Tuesday, December 27, 2011

2012 - A Year Of Opportunities 危机

Change is the only constant but fear of changes still persist...危机

The US is in a quagmire, EU is rescheduling and forgiving debts and China is plotting a soft landing and managing an ever-vocal populace hit by perceived, or real, discrimination and an 'engineered' decline in property prices.

Singapore - being a small nation, cannot but be plugged into globalization.

Can anyone deny that CASH is king?

Euro-area banks parked 445.7 billion euros ($576.8 billion) with the Frankfurt-based ECB yesterday, up from 436.6 billion euros a day earlier. Deposits reached 452 billion euros on Dec. 27, the most since the euro’s introduction in 1999 - Bloomberg. Why? Simply because even the big boys cannot trust each other's credit standing!

Although US's unemployment is declining but, like in most countries, unemployment fatigue forces the unemployed and/or under-employed to opt out of dole, live on their reserves, accept part time contract or piecemeal work or simply fade away from the statistics. Q-on-Q growth are insignificant and not able nor wide enough to offer mass employment. With declining earnings, demand dries up.

Asia, especially China, may be the only sparks around. But, domestic demand cannot replace international trade, aka weakening global demand. Banks are bloated with governmental-link companies (GLCs) loans, properties and non-productive loans which could potentially result in explosive Non-performing loans (NPLs). Matters may get worse if property prices decline sharply (soft landing? unlikely) and social discontents surge - a lethal combination!

ASEAN as a whole is still filled with opportunities; post-flood reconstruction in Thailand, business resurrection and a more organized Philippines, Johor's Iskandar, opening up of IndoChina, a more stable Indonesia and repositioning of Brunei and Singapore.

A united Korea (not necessarily political) and an awakened Japan will provide abundant opportunities.

Whatever happens, smart money and hot money have to find safe havens.

The World has seen enough industrialization. Commodities, especially hard commoditieswill take a back seat.

Cyclically, its time to get back to basics. Food production and agri-business will shine and medical and medicine will be the new engine of growth. Gaming and gambling will revert to the norm after phenomenal growth as new centres are opened and Laws relaxed.

The misfortune of calamities have silver lining too; reconstruction arise. Major wars are unlikely but proxy wars seem inevitable.

2012 is about opportunities and timing.    

How well, or how bad, will stockmarkets perform going forward? The tricks to identifying winners may be industry-centric rather than the market as a whole.

Typically, stockmarket experiences a cyclical quarterly low in January (Capricon effects), April (post-results), July (mid-year portfolio realignment) & October (Jupiter dynamism)

May you prosper in 2012; please spare some money to the less able, underprivilege and the poor thereafter. 


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