Hey Folk
Announcement: Zurich Life in Singapore
will ceased operation. They will only maintain existing business. No affect for
all term and condition for all policies holder. Zurich had also transfer us to
a Independent Financial Advisor where I can offer financial services from
almost all companies. So is a better thing for me. Just awaiting to get all the
coding from all the companies.
Economy and Market
The economy for next year
is not going to be very fantastic. A lot of countries around the world are
facing problems already. There are lower PMI recorded for all the emerging
countries and Singapore as well. Russia is already in recession, Canada is on
the brink of recession. Some of the country like Brazil and South Africa may
sink into a Great Depression. 2016 would not be a easy year for the economy.
Our PM had already warned
about this in Oct- Nov 2015 and I mentioned in my post. To reflect back many years ago when I am a
student in NTU, I attended a seminar by the Late LKY. He warned about market
top way ahead of the last crisis. I have to say I benefited from his seminar
and alot in the crisis in 2008-09. So our people up there, they know their
stuff.
Moreover, when interest
rate rise this December, it will further drive USD up. Which may most certainly drive the
already weaken commodities prices even lower. Usually the lowered commodities
price will impact emerging market more as they are the producer’s countries. A
lower than now commodities price will really affect those countries
significantly.
Moreover, it will surely affect those weak holders on their properties
purchased. A increase in rates it going to affect short term rate very quickly
and in a significant scale which may force their installment rates to increase
and hard to afford. This may lead to another force selling.
Let look at some oil
stories
Take a look at this video of Bill Gates talking about
renewable energy.
Courtesy from Gates Notes
Look at the chart above, demand of oil maybe way lower in decades to
come. There are a few factors to consider.
1)
The world’s billionaires setting up funds to research on the renewable
energy.
2)
The world now alerted on issue of global warming,
3)
OPEC have structural issue
My take is the world’s billionaires are trying to find a news source of
energy so that in future they will be richer and more powerful. Remember how
the oil companies and countries do it in the past, they are finding this
opportunities. Also with global warming issues, many government are trying to
do something about it. So it affect the oil companies.
The other thing is in 2007 crisis, oil drop because of credit bubble.
Now oil drop is because of structural problem. There are problems in the OPEC
as well and many other reasons. Oil is deeply entrenched in a down trend. I had warned about it long
ago using COT data. However, there is a significant lapse in the timeframe
between news and the COT. COT data had already shown the collapse many months
ago.
Stock market wise, there
are no sign that the market is giving way. In fact a lot of big boys are buying. A lot
of indicators, relationships, and fundamental have not shown that the market is
coming off. They are still showing and reflecting a buy. I still think there
will be a rally into the year end. Probably into early 2016 as well. These do
not suggest that the up move will be daily. They will be down days. All these
down days are buying opportunities.
Question why are there no
selling but buying by the big boys if the economic situation mentioned above
are so bad? Probably the big boys are buying to set up for a sell to retail
investors. They want the market to go into euphoria, where a lot of people will
participate in it. So they can distribute them to the late comers. They will
cook up nice stories to attract buyers. While they will distribute their holdings
for cash. Or maybe they have more advance news than us saying that things are
actually better. Who knows.
The US market, German, Euro Stoxx index and China market are the better
bet for the up move. The weaker market are all the emerging market and also
Singapore.
I will do a separate post on my
take of 2016, I have not got enough data yet. Last year in 2014, I predicted
that in 2015 will be a up year. Let see how it turn out.
Oil and Gold will still drop further. Maybe I do a hit and misses of
mine records for the year as well.
There are people who ask
me which sector that will be affected in Singapore market. They are the
commodities companies and REITS. Slowly it will affect the property firm and
the banks. Well for me I still prefer to deal with indices as there are regular
activities and volatile enough.
Cheer
