Thursday, May 14, 2009
Answering More Queries On The Markets
Aaah, finally a smart proposition, you are about the only person wise enough to say that "equities are trying to catch up because prices have been overly depressed by stale confidence"... I totally agree. Many are of the view that stock prices have run ahead of fundamentals. While that is partially true, we have to say also that share pries have been unfairly hammered over the last 3 months of 2008. Thus, much of the rally this time around is just to get us back on fairer valuations, and not necessarily running ahead of a recovery.
I think the Dow will find a new bottom at 8,000 while the KLCI will have very solid support at 980 for the rest of the year.
The rates are only a guide, if it has gone past 100, the risk aversion thing is technically over. Even if the rate falls back below, its more just volatility in the rate itself, I think the risk aversion things has subsided significantly now.
p/s photo: Amanda Strang