Global market update!

[Valuegrowth]

Finally DOW passed 18,000 for the first time.

http://www.bloomberg.com/news/2014-1...ps-18-000.html

2014 Headwinds No Match for Blue Chips as Dow Tops 18,000

Rise of USD is likely to accelerate in 2015 and 2016 as well. On the other hand currencies such as AUD, CAD and NZD will depreciate against USD and emerging currencies in 2015 and 2016. US stock market and other developed markets may have strong pullback or correction in 2015. There will be volatility in both stock and commodity market. Best places to park money in 2015 are less appreciated markets, assets, emerging sectors, currencies, assets, commodity and stocks. Consumer staples, emerging commodity stocks, currencies and selected consumer discretionary stocks should outperform the market in 2015 and 2016. China and India is likely to drive the Asian region to particularly strong growth. Selected Asian frontier and emerging markets are poised to outperform in 2015. Their currencies also should stay strong especially against commodity currencies such as NZD, AUD and CAD.

Have a great Christmas and Happy New year 2015!

My ideas are not a recommendation to either buy or sell any security, commodity or currency. Please do your own research prior to making any investment decisions.

[Valuegrowth]

http://marketrealist.com/2015/02/must-know...diversifiers-3/

Why Frontier Markets Are Good Diversifiers

[Valuegrowth]

http://www.fa-mag.com/news/leapfrogging-to...tier-21097.html

Leapfrogging To Asia's New Frontier

[kiora]

From Twiggs money report.Setting up for a fall
Asia

A monthly chart shows the extent of the Shanghai Composite's exponential rise. Rising 13-week Twiggs Money Flow indicates buying pressure. Skyrocketing margin lending does not indicate a reversal, but does warn of fragility.

[Valuegrowth]

There will be further easing in interest rates globally. In addition to New Zealand, the Bank of Korea lowered its key interest rate to an unprecedented low. I believe NZD could hit US50c by the end of this year it could reach US40C in 2016 and 2017. Overvalued Auckland property market should drop at least by 25% to 40% by 2016. It should start its bear journey from the second half of this year. Sooner Auckland housing market has correction it is better. Otherwise there could be Auckland housing market crash and banking crisis in New Zealand. Finally Lower NZD will give some life to the export sector.

http://www.nzherald.co.nz/business/news/ar...jectid=11463661

NZD tipped to hit US60c this year

http://www.wsj.com/articles/new-zealand-ce...sing-1433971740

New Zealand Central Bank Cuts Key Interest Rate, Signals More Easing

Among stocks markets frontier markets have more value.Stocks in many emerging markets are undervalued now. Sri-Lanka is top attractive frontier market in Asia now.

Emerging and frontier market countries contain some of the most vibrant and fastest-growing economies in the world. Central European emerging markets and Turkey could benefit from economic recovery in the eurozone.

If we see less tensiosn over Ukraine, investor attention should focus on the attractive valuations available in the Russian market.

My ideas are not a recommendation to either buy or sell any security, commodity,property or currency. Please do your own research prior to making any investment decisions. Please note that I do not endorse or take responsibility for material in the above hyper-linked sites.

[Valuegrowth]

It is high time to diversify investment and other businesses among basket of regions including frontier markets.

Every situation is an opportunity for intelligent investors. When market players are in buoyant mood they think this time is different. No it is not. Every asset has its own short term and long term cycles. Few years back USD stayed very low for a considerable period not only against high flying currencies such as NZD and AUD but also against frontier market currencies. Now it is other way. Those currencies such as AUD, NZD and CAD which appreciated rapidly against USD and frontier market currencies during last five years are depreciating against USD and frontier market currencies now. Lately emerging currencies such as Indian rupee and South African currencies had some sell off. India rupee had settle down somewhat. South Asia is more stable than other Asian regions.

Out of all currencies frontier market currencies are less vulnerable to any hiccup. They always traded very low against hard currencies and emerging currencies. On top of that, time to time they were devaluating their currencies against USD.

This is the time to diversify and identify undervalued markets and other undervalued assets including under valued currencies and emerging commodities.

Those who advised others to dumb USD will have to think twice now. By 2017/18 USD should become very strong. GOLD will crush further. Higher USD also will benefit some sectors in other countries. Higher USD means more demand for good and services as well.

http://www.investmentweek.co.uk/investment...rontier-markets

How new political regimes are helping Asia’s frontier markets

Michael Levy, investment manager, EMEA and global frontier markets equity team at Barings, looks at companies set to outperform on the back of new and more focused political regimes
.
While the performance of emerging markets over the past few years has been weak, frontier markets have been relatively more robust, particularly in Asia. This is not to say they have become impermeable to volatility: frontier market equities have come under pressure recently due to the plunging oil price – particularly in oil exporting markets such as Nigeria and Kazakhstan.

The companies which are likely to deliver the most attractive long-term returns are well-managed, and the potential for strong earnings growth for multiple years can be seen.

But in recent months, a strengthening political background in many frontier markets has become a key indicator of the continuing rise of the asset class into the investment mainstream.

In Asia, an example of the democratic process functioning well in a frontier economy was seen in Sri Lanka, which elected and installed a new president in January. The New Democratic Front – led by Maithripala Sirisena was declared the winner after receiving 50% of the votes. Meanwhile, Middle Eastern markets posted mixed returns of late, Saudi Arabia performed strongly despite the passing of King Abdullah in January – helped by the fact that his successor, King Salman, set out a clear roadmap for future succession.

While they will not be totally immune to significant developments in the global economy, frontier markets are expected to continue to be primarily driven by domestic issues.

Indeed, they do have a lower correlation with developed markets than their emerging counterparts – just 0.49 compared to 0.84. This means frontier markets tend to be driven much more by local factors than large-scale macroeconomic and geopolitical developments.

Solid growth across the frontier market universe is expected this year, significantly ahead of most developed or emerging economies, the growth is expected to continue through the medium to long term – over a three- to five-year time horizon – helped by supportive demographics.

For instance, while many investors have assumed the drop in the oil price is negative for frontier markets, we believe this concern is misplaced. Many frontier market countries are net oil importers, positioned to benefit from the oil price fall. This combination of a supportive economic environment and lower energy costs should be positive for Asia – particularly companies in countries such as Sri Lanka and Bangladesh.

Stronger growth

The companies which are likely to deliver the most attractive long-term returns are well-managed, and the potential for strong earnings growth for multiple years can be seen. Examples include Brac Bank and Masan Group.

The first of these is a bank in Bangladesh with good exposure to the fast-growing small and medium-sized enterprises market. It also operates Bangladesh’s leading mobile payments platform.

Masan Group, on the other hand, is Vietnam’s second-largest food and beverage company with dominant positions in seasonings, noodles and instant coffee. The company has exciting expansion plans and is looking to increase product offerings in new categories.

Share price valuation

It is worth highlighting the share price valuation for frontier markets, which is attractive in absolute terms and relative to emerging markets. As can be seen below, the MSCI Frontier Markets index offers more than twice the return on equity than the MSCI Emerging Markets index for a lower price/earnings ratio.
pg33-graph


http://fortune.com/2015/07/24/chinas-slowd...es-to-new-lows/

China's slowdown pushes commodity prices to new lows

Metals prices in particular are tanking as the long-held belief in limitless Chinese demand evaporates.

Fresh evidence of the slowdown in China’s industrial sectoris pushing the prices of gold and other commodities to new multi-year lows Friday.

Gold has slumped another 1.1% to a new five-year low of just over $1.080 a troy ounce, while prices for copper hit a six-year low below $2.36 a pound. Nickel and aluminum, two other base metals that also historically serve as good indicators of demand from global industry, also came close to new six-year lows, as traders increasingly lose faith in the main factor that has supported prices for the last decade–supposedly limitless demand from China.

The news is bad news for the global economy in general, as Chinese demand for raw materials has been a major prop to emerging markets for the last 20 years. Countries from Chile and Angola to Australia and New Zealand have come to depend on Chinese demand for their natural resources, and all are seeing their economies falter and their currencies fall as the biggest engine of global growth struggles. The International Monetary Fund earlier this month revised down its forecast for global growth this year to 3.3% from 3.5% (although that was mainly due to a weak first half in the U.S. rather than to Chinese factors).
Copper prices can’t stop falling. Source: Investing.com

Sentiment in global commodity markets has taken a turn for the worse in the wake of China’s second-quarter gross domestic product data and the drastic measures taken to control the deflation of a stock market bubble. The annual growth rate of 7% announced by the authorities seemed to be at odds with economists’ assessment of other indicators, prompting fears that the country is massaging its data. At the same time, the widespread suspension of stocks on the mainland market, coupled with heavy-handed measures to support prices and stop investors selling, has fostered doubts as to the authorities’ stated commitment to market-oriented reforms.

Markit’s flash estimate of its purchasing managers index, which is based on anecdotal replies from businessmen across the country rather than the calculations state-appointed statisticians, fell to a new 14-month low of 48.2 in July from 49.4 in June, while the manufacturing output sub-index fell to a 16-month low of 47.3 from 49.7. A reading of 50 typically reflects the line between growth and contraction.

Cold comfort for commodities – Chinese manufacturing is trending down.Markit

That was short of market expectations, and markets were alarmed by how broad-based the deterioration was. New orders, export orders, employment and prices all fell, while inventories of unsold goods rose
.
The Shanghai Composite index, despite the heavy restrictions on trading now in place, fell 1.3% in response to the news, but is still up more than 25% from its recent bottom, thanks to buying funded by state-backed entities. Even so, analysts have started to worry that the amount of wealth destroyed by rout since mid-June may be having knock-on effects at national level by depressing spending and consumer confidence.

My ideas are not a recommendation to either buy or sell any security, commodity or currency. Please do your own research prior to making any investment decisions. Please note that I do not endorse or take responsibility for material in the above hyper-linked sites.

[Valuegrowth]

Current situation has created another great opportunity. We should not forget following two things as well.

• Interest rates low
• Commodity inflation nil

Companies in some industries such as Grain Elevators, meat companies, Airlines, ship and airlines builders will be next winners in the global markets.

Commodity currencies will go down further. Frontier markets will have more opportunities due to attractive valuation. Their currencies are also stable.

There will be great opportunities in DOW and NASDAQ as well. In addition, there will be emerging commodities such as Tea and solar. Finally there will be more demand for defensive stocks such as health care and food stocks.

My ideas are not a recommendation to either buy or sell any security, commodity or currency. Please do your own research prior to making any investment decisions.

[Valuegrowth]

According to Goldman Sacks group, S&P 500 would approach its all-time high in December 2015 and their year end target is 2100.

http://www.bloomberg.com/news/articl...d-needs-months

When Will It End? History Shows U.S. Stocks Rebound Needs Months

Others are even more optimistic. For example Oppenheimer is calling S & P 500 at 2311.

http://www.cnbc.com/2015/09/02/s-bol...-year-end.html

Oppenheimer's bold call: 2,311 for the S&P 500 by year-end

After this selloff, globally markets should rebound strongly in the coming weeks and months. I believe current global selloff and volatility has created opportunities in almost all types of markets such as developed, emerging and frontiers markets. Frontier markets have more opportunity on valuation and growth. Within 2 decades, the Frontier Markets will be home to nearly half of the world’s population.

Why invest in frontier markets?

They have rapidly rising middle class

They are some of the world’s fastest growing economies

They have more undervalued stock markets in the world

Some investors view Asian and African frontier markets as a more attractive investment destination than emerging markets. There are great opportunities in frontier markets such as Sri-Lanka, Bangladesh, Vietnam, Nigeria and Kenya.

My ideas are not a recommendation to either buy or sell any security, commodity or currency. Please do your own research prior to making any investment decisions. Please note that I do not endorse or take responsibility for material in the above hyper-linked sites.

[kiora]

Shooting oneself in the foot

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How we got here

By Colin Twiggs
October 22th, 2015 6:00 p.m. AEDT (3:00 a.m. EDT)
Advice herein is provided for the general information of readers and does not have regard to any particular person's investment objectives, financial situation or needs. Accordingly, no reader should act on the basis of any information contained herein without first having consulted a suitably qualified financial advisor.

If we don't learn from the mistakes of the past we will be destined to repeat them (George Santayana). Looking back over the last three decades gives an inkling as to what went wrong and to the level of economic mismanagement.
International trade is a zero sum game: what one country exports, another must import. Likewise, current accounts between nations are a zero-sum game: if one country runs a surplus, another will experience a deficit. Fortunately currency exchange rates act as an automatic stabilizer. If one country exports more than another, its currency will strengthen to the point that balance is restored in the level of trade between the two nations.
At least that is how it is supposed to work. Over the last three decades, Japan followed by China, has been rorting the system [translation: engage in a sharp practice (Australian/NZ)]. Accumulation of massive foreign reserves (e.g. by buying US Treasuries) prevented their currencies from appreciating and allowed them to maintain massive current account imbalances.
Current Accounts China & Japan
These beggar-thy-neighbor policies built up massive imbalances within the US economy.
Current Account USA
Which led to the global financial crisis, the Great Recession, the sovereign debt crisis in Europe, the subsequent emerging markets crisis and extended slow recovery we are now experiencing.

[kiora]

More stimulus coming?.How can interest rates in the EU get any lower ?
http://www.4-traders.com/BREWIN-DOLP...1/?countview=0