Dear Friends,
Recently I received an interview on the following questions on investment market situation and below are my answers:
Q1. Crude oil price
dipped slightly following the Doha meeting because Iran refused to pump less.
What do you think will happen the crude oil prices in the next few months then?
Crude Oil has bottomed
at US$26 and probably is now in a bull market. You can see it from the oil
price movement recently. It all started with the possibility of the oil price
freeze suggested by Russia in February. Any bullish news now is going to push
the price higher and higher. Any bad news like the rejection of Iran oil
price freeze are digested easily by the market.
Even after the bad news
of the Doha meeting following a 3 days drop in crude oil, it climbed from $39
to as high as $44.50 recently. The recent drop in China GDP figures from 6.8%
to 6.7% did nothing to dent the price of crude oil too.
All the bad news have
been priced in. Be it the big Iran oil supply that is going to flood the market
or the slowing down of China Economy or the no deal in the oil price freeze.
However, what if in
these next few months there is a breakthrough among the OPEC countries? What if
there is a oil price freeze that occur without Iran? What if there is any
sudden explosion of any oil fields? What if a Hurricane hit some oil rigs in US
and stop production? What if Donald Trump who “propose bombing the hell out of
ISIS” got the nomination to be the republican candidate to be the next US president?
Any of these news that
occur may suddenly trigger a burst in the oil price in this market. Bear in mind
that now, market is more sensitive to bullish news than bearish.
I do look forward by
the end of this year that crude oil reach $57-$60 where it will face a big
resistance.
Q2. How will the oil
prices affect the US Fed's outlook for the global economy, noting that oil
prices played quite a huge role in the recent recovery in most markets?
I think the depressed
oil price is one of the considerations by the FED in deciding how fast US will
increase interest rates. The reason why the market thinks that FED will not
increase the interest rate in the next meeting is because there isn’t any inflation concern now due to the depressed
oil prices and the recent dovish comments by FED chairwoman Janet Yellen.
However I expect all
the dovish stance to change if crude oil price continue to increase in the next
few months.
I have many times in
recent interviews talk about my view that China economy might bottom this
second half of the year and recover.
If that is true, I think US will need to
increase interest rates much faster than expected next year.
Q3. Also, a few oil
drillers have defaulted because of the persistently low oil prices. But big
boys like Keppel and Sembcorp experienced rallies in their stock prices as
crude oil price recovered. What would happen to them now, though?
They probably have
bottomed in February just like the oil price. If oil price did continue its increase,
I expect the oil stocks to continue its recovery. As I have mentioned at the
end of last year and in February, I am bullish on oil & gas and commodities
sector this year.
Interviews by Shares Investment in recent months:
http://aspire.sharesinv.com/6042/daniel-loh-3-things-note-singapore-market-recovery-bullish-oil-gas/
I do not mean invest
now when a lot of oil and gas and commodities stocks have recently appreciated
a lot. But if in recent months, those stocks start to consolidate, try to pick
some up. Oil and Gas and Commodities sectors this year will outperform other
sectors.
Q4. Noting that Asian
currencies and markets have been performing well over the past month or so,
will commodities and commodities dependent countries be affected too? How and
why?
Yes. You are seeing commodities
exporting countries’ currency have bottomed and been appreciating since January
or February. Currencies like Aussie dollars, Canadian dollars or even Malaysian
Ringgit have been strong in recent months.
We have stated even
since last year we expect commodities to go into a super bull run this year. It
has happened.
I am so excited about
commodities this year. I have mentioned that this will be one of the biggest
turnaround story of this year, and it is happening already! That is the reason
the commodities exporting countries currency are appreciating.
There are so many investing
opportunities now.
Q5. In your opinion, do
you think that the recent rally in Singapore's stock market was not backed up
by fundamentals but rather, by the US stock market? Why and what can we expect
in Singapore's market in the near-term?
Singapore STI has run
from 2530 to now 2940. In March when I was interviewed, we did give our views
that we are bullish on STI this year because of China and commodities.
However
we also pointed out that STI might reach a resistance at 2950-3000.
Interview on STI outlook by sharesinvement:
We continue to think
so.
As STI has run so much
in the last 3 months, my suggestion is wait for it to consolidate a bit first.
Prices are high now.
We do expect Wall
Street famous saying “Sell in May and Go Away” might happen this year as US
market all near to all time high again.
My suggestion is short
term go away next month and come back to invest again after the market
consolidate. You can buy stocks at a discount.
Rgds
Daniel Loh
www.danielloh.com
-------------------------------------------------------------------------------------------------------
FREE Investment Seminar by Daniel Loh
Come and find out about Daniel Loh's views, investment strategies and market tips!
You shall also learn:
1) Which index in the world might enter into a super bull run cycle in 2016 that can make you rich?
2) What is the prediction for STI in 2016 and will it continue to be bullish?
3) What are the Singapore stocks & sectors to watch out for in 2H 2016?
4) What are the Signs and Hints that have start to show China economy might be bottoming?
5) How can you make money consistently in the stock market?
Dates:
24 May (Tue) English session Time: 7pm -10pm or
25 May (星期三) 华文讲座 Time: 7pm-10pm
Venue:
International Plaza, #34-07, 10 Anson Road, S(079903)
Tanjong Pagar MRT, Exit C
Speaker: Daniel Loh
Regularly interviewed by Mediacorp FM958
Regular interviewed by Mediacorp Channel 8 Financial Programmes
SIAS investment trainer
Invited speaker for Phillip Securities
Invited speaker for Affin Investment Bank
Invited speaker for OCBC Securities
Invited speaker for Shares Investment
Invited speaker for Shareinvestor
