Forget Password?
  1. Indices
  2. Commodities
  3. Currencies
Straits Times 3,134.80 +18.63 +0.60%
Hang Seng 26,505.95 +2.02 +0.01%
Dow Jones 27,024.80 +237.44 +0.89%
Shanghai Composite 2,982.74 -8.30 -0.28%
Daniel Loh: Don’t Worry About Greece; STI To Rise!
By: Vance Wong
Articles (74) Profile

Just earlier this week on Monday morning (SGT), Greece has announced that they will not default on their loans. Is this good news for local investors? Local investment guru, Daniel Loh, thinks that while global markets fear that Greece will eventually default, its impact will not be as great as many would expect.

In fact, he thinks that the impact on local soil would not be substantial enough for a panic. Daniel shared about his opinion about how Greece will affect the Eurozone and ultimately the global economy in a recent interview. Daniel Loh will be speaking about how investors can look out for good fundamental stocks during this Greek crisis in an upcoming seminar.

Second Lehman Crisis If Greece Defaults?

European banks had minimized their risk exposures to Greece by selling their Greek holdings over the past few years. Thus, I think even if Greece defaults, the impact on European banks will be minimal. The psychological impact will also be minimal because the Greece debt problem has been around for six years now.

Furthermore, Greece’s Gross National Income (GNI) only makes up one percent of the total Eurozone’s. One percent is really not that significant compared to countries like France or Spain, which contributes 21.64 percent and 10.8 percent of total Eurozone GNI respectively.

Greece Is Not Why US Fed Delays Rate Hike

Many investors are worried that the Greek crisis will affect the US Fed’s decisions. However, Greece is actually just a small country in the whole of Eurozone.

They will consider all the major economies like Japan, China or the Eurozone as a whole. All these economies are now still having problems and that is the reason why they are still having a loose monetary policy.

China is still lowering their interest rate. In such an environment, we think the Fed will delay raising interest rate unless the world economy starts to reflect better results.

SHCOMP Plunge; Second Phase Of Bull Market

The Shanghai Composite Index (SHCOMP) has plunged last week and markets are worried the decline will continue. Some even think that Greece is affecting the SHCOMP. I would like to point out that I had previously mentioned that SHCOMP will undergo some corrections.

This is because China is currently in the second phase of a bull market. During this phase, investors will find it harder to make money and the index will go sideways. The market will now ignore all the stimulus measures and concentrate more on the fundamentals of stocks.

Those stocks without good fundamental earnings will suffer in this phase. As such, it is a period where investors with positions in the China market have to be mindful of the stocks that they own.

STI To Pick Up; Crude Oil Attractive

Source: Todayonline

The STI has declined from its high 3,500 in April to near 3,300 recently. We think that the index has corrected quite a bit and it will pick up in the next half of this year. The main reason is because stocks are finally cheap again.

Investors that want to look into specific sectors to enter, crude oil is one. Although the sector had been underperforming and oil prices have been depreciating for the longest time, prices per barrel have been increasing for the past few weeks.

It increased 47 percent, from $42.41 per barrel to $62.58. This might actually be a good time for investors to catch the uptrend for crude oil, though it will still take some time before oil prices go back up to usual highs.

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.

Join The Conversation
The Shares Investment editorial team welcomes constructive feedback on our coverage and content. We would also be delighted to answer any questions on the above article. Leave us a comment below, and we'll get back to you shortly!

All Rights Reserved. Pioneers & Leaders (Publishers) Pte Ltd. Best viewed with Mozilla Firefox 3.5 and above.