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Straits Times 3,113.75 -13.99 -0.45%
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Editorial Desk
Editorial Desk | 13 January 2012
By: Xavier Lim
Articles (51) Profile

Speculation on hopes that the Chinese government will soon relax its monetary policies to support economic growth spurred strong buying across the regional stock markets. Notably, the Shanghai Composite Index jumped almost 6%, lifting the Hang Seng Index to end up over 400 points in two days.

At the same time, we have China’s December international trade data showing weakening global demand due to the fallout from Europe’s debt crisis as well as a softening domestic demand environment. These data added to the odds of further monetary easing measures by the Beijing government.

Meanwhile, Europe’s biggest economy, Germany, reported that its gross domestic product expanded at a pace of 3% in 2011, slower than the 3.7% pace it grew a year ago. Based on the preliminary data from Federal Statistics Office, most of the expansion occurred in the first half of the year, but shrank by a quarter percentage point in the final quarter of 2011. Specifically, Fitch Ratings reportedly called on the European Central Bank to buy its troubled euro zone debt to avert a ”cataclysmic” euro-zone collapse.

On the other hand, the US Federal Beige Book said economic activity improved at a modest to moderate pace in the final stretch of 2011, an improvement from the mid-November report where some districts reported growth at a “slow” pace.

With earnings season having officially just begun, the spotlight has returned to the corporate earnings results. However, Europe will not be far from investors’ minds as the sovereign debt woes show little signs of abating. Hence, constructing a diversified portfolio enables you to reduce your exposure to market risks.

Remember the first six ‘gems’ that were featured in issue 425 or have you missed that out? Do log on to our website, www.sharesinv.com, to read about them.

Well, the six ‘gems’ performances have been nothing short of encouraging, outperforming that of the Straits Times Index by 2 percentage points as at 11 January. An auspicious start to the Lunar New Year! This issue, we shall unveil the next six ‘SPARKLING GEMS’ in our Shares Investment Portfolio. Flip no further to page 6.

For traders who want to become successful, we have Dr Alexander Elder, a renowned professional stock trader, sharing with us his views and recommendations on the current stock market situation and how traders can improve themselves. Turn to page 12 to find out more.

Meanwhile, traders are betting that the Reserve Bank of Australia will lower the benchmark interest rate even further by May, largely due to Europe’s debt turmoil and a slowing Chinese economy. Turn to page 14 and hear what industry watchers have to say.

Have a joyous and prosperous Lunar New Year!

Notice
Due to the Chinese New Year holidays, there will be no publication on 30 January. Our next issue (427) will be out on 06 February.

Armed with an arsenal of investment knowledge, Xavier is the Senior Research Editor at Shares Investment.

Please click here for more information about this author.


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