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Friday 18 December 2009

QROPS ADVICE: Investment News: BULL MARKET INTO 2010

Asian stocks outside of Japan may extend a bull market into 2010, helped by declining risk premiums, a recovery in economic and earnings growth, and low interest rates, according to JPMorgan Chase and Co. The MSCI Asia-Pacific excluding Japan Index may climb to 530 by the end of next year, JPMorgan analysts led by Adrian Mowat wrote in a report on Tuesday, representing a gain of 29 percent. They cut their rating on Thai shares to "neutral" from "overweight." The global economy should grow 3.4 percent next year, including "above consensus" expansion of 3.3 percent in the U.S. and 2.6 percent in Europe, benefiting demand for the region's exports, according to the report. Interest rates in the largest developed economies are also likely to stay unchanged next year, the brokerage also said.
India's local-currency rating outlook was raised to positive from stable by Moody's Investors Service, which cited a strengthening economic recovery. The change was "prompted by increasing evidence that the Indian economy has demonstrated its resilience to the global crisis and is expected to resume a high growth path with its underlying credit metrics relatively intact," Moody's analyst Aninda Mitra said in a statement on Tuesday. Moody's action comes after India's USD1.2 trillion economy expanded 7.9 percent in the three months to Sept. 30 from a year earlier, the quickest pace in six quarters. Only China grew faster in the region, with gross domestic product increasing 8.9 percent. Moody's has a Ba2 rating on India's local debt.
US retail sales in November again rose by more than expected, according to official figures. Sales rose 1.3%, the biggest gain in four months, the Commerce Department said, after retail sales in October climbed 1.1%. Petrol sales jumped 6% and sales of cars, building materials and other goods helped push up the data. Separate data also provided a boost for retailers, with the Michigan consumer confidence index rising sharply.
Brazil's central bank will keep the benchmark interest rate at a record low through 2010 because concerns that inflation will accelerate are "exaggerated," according to Daniel Tenengauzer, head of emerging-market fixed income and currency at Bank of America. Consumer prices will rise 4.5 percent next year compared with 4.31 percent in 2009, according to a central bank survey of about 100 economists published on Monday. Inflation expectations are overstated because "economic activity is not as strong as people think," Tenengauzer added.
Forecasts for annual contract prices for iron ore, a USD160 billion-a year-global market, were raised by Macquarie Group Ltd. and JPMorgan Chase & Co. after a surge in demand from China. Steelmakers and traders in China, the world's biggest consumers, boosted imports 12 percent last month to meet demand from makers of cars and appliances. Iron-ore demand from U.S. and European steelmakers will also increase next year, joining China, Vale SA, the world's largest producer, said on Tuesday.
The dollar rose to a more than two-month high against the euro amid speculation improving economic data in the U.S. will spur the Federal Reserve to signal an exit from easing policies intended to combat the recession. The U.S. currency climbed against 14 of its 16 major counterparts after futures indicated a 48 percent chance that the Fed will raise its key rate by at least a quarter-percentage point from near zero by June. The Australian dollar fell after the central bank said its decision to raise borrowing costs two weeks ago for a third straight month gave policy makers increased "flexibility" at future meetings.

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