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Editorial Desk
Editorial Desk | 06 July 2012
By: Xavier Lim
Articles (51) Profile

As the second half of 2012 begins, it does not take much to deduce the risk that will have investors on their toes for the rest of the year. The European debt debacle has been dragging on for nearly three years. Contrary to their on-field supremacy that saw Germany, Italy, Portugal and Spain in the semi-finals of the recent Euro 2012 tournament, the way European nations are handling their dire financial situation has been lacking in vigor.

While a ‘breakthrough’ was declared by European Union President Herman Van Rompuy at the 19th EU Summit, cheers were swiftly drowned by concerns. Crucial details of how the bank bailouts would actually work were omitted and the fact that the establishment of a common banking supervisor comes first implies that there is going to be a delay before any ‘rescue’ is possible.

Of late, it is becoming increasingly apparent that a stop must be put on these serious challenges before the rest of the world gets submerged altogether. Economic activities across the major markets such as US, China and UK softened last month. The more worrying development, though, is in Europe. According to Markit, business surveys are pointing to a 0.6 percent decline in the second quarter gross domestic product for the Eurozone. Compounding the situation, the currency union’s record unemployment rate of 11.1 percent in May looks set to rise further.

The gloomy sentiment was painted all over the equity markets. Barring the June rally, major indices were awfully close to where they were at the beginning of this year with some setting lower lows. Nonetheless, compared to other bellwethers of the world’s advanced economies, our Straits Times Index (STI) emerged the global outperformer, gaining 8.77 percent as of 29 June.

In this issue’s cover story, we bring to you the second review of our SI portfolio. As at 29 June, a core cushion of 5.51 percentage points was logged over the global outperformer STI. Flip to page 6 where we round up the performances for the first half as well as our takes on these 12 quality assets’ prospects.

Next, get your fortnightly dose of technical analysis with ChartNexus starting page 14. This time round, they are revealing the usage of Bollinger Band® in conjunction with the Relative Strength Index.

As the earnings season kicks off, be sure to catch the latest update on our web.

Enjoy the read!

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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