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3 Attractive Markets Before US Fed Rate Hike!
Aspire | 30 September 2015
By: Raymond Leung
Articles (142) Profile

The market was taken aback when the Federal Reserve (Fed) announced that they would leave the rates unchanged. Yellen stated that the main reason for the delay of hike was due to the increased volatility in China and other emerging markets’ economies.

In a recent report from the Chief Investment Officer (CIO) of UBS, he reiterated his position on a Fed interest rate increase this year and his support for opportunities in developed economies. Furthermore, billionaire investors Warren Buffett and Carl Icahn have increased their bet in the energy sector.

1)   Equities Market

Source: YTD of DJIA, Nasdaq and S&P 500, Google Finance

In the past month, we saw a strong correction in the major US indices as a possible “Made in China” recession clouded the market. Market conditions swiftly deteriorated further when the Fed’s decision to put a hold on an interest rate hike was announced. This might be a buying opportunity for investors as US equities are expected to grind higher in the six months after the first rate hike happens, supported by economic growth and employment.

Source: YTD of Nikkei 225 & DAX, Google Finance

The CIO of UBS believes that the best opportunity will be in the developed economies as the Fed rate hike is expected to dampen the emerging economies. On the other hand, a combination of monetary easing, currency weakness and cheap oil is expected to boost the Eurozone and Japanese economy.

2) Foreign Exchange

Source: YTD of GBP/USD, EUR/USD & AUD/USD, Google Financ

The rising interest rates will be supporting the USD, which has appreciated against most major currencies since the beginning of last year. Based on forecast from UBS, the Euro is expected to fall to 1.05 against the USD from the current 1.12. However, they are in favour of the GBP to becoming the next major currency that will benefit from the central bank tightening.

3) Energy Market

Source: 1 Year of WTI Crude Oil, Bloomberg

Last month, the energy market began to show signs of recovery as prices of crude oil rebound after it tumbled down since the start of the year. Billionaire investors such as Warren Buffett and Carl Icahn have increased their bet in the sector through companies related to the energy market. Since August, Buffett has been aggressively buying into Phillips 66 while Icahn is targeting Cheniere Energy.

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”.

Trained in fund management, Raymond is familiar with shares and various investment vehicles.

Please click here for more information about this author.

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