essential lest future adjustments be misunderstood
by the public as part of the dynamics of aggressive
monetary policy. Whether bubbles have been generated remains
to be seen.


—Richard G. Anderson[/u]
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