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El. Erian: 3 Ignored Sectors You Can Look At Now
Aspire, Investments | 21 September 2015
By: Vance Wong
Articles (74) Profile

Earlier yesterday, Allianz Chief Economic Adviser Mohamed El. Erian mentioned in an interview with CNBC that there are several sectors in the market that has been ignored for some time. Essentially, this is the time where investors can find great value in three sectors mentioned by Mohamed: emerging markets, oil and tech.

Emerging Markets: Once In A Decade, Post-repricing Opportunity;

According to Mohamed, it is a once in a decade opportunity that emerging markets (EMs) go through a fundamental repricing. He mentioned that more often than not, the repricing of EMs would overshoot, creating even better value for investors that catch on fast.

However, every opportunity comes with a price. The Chief Economic Adviser warns that investors should expect a spike in volatility, regardless of sector or market. As such, Mohamed recommends this movement only to investors who have at least a five- to ten-year horizon.

Oil: Severely Unhinged Sector; Buy Now & Hold For 5-10 Years

The opportunity available in the oil market is similar to that of EMs in that it has been ignored for a very long time now. However, Mohamed expects high volatility as well. He mentioned that there are still some stuck in the oil market looking to get out, which represents even more value.

Those that do not have positions in oil yet, and even EMs, can look to go in now, slow and gradually. Those that already have positions can look to increase their stake gradually as well. Similarly, Mohamed warns that this is only for those with a long horizon.

Value In Market Now; New Tech Most Attractive Now

Previously, Mohamed mentioned that cash is still king, especially in times of uncertainty. Right now, he said to CNBC that cash is still important, but investors can start to look for opportunities in the right places. One such sector is tech – Mohamed said that we cannot dismiss the fact that there are some “massive innovations” going on in the tech industry.

Furthermore, Mohamed thinks that the general market is way too obsessed with a single rate hike, which would not even be groundbreaking. We should focus on the journey instead, which would determine how well the global market will recover, implored Mohamed.

Investors’ Takeaway

Nevertheless, when the repricing of not only EMs, oil and tech, but also the general market, that is when investors can start looking for value stocks. According to the Allianz adviser, the opportunities are not here yet, but “still to come”.

This is largely because the markets are still largely codependent on central banks. However, when the time comes, there will be a lot of value in the market for investors that are quick. That aside, EMs, oil and tech are sectors that investors can start looking at right now.

Still worried about when and how much would the US Federal Reserve hike interest rates? Do you have burning questions that you want to ask regarding the China economic slowdown and SHCOMP nosedive in June? Are you confused if any of the external factors from other countries in Asia will affect your Singapore stocks portfolio?

Catch renowned investors and speakers with rich experience in the stock markets, who have had witnessed multiple stock market crashes and global recessions over the years at Shares Investment Conference 2015!

Speaker profiles

1. Dr Chan Yan Chong, a renowned investor with more than 25 years of experience and the MBA programme director & associate professor of business school at the City University of Hong Kong.

2. Kevin Gin (CFA), the Founder and Principal of Alpha Capital. He was the former COO for CITIC Securities, Head of Singapore and Regional Real Estate Research for Kleinwort Benson Securities Asia (now part of Credit Suisse) and Head of Greater China Property Research with Yuanta Securities (Hong Kong)

3. Louis Wong, one of the most experienced fund managers in Hong Kong. He has over 25-years of solid experience and track record in the financial market. He was awarded Best Financial Analyst for 3 years by the Putonghua Channel of Radio Television Hong Kong and is also a part-time instructor of several investment courses in various Hong Kong universities.

4. Daniel Loh, an investment coach that specialises in equities and derivatives trading, he appears regularly on local TV financial programmes like “Good morning Singapore” and “Hello Singapore”.

With a Communications background, Vance has the passion to write with a purpose - to provide content supported with substantial evidence to vested readers.

Please click here for more information about this author.


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