"God of Stocks" tells of pain

The stock markets can really humble a person....the more you learn, the less you know. You can even ask an "experienced" old timer like the god of stocks, Mr Lee Shau-kee; he will agree. The billionaire investor Lee said in May this year his investment strategy will switch to aggressive from defensive in August, and forecasts the Hang Seng Index to hit 30,000 by that time. However, in an actual scenario during that period, the Hang Seng tumbled from 25,000 to 21,000 in August and fall again to 11,000 by end October. It has since recovered to 15,000. Here is what Asia's Warren Buffett or Asia's Master of Stocks has to say now ....

TheStandard: Lee Shau-kee, even after an impressive surge in the stock market yesterday, wants everyone to forget he is known as the "God of Stocks," admitting that followers have lost money after listening to his advice. The Henderson Land Development (0012) chairman, previously tagged as "Asia's Warren Buffett," said he will not predict what level the stock market can go.

"One time, I received letters from investors who followed my opinions. One of them said he lost much money in stocks and asked me to compensate him for some losses," said Lee after the company's annual general meeting yesterday. "That person said he was so pathetic that he borrowed money from relatives to buy stocks and had to repay them. He asked me if I could lend him money."

After an investor asked Lee about his stock picks for next year, he refused to respond. The company's vice chairman, Colin Lam Ko-yin, said: "Lee is not an investment consultant."

Earlier though, the veteran investor said "bliss will come out of the depth of misfortune" for the stock market next year and he hopes it will recover soon. "The market is not as strong as before. I am neither buying nor selling now," Lee said. "Warren Buffett is buying stocks now."

Lee said he has lost much because of the financial tsunami and, even though "the recession has yet to come to an end" in Hong Kong, he expects the property market to improve next year with limited ups and downs. "The property market will remain sluggish in the first half of next year and the market will hopefully recover slightly in the second half if the global economy improves." Lee said the property market now is still better than the market during the SARS period in 2003.

* YahooFinance: Congressional Democrats and the White House worked to resolve their last disputes Monday over terms of a $15 billion bailout for U.S. auto makers -- complete with a "car czar" to oversee the industry's reinvention of itself -- that's expected to come to a vote as early as Wednesday.

* Bloomberg: Japanese economy shrinks by -1.8% in the 3Q (2Q -0.5%) as recession worsens.

* BT(Singapore): The Australian government delivered more than AUD8B in cash payments to families and pensioners from yesterday to stop the economy from sliding into recession and urged people to spend the money ahead of Christmas.

* WSJ: Merrill Lynch and Morgan Stanley will not pay bonuses this year to their CEOs and other top officials.

* Obama to spur the US economy with the nation's largest infrastructure spending in the last 50 years noting the state governors have such projects that are "shovel ready".

* China Daily: China car sales continued to fall in November as the passenger/sedan sales slip by almost 11% year on year. Apparently, the good old days of 20% growth rate has been "driven" away!

Technical Analysis - December 5 2008

S&P500 (876, last week 896 or -2.23% w.o.w )

During the week, the index gave up a small percentage of its gain gathered a week earlier. The daily indicators continued to register uptrend. It is noteworthy to mention the daily index is sitting above the 20-day ema; a task it tries to do since mid November. The ability of the index to stay positive will help the daily indicators turning more bullish and give a more concrete direction for the index which has been rather hard to predict of late. For the weekly readings, the indicators are still showing weaknesses but the MACD is showing signs of bottoming. Support is around 850 and resistance at 940.

KLSE CI (838, last week 866 or -3.2% w.ow)

The daily MACD still remains in the positive but is almost touching the crucial level of negative cross over again due to its listless trading during the week. The MACD Histogram is showing weakness ahead unless the index able to come to life again. The Parabolic SAR continues to issue a negative signal. The weekly charts are still in a negative territory. The index is expected to trade between 800 and 900.

HangSeng (13,846, last week 13,888 or -0.3% w.o.w )

Similar to the S&P500, the daily indicators are doing well and strong. The Parabolic SAR has since turned positive too. It is noteworthy to mention the daily index is sitting above the 20-day ema; a position it has maintained since late November. The next task will be the 50-day ema, which is at 14,883. It would be interesting to see if the daily ADX and DMI indicators can show positive uptrend soon; a position it last register in late July. The weekly charts are still in a negative territory but there seems to be some bottoming process as evident from the MACD indicators. Support is seen at 13,300 and resistance at 15,500.

Nikkei 225 (7,918, last week 8,512 or -6.97% w.ow)

The similarity with HangSeng ended last week. The index seems to be getting weaker and did not recover after a bout of profit takings during the week. The daily indicators eg MACD and MACD Histogram which have decided to go up instead down a week earlier are now in flattish position. The Parabolic SAR continues to issue a negative signal. It is most important the index does come back to life positively during this week if to save the daily indicators from turning bad this week. The weekly charts are still in a negative territory. The index is expected to trade between 7,500 and 8,500.

* Asian and European markets are flying on hope of global stimulus plans to boost world growth. Is the worse over already?

Smart Investing/Trading for the week ending December 5 2008

Weekly US markets update and outlook

Washington may steal Wall Street's limelight
With no relief seen in economic data, eyes turn to more federal bailouts

Marketwatch:Stock investors can expect little relief from economic data or corporate reports in the week ahead, making Washington's efforts to fix the broken credit system the one possible bright spot.

The Dow Jones Industrial Average and S&P 500 come to grips with the magnitude of the problem, tumbled last week as a drumbeat of bad economic and corporate news increased the likelihood the U.S. economy was in the midst of a severe recession.

"It looks like the market is starting to are already starting to get baked into prices," said Russ Koesterich, head of investment strategy for Barclays Global Investors. Economists don't see much moderation on the recession front for the week ahead. Retail sales and consumer sentiment reports are expected to show large drops and multi-decade lows. Wholesale prices are forecast to have retreated -- generally a good sign -- but one that's due to plunging oil prices. Prices have dropped as depressed consumers and manufacturers have used less.

Similarly, the handful of companies scheduled to report earnings - including consumer-oriented firms H&R Block, Inc. Costco Corp. and CKE Restaurants -- will be hard-pressed to find something good to say about the U.S. spending environment. Their reports will follow the worst monthly job loss and the grimmest month for same-store sales in more than three decades.

The dismal economic and corporate outlook leaves the heavy lifting to Washington, D.C. Lawmakers are debating bailout requests from struggling carmakers General Motors Corp., Ford Motor Co. and Chrysler LLC

Also, investors will be keyed into any announcements from President-elect Barack Obama or House Speaker Nancy Pelosi, D-Calif., on the direction of another fiscal stimulus package.

And the Treasury and Congress are expected to make further proposals on direct aid to mortgage markets, say economists at IHS Global Insight. Announcements about an alphabet soup of programs to lower borrowing costs and make loans more available have rocked credit markets in recent weeks. Some of these programs have started to achieve their ultimate purpose -- driving rates down. Spreads to Treasurys on mortgage-backed securities and debt issued by Fannie Mae and Freddie Mac have fallen sharply since the Fed said it would buy this debt Nov. 25. Mortgage rates dropped to 5.53%, a January low.

Treasury yields have also sunk, to historic lows, with declines hastened by Fed Chairman Ben Bernanke's comments Monday that the Fed might buy up Treasurys to push rates down. But borrowing costs for companies whose debt isn't backed by the U.S. government have risen in many cases. That's one more sign that risk fears are still running high, say strategists. "You'll know when risk appetite comes back into the market when yields on Treasurys start to back up," said Koesterich. The 10-year Treasury yield last week hit 2.655%, the lowest since at least 1955. Thirty-year bonds touched 3.165%, the lowest since at least 1977.

Still, a rally in stocks on Friday, the same day the Labor Department said the U.S. destroyed 553,000 jobs last month, have given some strategists reason hope for a turnaround. "In view of the 'mild' reaction to the U.S. employment report today, a modest increase in risk appetite between now and the end of the year is still not completely out of the question," wrote Stephen Gallo, head of market analysis at Schneider Foreign Exchange Ltd. More willingness to take on risk usually bodes poorly for the U.S. dollar. Like U.S. Treasurys, it's benefited from a flow into safety assets.

The U.S. dollar index gained 0.6% last week. Despite a nearly 260-point, or 3.1%, gain on Friday, the Dow-30 ended the week 2.2% lower. The S&P 500 lost 2.3%.

Oil futures plunged 25%, their worse weekly loss since Jan. 1991.

Weekly KLCI Update and Outlook

ICapital: The KLSE CI is below its 30-day, 50-day and 50-week moving averages. Its daily MACD is struggling to stay bullish and its DMI is bearish.

This week, we continue to see endless developments such as the continued bailout of the US economy, interest rate cuts by China, BOE, ECB etc leading to a short-lived rally. Locally, Bank Negara also lowered its OPR to 3.25%, the first reduction in more than 5 years. However, the KLSE CI still ended lower in lacklustre trade. Technically, the weekly MACD is still bearish but it has stalled its fall. Has it reached a bottom or has it not?

* Tmn Bkt Mewah, Ampang landslides kills 4 people and evacuated thousands of residents. (site is just a few kms away from the Highland Towers disaster in 1993 where 48 people were killed. PM: Stop all hillside projects! I am quite sure we will very soon forget about it and happily approving it all over again!

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* Despite Paulson(US)'s calls for stronger RMB, some analysts were of the opinion it will not happen so soon as the currency is set to depreciate further. This is in view of the declining China exports and easier to tame inflation.

* TheStar Biz: South Korea's forex reserves fell to new lows with a drop of USD11.7b in November to USD200b (lowest since January 2005 when it was at USD199.7b). Japan's forex reserves meanwhile touches USD1T in November (October USD977.72b) on US Treasury gains as it came with lower yields.

Bloomberg: Interest rate cuts everywhere! Egs: NZ cuts its key interest rate to 5% from 6.5%. Thailand cuts its benchmark interest rate to 2.75% from 3.75%. UK cuts interest rate to its lowest since 1951 to 2% (from 3%) while ECB cuts to 2.5% from 3.25%.

* Bloomberg: Jim Rogers says commodities fundamentals are unimpaired and prices will rebound when a lack of new supply leads to shortages. Still so bullish?Merrill Lynch is predicting a USD25 per barrel for oil next year if China economy slumps. Oil is nearing USD40 per barrel now.

* US lawmakers will vote as soon as Tuesday on a proposal being worked out this weekend to help save the failing US carmakers.

Cyclical Bull in Secular Bear markets

Everyone agrees that we are in a bear market. Prices are down badly and almost everybody wishes they did not dabble with stocks in the first place. Here is an article which provides some useful historical analysis of the US bear markets since the 1900. It defined the bear periods categorising them as secular and cyclical and identifying cyclical bull within the secular bear markets. It also provides some important features of the beginning and ending of a secular trend. Importantly, it was aimed to highlight investors opportunities in a Bear Market, if any. The final decision to buy stocks for the next cyclical bull is yours and it would be good if the buys are at least supported by fundamental and technical analysis, knowing the bigger picture and an exit plan, of course.

BizWeek: It has been a rotten time to be an investor. But Ned Davis Research, a financial research firm in Venice, Fla., has some good news: In times like these, during a decidedly bear market, one often gets big upswings. NDR's chief investment strategist, Tim Hayes, looked at the four secular bear markets since 1900 (as he measures them, they came in 1906-21, 1929-42, 1966-82, and 2000 to the present) and has defined 18 cyclical bull markets that took shape within them. (The defining characteristic of a secular bear market is that it starts with a bubble and ends with no one interested in stocks, Hayes says, and they typically last more than 10 years; a cyclical bull market is shorter and may occur within either a secular bull market or a secular bear.) The median upswing was 371 days, and the median rise of the Dow Jones industrial average was 55%.

BusinessWeek's Amy Feldman spoke with Hayes about secular bear markets, cyclical bull markets, and what these patterns mean for investors.

Are we headed for a lost decade?

I wouldn't say we're heading into one—we've been in this environment since 2000. Since January 2000 the annualized return of the Dow was -4%, and after inflation it was -7%. We don't think we're at the end of this secular bear market, but that doesn't mean there isn't a good cyclical opportunity.

What has happened in secular bear markets in the past?

These things go on for many years. The last went from 1966 until 1982. Some people compare today with the 1930s, a time characterized by deflation and the stock market crash. Now is closer to the 1970s in terms of market action, but there are differences in the secular trends. While commodities today have had a big decline, they have maintained their long-term uptrend. We've called that a cyclical bear market in a secular bull market.

When will the secular bear market end?

Secular trends typically end when valuations go to an extreme. You start to have a price-earnings ratio so low—typically single digits—that it cannot get lower at the same time that earnings are actually growing relatively well. When people have given up on stocks, you have reached the end of the secular trend. Our measures say we are about halfway down from the bubble of 2000. If you date this secular bear market from the beginning of the decade, you still have five years to go, maybe longer. It could end up being more like the second half of the 1970s, when the real damage was done in the first half of the secular trend and then you go through a long consolidation, or recovery, period.

With markets falling around the world, is there any reason to invest globally anymore?

seen correlations [between the U.S. and international markets] tighten up, as they tend to do at the end of a decline. But there will be longer-term opportunities in emerging markets and China, where the long-term case remains favorable. China is not in a secular bear market. It has been in a cyclical bear market within a secular bull market. While markets around the world will move in one direction when we get the next move higher, the upside will be much greater in the markets in secular uptrend, like China's.

Where's the upside at home?

You could get a cyclical bull market, where valuations expand for a period of time. The median cyclical bull within a secular bear is a rise of 55%. There have been 18 cases of this. So we are pretty hopeful about the next six to nine months.

Surprisingly, UBS has today boldly predicted that "Stocks will surge in 2009, S&P500 may climb 53% to 1,300! (read here for details) They must have read this article in the BizWeek!

* Umno sacks Zaid.

* China's sovereign wealth fund, CIC, which last year invested USD5b into Morgan Stanley, is reluctant to plow more money into foreign financial institutions until governments hash out coherent policies to cope with the global economic and financial turmoil.

* Bloomberg: GM seeks USD4b to survive the balance of days in 2008 and USD18b in total US assistance.

* BT: Now Tunku Imran quits Petra Group even after Bruce Willis has decided not to sue the Group! Enough is enough! !

* Another cut in fuel prices yesterday. Ron 97 is now RM1.90 (from RM2), Ron 92 and Diesel RM1.80 (from RM1.90)

NBER's announcement comes early

What a fiery start for the US markets this December month; a month of holidays, bonuses (if any) and window shopping, or rather dressing! The first day of trading resulted a loss of nearly 9% in a single trading session for the S&P500! This is in stark contrast compared with the performance during the whole of last week- a 12% gain. The selling particularly in the afternoon session is probably due mainly to the National Bureau Of Economic Research's (the economic panel recognised as the arbitrator of business cycles) announcement that the US has entered recession in December 2007 (refer also here) based on its measures of income, employment and other factors.

The NBER's pronouncements historically come long after recessions have begun. (discussed here before in this blog). Yesterday's announcement probably surprised everyone as the US has not fallen into recession yet, technically speaking.(ie continuous 2 consecutive Quarters of negative growth). In fact, basing on the passed announcements, almost all of NBER's announcements come late either when the economy is at the tail end of recession or right after recession. Does it means that the "recession" in the US is ending or at its tail end? Does it means that the "recession" has probably ended without the economy falling into technical recession? I really doubt so.

Why is the announcement coming in early this time is interesting. Three simple deductions can be made from the early announcement. One thing for sure, I believe the NBER is very worried about the current state of economy and the numbers are worsening at a rapid rate that policy makers and public needs to be warned and be prepared. Secondly, the usual argument that the recession will be over or already over as soon as the announcement from NBER is officially out may no longer be valid. This is because based on the economic data that are coming out for the passed half a year or so, things are expected to get worse before stabilising. We are still not at the end of the tunnel yet. Thirdly, be prepared to wait longer this time for the recovery in the economy and the financial markets compared with other past recessions.

* Thailand's 2nd PM in 3 months Somchai is ousted by court today!

* Oil falls to USD47.36 barrel!

* Central Bank rates at a glance. NZ 6.5%, ECB 3.25%, US 1% and Jpn 0.3%.

* RBA cuts its interest rate by 100 basis point to 4.25% today.

Technical Analysis - December 1 2008

S&P500 (896, last week 800 or +12% w.o.w )

Last week saw a major reversal for the index. It did a drastic U-turn with a weekly gain of 12%. As a result, the MACD cuts up again with a positive crossover 3 sessions ago. The Parabolic SAR has just turned positive 1 session ago. A word of cautious though, the Stochastic Oscillators are at its recent high and some profit may be taking place this week. The ability of the index to stay positive will help the daily indicators turning more bullish and give a more concrete direction for the index. For the weekly readings, the indicators are still showing weaknesses. Support is around 850 and resistance at 940.

KLSE CI (866, last week 867 or -0.00% w.ow)

The daily MACD remains in the positive and managed to gain a little strength with a dismal performance last week. However, the Parabolic SAR continues to issue a negative signal. The weekly charts are still in a negative territory. The index is expected to trade between 830 and 950.

HangSeng (13,888, last week 12,659 or +9.7% w.o.w )

Looks like the daily indicators eg MACD and MACD Histogram have decided to go up instead down when they touches the decisive and crucial level last week. However, the Parabolic SAR continues to issue a negative signal. The weekly charts are still in a negative territory. Support is seen at 12,200 and resistance at 15,000.

Nikkei 225 (8,512, last week 7,911 or +7.6% w.ow)

Similar to the HangSeng index, the daily indicators eg MACD and MACD Histogram have decided to go up instead down when they touches the decisive and crucial level last week. However, the Parabolic SAR continues to issue a negative signal. A word of cautious though, the Stochastic Oscillators are at its recent high and some profit taking be taking place this week. The weekly charts are still in a negative territory. The index is expected to trade between 8,000 and 9,300.

* XFN: China is not facing major bubbles, adjustments "benign"-Central Bank adviser Fan Gang.

* XFN: 2009 growth seen at 10% and CPI at 3%-State Councils Development Research Centre researcher Zhang Ligun.

* Sounds familiar? The Standard: Canada's opposition parties have agreed in principals of a deal to topple the newly elected government arguing the government lead by PM Stephen Harper has no solid plan to deal with the current global economic crisis.

Smart Investing/Trading for the week ending November 28 2008

US markets update and outlook





Stocks seek more gains on hopes worst is past
U.S. jobs report on tap along with interest rate decisions in Europe

MarketWatch: Stocks will enter the month of December with a sense of optimism that much of the dismal environment for corporate profits has already been discounted by the market, even as upcoming reports, including the key jobs report on Friday, are expected to show the economic picture is still worsening.

Next week, "we'll have a slew of economic numbers, including what I expect to be a rise to 6.7% in unemployment in November," said Peter Cardillo, market economist at Avalon Partners. However, "the market has already priced in another quarter or two of real bad economic news, and that things could start to stabilize in the second quarter" of next year, he said.

Dow's best 5-day gain ever

The market gained on so-called Black Friday, marking its fifth-straight session of gains, with grim prospects for retailers failing to dent optimism at the traditional start of the U.S. holiday-shopping season. The Dow Jones Industrial Average finished up 102 points, or 1.2%, at 8,829. While the blue-chip average fell 5.3% for the month of November, it jumped 9.2% over the past week. Even more impressive, the Dow gained 1,277 points, or 17%, in just five sessions, marking its best five-day percentage gain since 1932, and its best five-day point gain on record. The S&P 500 Index rose 8 points, or 1%, to 896 Friday. The broad index fell 7.4% in November, but it surged 12% for the week. The Nasdaq Composite Index gained 3 points, or 0.2%, to 1,535. The technology-heavy index jumped 11% for the week and had a monthly loss of 10.8%.

A turning point for the market seemed to start a week ago, with the market gaining more confidence as President-elect Barack Obama began unveiling his economic team. On Wednesday, Obama appointed former Federal Reserve Chairman Paul Volcker to head a newly created White House advisory post. "The pool of people the president-elect has chosen has been greeted well," said Ken Tower, market strategist at Quantitative Analysis Service. "Restoring confidence is an important step for the markets and the economy." Adding to the positive tone, the government stepped in to bailout Citigroup Inc., which allowed shares of the ailing bank to rebound 120% over the past week after plunging below $4 amid fear about its future. And continued hopes for a bailout of the U.S. auto industry also helped shares of General Motors Corp. to rebound over 70%.

On Tuesday, GM, Ford Motor Co. , Chrysler and other automakers will post what are again expected to be dismal U.S. sales for the month November. Over the past week, the Federal Reserve also announced it would spend $800 billion to buy debt in order to lower borrowing costs for consumers and home buyers. The move helped to send the yields on 10-year government bonds, which are used to benchmark mortgages, below 3% to their lowest level on record. "The market is getting the message that we're looking at a stabilization process," said Avalon's Cardillo. "The credit markets are likely to be behaving in a more normal way towards the end of the year." On Thursday, Fed Chairman Ben Bernanke is also expected to speak on housing at a Fed conference in Washington.

Data, central banks

On Monday, the Institute for Supply Management will release its manufacturing survey for November. Construction spending figures for October will also be released. Tuesday will feature U.S. auto sales while Wednesday will bring the November ADP employment survey of the private sector, productivity figures for the third quarter and the ISM's November survey of the service sector of the economy. Also on Wednesday, the Fed is expected to release its Beige Book of economic conditions, which is "likely to paint an even bleaker picture than the October report," as it captured a near seizure in credit markets "and the resulting knock-out punch to consumers and businesses," said Sal Guatieri, senior economist at BMO Capital Markets. On Thursday will be weekly jobless claims. Federal Reserve Chairman Ben Bernanke is also expected to speak on housing at a Fed conference in Washington. Also on tap, the European Central Bank and the Bank of England are expected on Thursday to make decisions on interest rates. Friday will bring the jobs report. BMO Capital expects the economy to have shed 350,000 jobs in November, and the unemployment rate to have risen to 6.8%, from 6.5% in October.

Weekly KLSE Plantation Index Update and Outlook

ICap: From a technical standpoint, the Plantation Index is now trying to engineer a rebound as it has been consolidating for about a month. Its weekly stochastic oscillator has finally strengthened to the neutral position after being flattish for three months. Its weekly MACD is also showing an initial uplift from the deep bearish territory. It looks like there is potential for further recovery. The Plantation Index has been moving in tandem with oil price, and thus, it is crucial for oil price to regain its glory to boost up the index. Are we still far away from this or is the selldown in commodity prices overdone?


* GM ends an endorsement deal with Tiger Woods worth USD7m per year to cut cost in order to survive in the prevailing market condition. Tiger has been with GM for the last 8 years.

* Malaysia's economy posted a growth of 4.7% in Q3(Q2 6.7%)

* Zeti: Malaysia will not slip into recession.

* BT: Genting getting more downgrades from research houses. Citi TP for Genting RM3.79 (from RM3.88) and JP Morgan TP RM3.70 (from RM6.40)

Happy Franksgiving!

According to Wikipedia, thanksgiving is a harvest festival. Traditionally, it is a time to give thanks for the harvest and express gratitude in general. It is primarily a North American holiday which has generally become a national secular holiday with religious origins. Here is an interesting article about thanksgiving, or rather franksgiving and its relevance to the era of Great Depression. Why you may ask? Kindly read on......

Franksgiving - one more lesson from the Great Depression

Faced with the scale of the current financial crisis, many economists have turned to the Great Depression to look for policy lessons. Tyler Cowen, a professor at George Mason University, shared his thoughts on the topic recently in the New York Times. His take? The New Deal Didn't Always Work, Either. Faced with an unprecedented crisis, Roosevelt experimented with a mix of policies, and some worked and some did not.

Here's one of the (now long-forgotten) policies that did not work: Franksgiving. Nowadays, the U.S. celebrates the holiday of Thanksgiving on the fourth Thursday of November. It wasn't always that way, though. Traditionally, Americans celebrated Thanksgiving on the last Thursday of November. Every few years, there are five Thursdays in the month of November, and 1939 was one of those years. Unfortunately for retailers, this meant that the Christmas shopping season would be very short.

Enter Lew Hahn, general manager of the National Retail Dry Goods Association. He suggested that the date of Thanksgiving be moved forward to help boost retail sales. In late October 1939, Roosevelt announced that Thanksgiving would be on November 23 rather than November 30. National outcry ensued, and Thanksgiving was christened with the name Franksgiving (after Roosevelt's first name). Alf Landon, Roosevelt's opponent in the preceding election, compared Roosevelt's actions to Hitler's:

"If the change has any merit at all, more time should have been taken working it out... instead of springing it upon an unprepared country with the omnipotence of a Hitler."

The result? At least according to Wikipedia(no citation is given), the Commerce Department found no significant expansion of retail sales. The only lasting consequence is that Congress eventually changed the law to establish the fourth Thursday of November as Thanksgiving. This year Thanksgiving falls on the 27th, so Americans will have just under four weeks for holiday shopping. Perhaps it won't be enough to revive the global economy, but it's better than only three weeks.

By Ryan Hann (http://psdblog.worldbank.org/psdblog/2008/11/franksgiving--.html)

* Violence brewing in Asia- India and Thailand.

* Financial markets seem to be on the rise again? Defying the gloomy economic pictures and technical charts....

* FT.com: The cost of shipping dry bulk commodities such as iron ore, coal and grains plunged to a near 22 year low on Wednesday. The Baltic Dry Index fell 5.1% to 762, lowest since January 1987. The index has tumbled 93.5% from all time high of 11,793 points in May.

*TheStar: Local steel makers are making provisions for their inventories following sharp decline in prices of raw materials and finished products. Perwaja wrote off RM120.2m while Choo Bee RM22.3m.

* Bloomberg: The People's Bank of China yesterday cut its 1 year lending rate by 108 basis points to 5.58%. Slow growth is worrisome in China.

* Bloomberg: China's foreign reserves now top US2T!

Bailouts bring the bottom in sight?

The recent series of bailout plans brokered by governments have somewhat sooth and relaxed the nerves of many wary investors. Citigroup's financial woes were taken calmly by investors as they correctly predicted that the Government will step in. Is the worse over and have the bailouts bring bottom in sight as hailed by many analysts recently? In the short term, yes but for the longer term, I really doubt so. The financial rut is far from over and many economies have just begun feeling the pinch of global slowdown. The drop in property prices in China and unemployment woes will probably be the next big issues to unfold. Others even boldly predicted the collapse of USD and long dated US bonds etc.

Interestingly, we are beginning to witness the calling off of large Merger and Acquisition activities which were proposed earlier before the financial crisis went global. Yesterday, we were made known the calling off of the proposed USD66b takeover bid by BHP for its rival miner Rio Tinto. BHP's shares rose 10% in the early trading in London yesterday while Rio's shares dropped 40%. Also, as announced after trading hours yesterday, MISC's RM3.2b reverse takeover of Ramunia also fall apart. Similarly MISC's shares price went up 6% today's afternoon while Ramunia's went limit down twice with a 53% drop. Although the buyers above(BHP and MISC) cited other reasons for the failed plan, it is a known fact that the both the M&As failed due to the continued declining of commodities prices and turmoil in the financial markets. Take oil for an example. The price is now 40% below its opening price for the year while it has dropped 60% of its July peak.

So if the above two examples are of any indication M&As activities were to slow down or coming to a stand still, how can the financial markets have reached its bottom yet and our worse woes are over?

* TheMalaysianInsider: Tourism Malaysia will advertise "Malaysia-Truly Asia" through Australian Football club Carlton Blues's jersey for AUD1m? Currently, the Blues are ranked 11 of the AFL's standing.

* US Q3's GDP growth falls 0.5% amidst sharpest contraction in consumption since 1980.

* Bloomberg: Fed risks "spitting in the wind" with the new USD800b pledge.

* Indonesia considering a USD3b crisis loan to help the county whether the global financial crisis.

More on Bursa Trade Securities

As mentioned last week, Bursa Trade Securities, a new trading system for Bursa will be implemented next week, Monday December 1 if this Saturday's final test run goes smoothly. Since this new system, the fourth for Bursa, is new to everyone, it would be advisable for Bursa to quickly and aggressively inform the public and the users (brokers, remisiers, dealers and investors who may be trading from the internet or simply for viewing purposes only) the salient features of the system. Like any new systems, familiarisation is needed for brokers and investors. Borrowing the words from Bursa's general advertorial out only today, "Investors should note that understanding and utilising an extremely fast system requires added vigilance and care on their part to reduce transactional errors"

The practical features of Bursa was mentioned here before and it would be good to relook at them again. Below are further practical features/information on Bursa Trade that I am aware of recently and wish to share with you. Like anyone else, I am totally new with this system and you may have to verify yourself the correctness of the information provided below or may want to add further comments on the features of the system here.

1) For Remisiers/Dealers-your trading screen needs to be reset again (one off only) to incorporate some additional fields eg Theoretical Opening Price and Theoretical Closing Price, Odd Lots/Buyin and Stock Status-which provides details of Reserves and Suspension details.

2) For Internet Users-your e-broking houses will guide you via their website to a new trading platform.

3) Odd lots orders will need to be carried forward to the next trading session unlike the previous system.

4) Off market trades (or DBT-Direct Business Trade)

-No more upper/lower limit 10% of price to be traded for shares RM1 and above. The limit has been lifted to 15% in the new system. For share price below RM1, the upper and lower limit has been changed to 15 sen.

-Any trades more than 15% up to 99% in price requires Bursa's approval which will come within 3 market days(previously 10 market days).

-If DBT is to be done between 830am to 10am, PriceWap(information available from Trading Department) will be used while after 10am, VolWap will be used (available on the trading screen, calculated hourly).

-DBT can be done during lunch time.ie 1230-230pm.

-once DBT is done, the buyer/seller cannot be amended anymore.

5) Trade cancellations

-According to circulars from Bursa RR10 and RR11, there are 3 ways Bursa can cancel trades in the market. (i) If it is Bursa's own mistake, 2) If both parties (buyer/seller) agree to cancel the trade -but a penalty of RM1,000 per cancellation must be borne by the party who did the mistake and 3) If Bursa suspects the trade is tantamount to manipulation, market rigging and no change in beneficial ownership. Bursa can cancel the trade at anytime before T+3.

Kindly also refer to http://www.bursatrade.com/ for further information.

* Snows bury Northern Europe!! (picture China Daily)

* Bloomberg: London, Midtown Manhattan, Tokyo office rents post first drop since 2002.

* Bloomberg: Qantas says profit may fall 64% in this financial year.

* TheEdge: Temasek agrees to subscribe at least USD542m of Standard Chartered's Rights Issues. It currently owns 19% of the bank.

* This is worrisome. World Bank says China's 2009 GDP growth expected to slow to 7.5% (from 9.2%) as economic crisis spread. (CNBC)

* Finally BNM did what other central banks have been doing. OPR has been reduced by 25 basis points to 3.25%. Also the SRR has been reduced to 3.5% from 4%. The last SRR cut was in September 1998. According to analysts, the reduction will affect mainly banking and consumer related sectors.

* MISC's proposed RTO of Ramunia is off due to unsatisfactory due diligence findings!!! This is going to be bad for Ramunia and shareholders. Seems that everyone is caught unaware!!