ID :
54166
Tue, 04/07/2009 - 08:04
Auther :
Shortlink :
https://oananews.org//node/54166
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TIMELY NOW FOR INVESTORS TO INVEST IN FINANCIAL MARKET, SAYS MIA
KUALA LUMPUR, April 6 (Bernama) -- Investors must come to grips with the fact that the actual movement of the global economy and that of the financial market, has a time delay or difference of about six months, the Malaysian Investors Association (MIA) president Dr P.H.S. Lim said.
He said the financial market had the tendency to move ahead of the main
economy.
"For that reason, on the first day of 2009, I had advocated that this is a
year for financial market opportunities.
"We have seen major markets in Asia, especially Hong Kong and China as
expected, appreciate by more than 20 percent in just a matter of weeks. There is
more room to move upwards from time to time, despite bad corporate earnings,"
he told Bernama here.
According to Lim, the G20 meeting -- the group of 20 major economies -- had
come and gone.
He said the G20 controlled 80 percent of the global gross domestic product
(GDP).
"The news generated from the G20 meeting was one of euphoria but such a
happy concept is just a short term affair," he said.
In the long run, Lim said the global injection of funds could exceed US$8
trillion for the main economies and its impact could only be felt over a two
year period.
Thus, he said, the actual economic recovery may take place by the end of
2009, to be followed by rising inflation and prices for oil, metals, soft
commodities and food items.
As the interest rate is cheap and funds begin to be available, an
accumulation of assets takes place in commodities, stocks and properties, he
explained.
Touching on currencies, Lim said China is in a dilemma with US$2.1
trillion international reserves and 70 percent of these are American
based financial instruments, especially treasury bills.
Two years' ago, he said the exchange rate for the China's Renminbi (yuan)
was US$8.11 to one US$ and this morning at RMB6.8353 to one US$, it appreciated
by RMB 1.2747 or 12.33 percent in favor of the Chinese currency.
"There is a big possibility for the yuan to rise further gradually. Thus,
it is better to invest in currency rather than the bank deposits at around 3.5
percent per annum," he said.
-- BERNAMA
He said the financial market had the tendency to move ahead of the main
economy.
"For that reason, on the first day of 2009, I had advocated that this is a
year for financial market opportunities.
"We have seen major markets in Asia, especially Hong Kong and China as
expected, appreciate by more than 20 percent in just a matter of weeks. There is
more room to move upwards from time to time, despite bad corporate earnings,"
he told Bernama here.
According to Lim, the G20 meeting -- the group of 20 major economies -- had
come and gone.
He said the G20 controlled 80 percent of the global gross domestic product
(GDP).
"The news generated from the G20 meeting was one of euphoria but such a
happy concept is just a short term affair," he said.
In the long run, Lim said the global injection of funds could exceed US$8
trillion for the main economies and its impact could only be felt over a two
year period.
Thus, he said, the actual economic recovery may take place by the end of
2009, to be followed by rising inflation and prices for oil, metals, soft
commodities and food items.
As the interest rate is cheap and funds begin to be available, an
accumulation of assets takes place in commodities, stocks and properties, he
explained.
Touching on currencies, Lim said China is in a dilemma with US$2.1
trillion international reserves and 70 percent of these are American
based financial instruments, especially treasury bills.
Two years' ago, he said the exchange rate for the China's Renminbi (yuan)
was US$8.11 to one US$ and this morning at RMB6.8353 to one US$, it appreciated
by RMB 1.2747 or 12.33 percent in favor of the Chinese currency.
"There is a big possibility for the yuan to rise further gradually. Thus,
it is better to invest in currency rather than the bank deposits at around 3.5
percent per annum," he said.
-- BERNAMA
