[DKKBF]Wednesday February 7, 1:50 PM Dr Doom is not all gloom on Asian old economy stocks
By Sharon Lee
Dr Marc Faber, a.k.a. Dr Doom, at the Market Outlook For 2001 seminar organized by Asiastockwatch.com last Saturday, certainly lived up to his reputation by predicting that the Nasdaq composite index would fall further to 1,000! Speaking to over 200 participants at the seminar, he advised investors to avoid Western stock markets and technology stocks, in particular. However, he suggested investors to go for the old economy stocks in Asia instead, which are relatively cheaper. He is also for Euro-denominated bonds as US$-denominated bonds were less attractive given the Feds aggressive move to lower interest rates. His fear is that lower interest rates could rekindle inflation. He is also a proponent of mining stocks and gold. Dr Faber said, I do not rule out a monetary crisis in the next two years and expect a monetary system where gold will play a role.
More optimistic for the Year of the Snake was the fengshui master from I-Ching Geomancy Center, Master Ong Thiam Peng. According to his readings, the Year of the Snake, which technically began on 4 February, will be a year of gradual progress. The advice for this year is "gradually progressing in righteousness, a man fit to rule his land. The unmoving quality of the mountain, conjoined with the gentleness of the wind, give rise to inexhaustible activity."
Lim Eng Hai, director of research at JM Sassoon, also concurs with that view and believes that it is time to turn positive. Stock markets have corrected sharply ahead of the economic downturn. Sensitive sectors may have done most of the fall, he said. The US experience will be nothing like the recent Asian crisis: No flight of capital. A hard landing cushioned by timely interest rate cuts, and possibly tax cuts too. Its leading companies will emerge stronger, prevailing over or taking over rivals, he added.
Lim Eng Hai is projecting the Dow to break out of the trading range high of 12,000 by end 2001. And Singapore will break out of 2000, sail past 2200 and aim for 2500 again! For those looking out for more defensive plays, he recommends Asia Pacific Breweries, Robinson & Co, Singapore Food Industries, SembCorp Industries, SPH, ST Engineering and Singapore Telecom. Meanwhile, for those with a bigger appetite for excitement, he recommends restructuring plays such as OCBC, Straits Trading, UOB and Singapore Land. Finally, for those looking for aggressive stocks which are caught in the eye of the current storm, he recommends Chartered Semiconductor Manufacturing, Venture Manufacturing, Datacraft and Creative Technology.
This article was filed 05 February, 2001 08:43 PM |
