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Straits Times 3,116.81 -10.93 -0.35%
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Editorial Desk
Editorial Desk | 25 May 2012
By: Xavier Lim
Articles (51) Profile

Traders are lamenting tougher trades these days as global stock markets fall and gain in choppy trading over the developments in the Eurozone. Meanwhile, former Greek Prime Minister Lucas Papademos said the country is preparing to exit from the Eurozone during an interview with Dow Jones Newswires while continuing uncertainties in Europe caused the Euro to decline below US$1.26 on 23 May.

In Asia, the decision by Bank of Japan to keep its benchmark interest rate unchanged in the current range of 0 to 0.1 percent as well as introducing no further expansion to its asset purchase programme pushed the Japanese yen higher. This put further strains on badly-battered shares of Japanese exporters even as Fitch Ratings cut the Japanese yen ratings to A plus from AA minus. It also cut Japan’s sovereign rating by one notch to A plus from AA and issued a negative outlook on both the debt and currency issue.

Back home, inflation rate rose to a four-month high of 5.4 percent year-on-year in April as housing and transport costs jumped 11 percent and 7.5 percent respectively. Core inflation, which excludes private road transport and accommodation costs, however, fell 20 basis points to 2.7 percent from March.

Fronting our cover is Robert Kiyosaki, the best-selling author of the Rich Dad series of books, who shared with us his views and recommendations on the current stock market situation and how an average investor can create an unfair advantage over the others. Flip no more to page 6.

Next, we take a closer look at the growth prospects of the commodity markets. With worries of a global economic downturn and stronger US dollar, commodities, especially cotton, have continued to experience falling prices this year. Can we see a near-term turnaround for the global cotton market? Is Olam, whose 3Q12 results were dragged lower mostly by its cotton segment, still a buy? Turn to page 12 to find out more.

Given the Eurozone risks and weaknesses in the US and China economic growth, we are cautious that our local bourse may test the critical level of 2705.

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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