Fear not, bull market has years of life left

[mr funny]

July 4, 2007

Fear not, bull market has years of life left


THANK you, Straits Times, for confirming my nagging suspicion that this must be the most bullish and durable economic cycle that Singapore will experience for many a year to come.

As a contrarian, I can't decide whether it was the article on 'Surging asset prices could trigger 'big shock' worldwide' or ''Poster girl' had to empty piggy bank for son's $100 medical bill' that put the proverbial nail in the bear's coffin (ST, June 30).

These articles are proof that bull markets 'climb a wall of worry'.

First, I would like to know where all the risk managers were right before the 1997 Asian crisis. Were they prescient enough to call that event?

Second, people need to understand that bull markets are neither born of the same fundamentals nor do they die the same deaths: there is a very wide gulf between the fundamentals in place right now and those prior to 1997 and no one is wise enough to predict when and how the current bull run will end.

The mere fact that there is so much liquidity and that this liquidity will eventually feed inflation suggests strongly that more debt and more investment in hard assets is a better approach. Sitting on cash could very well be a slow path to reduced wealth in the next five to seven years.

Singapore experienced eight years of sliding to dormant property prices while its economy dodged a number of bullets, from the reverberations of 9/11 to the Sars epidemic.

From 2000, while property prices in the UK, Australia and the US rose steadily and while the economic juggernauts in China and India roared on ceaselessly, Singapore sauntered along in fits and starts.

And now a mere three years into this recovery and Singaporeans cannot believe it. It's as if they can't stand prosperity!

It seems a better bet that an eight-year bear cycle will be followed by a bull cycle of at least equal if not longer duration and that its vigour will equal or exceed the severe malaise from 1997-2003.

There will be air pockets along the way and surely no one should be leveraged beyond economic prudence, but to rain on the parade at this stage is severely premature.

The time to sell will be when risk managers see little or no risks and contrite 'poster girls' from the 1997 Asian crisis have a change of heart and start showing up at those show flats on Orchard Road.

Christopher A. Bobin



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The mere fact that there is so much liquidity and that this liquidity will eventually feed inflation suggests strongly that more debt and more investment in hard assets is a better approach.

[Beggar]

July 4, 2007

Fear not, bull market has years of life left


THANK you, Straits Times, for confirming my nagging suspicion that this must be the most bullish and durable economic cycle that Singapore will experience for many a year to come.

As a contrarian, I can't decide whether it was the article on 'Surging asset prices could trigger 'big shock' worldwide' or ''Poster girl' had to empty piggy bank for son's $100 medical bill' that put the proverbial nail in the bear's coffin (ST, June 30).

....................

The time to sell will be when risk managers see little or no risks and contrite 'poster girls' from the 1997 Asian crisis have a change of heart and start showing up at those show flats on Orchard Road.

Christopher A. Bobin

We don't like wealth. We want to be poor and we want our neighbours to be poor too.

[Reuters]

Assets under management came to nearly US$600b, driven by inflows from Asia and Mideast.
Reuters Singapore
4 July 2007

Assets managed by fund managers in Singapore grew 24% to almost US$600 billion in 2006, driven by inflows from Asia and the Middle East, a Singapore cabinet minister said on Wednesday.

"Total assets under management have grown robustly over the last six years," said Senior Minister Goh Chok Tong in a speech today.

"The assets managed by Singapore-based fund managers grew by 24% to almost US$600 billion in 2006."

Mr Goh, who is also chairman of the Monetary Authority of Singapore -- the city-state's central bank -- also said funds from the Middle East and South Asia grew by 21% and 36%, respectively.

He said 57% of the total assets managed in Singapore were invested in Asia last year.

Singapore has attracted global asset managers, private banks and hedge funds to boost its fast-growing financial services industry as it tries to reduce the economy's reliance on manufacturing.

In recent years, several international banks such as UBS , Credit Suisse and Societe Generale have set up their regional private banking offices in Singapore.

Citigroup earlier this year appointed Deepak Sharma to run its global wealth management business outside the United States from Singapore, making him the bank's only international business head not to be based in New York.

Millionaires in Middle Eastern countries such as Saudi Arabia, enriched by a doubling of crude oil prices in four years, are placing more funds in Singapore as the city-state cut taxes and offered incentives to investors to compete against Hong Kong and other Asian financial centers.

"Singapore, in the recent two years, is increasingly considered to be a more attractive place as a fund management base," Mr Chua Soon Hock, managing director of Asia Genesis Asset Management in Singapore, which manages about $450 million, told Bloomberg. "Singapore is still behind Hong Kong and Sydney. However, the gap is narrowing on the hedge funds side of the business."

The 190 hedge funds in Singapore managed more than S$40 billion of assets, a 150% increase from a year earlier, the Monetary Authority of Singapore said in an e-mailed statement today.

Of the total funds managed in Singapore, 43% came from the Asia Pacific region, while about 35% were from the U.S. and Europe, the central bank said. About 55% of the funds were invested in stocks last year, from 47% a year earlier, it added.

Last year, Singapore had the biggest growth in the number of millionaires, where individuals with net assets of at least US$1 million, excluding their main residence and consumer goods, rose 21%, a global survey by Capgemini SA and Merrill Lynch & Co. showed last week.