Letting off some hot air only?

Many analysts have turned bearish on the plantation sector. They are maintaining their underweight call and are keeping their crude palm oil assumptions of between RM2,500 to RM3,000 per tonne. (refer here - analysts' rationale). However, some says the fall is only temporary and the "hot air balloon"(and not bubble) is just letting of some hot air for the onslaught upwards again. Jim Rogers is one of them. (Refer here also for some of his other predictions). I tend to agree with him as historically, commodities bull cycle generally last at least 20 years!

Bloomberg: Jim Rogers, who in April 2006 correctly predicted oil would reach US$100 (HK$780) a barrel and gold US$1,000 an ounce, said the fundamentals for commodities are ``astoundingly'' good.The bull market for commodities "has a long way to go,'' said Rogers at an investor conference in Australia. The bull market may end by 2020 based on historical cycles, he said. The Reuters/Jefferies CRB Index had its biggest monthly decline in 28 years in July reversing course after its best first half in 35 years. "We are going to have plenty of setbacks in commodities but when they happen please keep your heads about you, do some more homework, and if you decide that thing is still OK I would suggest you might think about buying more commodities,'' Rogers said.

* Anwar to be charged tomorrow for Sodomy No 2. We have a government which is very "obsessed" with Anwar and thinks of nothing but how to stop/silence the man himself. This is definitely very wrong.

* Australia central bank signals first rate reduction in 7 years. As noted yesterday, the drop in the commodity prices will put more pressure on the AUD.

* S&P has upgraded Malaysian shares to"Market Weight" (ie Neutral) from "Under Weight". It also targets KLCI to hit 1,400 points from earlier estimate of 1,300 points.

* Bloomberg: More reported losses. BNP Paribas's (France's largest bank) 2Q net profit fell 34% as it wrote down debt backed by bond insurers and increased risky loans provisions. Cathay Pacific reports first half yearly loss in 5 years on record jet fuel costs.