Sunday, March 7, 2010

Luxury Goods, Asia Remains Attractive, My Thoughts

Luxury Goods: China is now the number 2 luxury consumer, after beating USA. Japan currently remains as the world's number 1 luxury goods consumer.

Asia Remains Attractive: According to a report by Credit Suisse, the correction in Jan/Feb this year is more of a healthy correction than a trend reversal and advises investors to buy on dips.

In addition, they expect two positive drivers in the economy,

1. Policy risks have been largely priced in. So further downward risks from any more tightening of monetary policies are not expected.

2. They are expecting a positive earning cycle. Companies are currently reporting better than expected earnings, and such reports are expected to continue in the upcoming financial reportings. This improvement in fundamentals is expected to drive up the markets in the near future.

My thoughts : I do agree with Credit Suisse on the positive outlook on the economy.

The Feds has already tried to raise some of their interest rates, signaling improving sentiments. Greece's problems has more or less been factored in the market, and yet it has not been dropping seriously. Dubai's problem is long forgotten. China's hike in interest rates has also not created much of a dent in the stock market.

Basically, with the positive earnings reported by many companies, the stock market should continue to run in the near future.

So personally, I have actually enter the stock market already. And will be looking for addition counters with potential growth, especially in China.

Also, I was reading reports on property investments. It is advised to buy into REITs, rather than companies that deal with the actually property itself. This is because countires, like say Singapore have been starting to implement laws to prevent a property bubble from building. However these laws will not affect REITs as much, as REITs are essentially just looking at the rental revenues.

In my opinion, whether it is REITs or land stocks, it is still important to do your homework on the actual stock that you are interested in. I have actually a land stock in mind at the moment, which is UOL. It is currently trading below its net asset value (NAV). And I feel that even with the additional laws by the Singapore government, land prices will eventually have to go up to, due to our limited supply. So this can be one stock that you can consider.

1 comment:

Anonymous said...

I agree that real estate will continue to thrive. My perspective is at