If you have not invested, you would have missed a good run.
July has been an exciting month. London was bombed twiced; Singapore adjusted the property purchase rules; China and Malaysia adjusted their currency pegs. Oil prices retreated to highs 50. How do all these events affect the investment climate? Let us take a short examination:
Terrorism in London: World stock markets are relatively unaffected by the London bombing. Even though European Equities fell by 1-3% on 7 July, most recovered by the end of the day. It seems that financial markets have factored in the threat of terrorism and the impact of a terrorist attack on financial market becomes smaller as investors become used to such events. This bodes well for investors as their portfolio will be less affected in case of a terrorist attack.
Changes in Property Ruling: The much undervalued property shares in Singapore finally came into the limelight after the government decided to amend the rulings on housing loans and the use of CPF for property purchases. Property shares soared 8% in that week and some of the counters have appreciated by 20% at the date of writing. As a result, the Singapore Index (STI) appreciated and reached a new high. Investors who are invested in Singapore blue chip stocks benefited greatly from the ruling.
The Revaluation of RMB and Ringgit: China announced a revaluation of the Chinese Yuan and allowed RMB to trade within a narrow range. Malaysia reacted and immediately imposed the same rules. This created an appreciation in the value of Asian currency and foreign funds flowed into Asia to take advantage of the rising Asian currencies. Asian equities will be the main benefit of such changes.
Generally, we have catched a good timing for redirecting funds to Asian equities during May and June. The outlook for world ecnomies is still optimistic, especially Asia. Another consideration is that analyst expected US to stop rising interest rates soon. A stagnant or falling interest rate is favorable to the equities market. We may see a further run in the market in the future at the end of the year. The best is yet to come. Stay invested.
July has been an exciting month. London was bombed twiced; Singapore adjusted the property purchase rules; China and Malaysia adjusted their currency pegs. Oil prices retreated to highs 50. How do all these events affect the investment climate? Let us take a short examination:
Terrorism in London: World stock markets are relatively unaffected by the London bombing. Even though European Equities fell by 1-3% on 7 July, most recovered by the end of the day. It seems that financial markets have factored in the threat of terrorism and the impact of a terrorist attack on financial market becomes smaller as investors become used to such events. This bodes well for investors as their portfolio will be less affected in case of a terrorist attack.
Changes in Property Ruling: The much undervalued property shares in Singapore finally came into the limelight after the government decided to amend the rulings on housing loans and the use of CPF for property purchases. Property shares soared 8% in that week and some of the counters have appreciated by 20% at the date of writing. As a result, the Singapore Index (STI) appreciated and reached a new high. Investors who are invested in Singapore blue chip stocks benefited greatly from the ruling.
The Revaluation of RMB and Ringgit: China announced a revaluation of the Chinese Yuan and allowed RMB to trade within a narrow range. Malaysia reacted and immediately imposed the same rules. This created an appreciation in the value of Asian currency and foreign funds flowed into Asia to take advantage of the rising Asian currencies. Asian equities will be the main benefit of such changes.
Generally, we have catched a good timing for redirecting funds to Asian equities during May and June. The outlook for world ecnomies is still optimistic, especially Asia. Another consideration is that analyst expected US to stop rising interest rates soon. A stagnant or falling interest rate is favorable to the equities market. We may see a further run in the market in the future at the end of the year. The best is yet to come. Stay invested.
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