I just attended the Investment Outlook held by HSBC in Makati Shangrila Hotel semi-annually. And once again, I was served salmon tartine with a sweet slice of pineapple and bits of pear on top for appetizer, tender juicy chicken breast for main course, and chocolate mouse with hints of nuts and strawberries for dessert.
Highlights of the luncheon seminar.
1) More european countries are facing downgrades this year. We are seeing more negative growth in this region. It does not help that their debt % to GDP are fast rising. The root problem of EU countries is the very expensive labor costs, save for Germany. Just for comparison, if US is 100, EU is priced at 140 and Philippines is less than 10. This would mean their exports won't be competitive and would create a lag on their manufacturing sector.
2) Indonesia has been upgraded to investment grade and Philippines is not far behind. We are expecting Philippines to be upgraded to investment grade as well, due to its resilient economy and population. If that happens, there will much capital inflow as funds will be diverted to our country and will do great to our economy.
3) In the U.S., when GDP is low (less than 2.5%) , equity and bond yields are almost the same. The U.S. stocks are currently expensive. Some good buys are MCDonalds and Nike.
4) China will experience a surge in their equity market due to change in leadership that will happen in the 4th quarter of this year.
5) Many may think Germany is well and good right now. But some warning signs come from the rising debt % of GDP, as compared to the debt % of GDP of Scandinavian countries, which are sloping downwards.
6) Expect gold prices to go down. The 4th largest holder of gold is Italy. And Italy may resort to using their gold to solve its debt problems. Gold is a good buy at 1500 level.
7) Choose currencies that have low debt % to GDP because these are the economies that will prove resilient to market volatility like AU$.
Highlights of the luncheon seminar.
1) More european countries are facing downgrades this year. We are seeing more negative growth in this region. It does not help that their debt % to GDP are fast rising. The root problem of EU countries is the very expensive labor costs, save for Germany. Just for comparison, if US is 100, EU is priced at 140 and Philippines is less than 10. This would mean their exports won't be competitive and would create a lag on their manufacturing sector.
2) Indonesia has been upgraded to investment grade and Philippines is not far behind. We are expecting Philippines to be upgraded to investment grade as well, due to its resilient economy and population. If that happens, there will much capital inflow as funds will be diverted to our country and will do great to our economy.
3) In the U.S., when GDP is low (less than 2.5%) , equity and bond yields are almost the same. The U.S. stocks are currently expensive. Some good buys are MCDonalds and Nike.
4) China will experience a surge in their equity market due to change in leadership that will happen in the 4th quarter of this year.
5) Many may think Germany is well and good right now. But some warning signs come from the rising debt % of GDP, as compared to the debt % of GDP of Scandinavian countries, which are sloping downwards.
6) Expect gold prices to go down. The 4th largest holder of gold is Italy. And Italy may resort to using their gold to solve its debt problems. Gold is a good buy at 1500 level.
7) Choose currencies that have low debt % to GDP because these are the economies that will prove resilient to market volatility like AU$.
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