Sunday, January 24, 2010

Economic Updates

1) Singapore property

I am sure many people would have seen that the Singapore property market is building up rapidly again from recent newspaper reports, especially the private property market.

Just some statistics that I find interesting : Foreign home buyers from different countries have different price preference for property.
  • Westerners (UK,US and Australia) and Indonesians preferring houses in the $1.5 million to $5 million.
  • As for the rest of the people from the region, like Malaysia, China and India, its between $500,000 to$1 million.
  • Malaysian owns the most number of property in Singapore, followed by Indonesians. However if you were to compute the effective dollars invested, Indonesians beat the Malaysian hands down.
Below is the place where I got the statistics from.

2) People are ditching China for the US

Was reading an article from The Business Times on Friday. Apparently many people, about 60%, are now optimistic about the US economy as compared to the majority who had a pessimistic view when polled in Oct 2009. In addition, many people believe China is building a bubble.

China is said to be building up inventory at a rate which no country/region can follow. This means that even though they might be seen to be growing, eventually if no one else buys from them, they will be in deep trouble.

3) China is seeking ways to invest their Foreign reserves

China has about US$2.4 trillion of reserves and will be looking to grow it. In 2008, Beijing transferred US$200 billion to sovereign wealth fund China Investment Corp in or to seek higher returns.

So if they continue to move more money out of China to invest, I personally would think that it would definitely help the region, especially Hong Kong and Singapore, as we are major financial hubs in the region.

3) China curbing rampant bank lending by increasing its reserve ratio

This has cause the region's stock market to drop the last few trading sessions. However as you can see from the graph above (taken from a report from Phillip Capital), the China government has actually been doing much in curbing speculation. However as long as China is truly growing, the stock market will definitely rise strongly. Hence, if you still believe the China has room for more growth, these few days of weakness is a really a good time to buy in.

4) Below is a table of predicted economy GDP growth for the major countries. Note that all are expected to be positive. ( Courtesy of Citibank)

I just realized that all of my topics have China in them. China is really making much headlines with its growth. And I believe it is worthwhile keeping watch on it.

On a side note, do invest with cation this year. Many reports that I have been reading warns of a correction in the middle of this year, but eventually all is expected to be well by the end of the year. So do trade with care.

However in my opinion, if something major does go wrong again, we could be in for a major correction as I feel that the stock market is recovering a little tooooo fast. Remember, preservation for capital is crucial for long term growth!

1 comment:


I cannot believe the speed at which china is developing.