Will the Rally Continue or Will a Correction Follow?
My Take (which will be elaborated in my later postings): 2010 will still be good for equities in general, including Asian equities. I still see rates being kept low in developed nations, in particular the US, EU, Japan and UK. I also see USD being in a controlled weakening phase (even though you might hear otherwise whenever Obama, Geithner or the Fed try to calm the markets). That is the crux for 2010, weaker USD, which will underpin upside for US stocks, which in turn will rub off well on other markets. However, 2010 will not see as strong a performance as 2009. I still see 20% on average for Asian markets, i.e. FBM KLCI target of 1,500. Malaysia should be the outperformer in 2010 compared to other Asian markets as pressure will mount on ringgit to appreciate, causing surges of hot money into the markets. That needs to be watched diligently by Bank Negara or else we will have a recurring bubble.
p/s photos: Ishihara Atsumi