Views by market research analysts, would the Snake bite 2013?

The 12-year zodiac has turned from the last year dragon to Snake 2013. Would the snake bite as the snake's reputation might be? Remember 2001 was the year of the 9/11!

Welcome to Year of the Water Snake! Snake is the Yin to last year's Dragon Yang. That said, Snake does not settle for mediocrity, either. We're likely to see significant developments in the area of science and technology this year. Research and development are apt to flourish. This is a Water year as well, the element most closely associated with education and research, making 2013 a very special year for scientists and scholars. Snake is a great sign, a positive one, with energy that can help us face all of the challenges ahead of us. Let's take advantage of this vibrant influence to improve our lives -- and our world!

THE world markets have always been a subject of focus whenever a brand new year comes a-calling.

Will they perform well or are investors in for a tough time?

As usual, while some have looked to the study of feng shui to predict how markets will perform and react in this Year of the Water Snake, a few analysts and fund managers have mostly chosen to stick to regular facts and figures when giving their opinions.

Here are the views of some of them randomly selected by StarBizWeek.
VINCENT KHOO
Head of research
UOBKayHian Research

Do you believe in using feng shui to predict market movements?

For fundamental research, we do not take feng shui into consideration

What are your top picks in the Year of the Snake? Why?

The over-riding investment theme for the year's market is laggards. Market laggards dominate our “buy” list.

We also advocate three categories of stocks to focus on for timing purposes. These are stocks which are immediate “buys” such as high-yielding stocks including number forecast operators and construction stocks, noting that positive newsflows are already emerging, stocks to accumulate on slight weakness such as telecommunication stocks, and stocks to accumulate on deeper retreats, such as the perceived politically-linked stocks which feature exciting growth prospects

Our contrarian view includes being overweight on construction stocks.

What are some of your “predictions” for financial markets this year?

The local market has predictably fallen after a short year-start rally. We expect a significant retreat in small-mid caps after an impressive January-Effect' rally. We also expect market to dip further before elections, but downside is limited, and it should recover significantly thereafter.

THOMAS YONG
Chief executive officer
Fortress Capital Asset Management (M) Sdn Bhd

Do you believe in using feng shui to predict market movements?

We don't use feng shui in our work.

What are your top picks in the Year of the Snake? Why?

In Malaysia, our top picks are UMW Holdings Bhd and CIMB Group Holdings Bhd. Despite a return of 70% in the year of 2012, we think that the prospects for UMW continue to remain bright.

The automotive division has been performing well as its Toyota brand continues to gain market share, while the Perodua brand dominates the budget segment.

Earnings contribution from the oil and gas division has improved vastly and the earnings momentum is likely to pick up in coming years, buoyed by the potential of raising funds via an initial public offering.

In the near-term, weakening of the US dollar and Japanese yen arising from quantitative easing would also be favourable to UMW Holdings.

CIMB Holdings has been delivering consistent earnings but its share price has under-performed the market, due to political concerns in Malaysia.

The group actually derives about 40% of earnings outside Malaysia and the overseas earnings contribution is expected to increase further with the strategic regional expansion.

Besides positive enhancement of the CIMB brand, its recent acquisition of Royal Bank of Scotland investment banking operations has also provided CIMB Group with an established platform to compete internationally.

Notwithstanding the solid fundamentals of the two stocks, one need to be cautious in determining the entry level for the stocks in light of the recent market volatility on the back of election politics.

What are some of your “predictions” for financial markets this year?

As the US and Japan are expected to continue with quantitative easing, we expect interest rates to stay low for the year 2013, stoking asset inflation.

While alternative investment such as property has traditionally proven to be a good asset inflation play, the sector will likely face continued policy curbs.

Taken with sight of economy recovery led by China and the United States, we believe equity as an asset class provides a very attractive risk return potential.

HWANGDBS VICKERS RESEARCH
MALAYSIAN RESEARCH TEAM

Do you believe in using feng shui to predict market movements?

Feng shui is just an additional tool used to make certain predictions.

Our bread-and-butter research approach has always been fundamental analysis supported by technical analysis.

What are your top picks in the Year of the Snake? Why?

Against a turbulent market backdrop, the benchmark FBM KLCI could swing between 1,500 and 1,750 going forward, and probably settle at our fundamentally-driven end-2013 target of 1,690 (based on one-year forward P/E of 14 times.

Hence, investors should view any market dips as buying opportunities to ride on the subsequent recoveries.

The Year of the Snake may bring good luck to industries linked to earth, metal and water elements, such as property, construction, petroleum and banking.

By being defensive, investors are expected to flock to sectors or stocks that generate strong operating cash flows and pay appealing dividend yields such as Pos Malaysia, Maybank and KLCC Property, to name a few.

What are some of your “predictions” for financial markets this year?

On the global economic front, we should see continuous gradual recovery supported by an underlying positive mood.

The recurrence of an economic fallout in the United States or a financial blow out in eurozone can happen, which can then force a downward spiral in investors' confidence.

KALADHER GOVINDAN
TA Securities
Head of research

Do you believe in using fengshui beliefs to predict market movements?

I wish predicting market behaviour could be that easy. Feng shui or even the much older Indian version, Vastu, for that matter gives you a “common sense” perspective on how certain things should be done in harmony with nature to reap the maximum benefits for health and well being but it is not a single criterion that binds everything for success or wealth.

What are your top picks in the Year of the Snake? Why?

Sell-on-strength, especially overvalued defensive plays in the consumer, healthcare and telco sectors, and turn cash-heavy to accumulate high beta plays in domestic sectors, which are mainly related to construction, oil and gas and property sectors, in the first half of 20 13. The banking sector holds good buys based on their attractive valuation, still robust loan growth and bright chances of benefiting from ongoing domestic expansion .

What are some of your “predictions” for financial markets this year?

Issues in Europe will last longer. The structural flaws cannot be undone overnight but expect bouts of positive improvements to kick in the second half of 2 013 as fats are trimmed and jobs created. China could revive its domestic growth without stoking inflationary pressure but it can be a destabilising factor if its row with Japan escalates. The same applies to Iran and the West.

LIM TECK SENG
Deputy managing director
JF Apex Securities Bhd

Do you believe in using feng shui to predict market movements?

Not at all.

What are your top picks in the Year of the Snake? Why?

I prefer good value penny stocks because the capital appreciation of these stocks are much faster and larger, compared to bigger-cap stocks. Stocks are all about packaging, style and branding.

What are some of your “predictions” for financial markets this year?

Financial markets revolve around banking, wealth management and the economy.

It has nothing much to do with stock markets. The stock market is all about liquidity and cashflow.

If there is enough liquidity, cashflow and interest in the stock, the stock will run. Liquidity is the most crucial component to the stock market.

EDMUND THAM
Head of Research
Mercury Securities

Do you believe in using feng shui to predict market movements?

Some people may use it, but I personally do not use feng shui to predict the market.

What are your top picks in the Year of the Snake? Why?

Currently I'm looking at property and crude palm oil (CPO) stocks, for both value and dividend yield.

The prices of quite a number of them have come down recently. However, they have the potential to “come back” later in the year. CPO stocks would probably only come back later in the year if and when CPO prices recover.

Property players with projects in prime areas locally (Penang island, Klang Valley, Iskandar Region) and overseas stand to perform well.

CPO picks - IOI Corp Bhd, TDM Bhd, TH Plantations Bhd, Hap Seng Plantations Holdings Bhd.
Property picks - Glomac Bhd, Mah Sing Group Bhd, SP Setia Bhd, UOA Development Bhd.

What are some of your “predictions” for financial markets this year?

For the local market, less volatility could lead to a higher KLCI level, especially in the first half of 2013.

The cautious investor sentiment due to GE13 is likely to suppress market participation for Q1 and maybe Q2.

The Dow Jones is at quite a lofty level, and we're not sure if it can be sustained above the 14,000 points level.

By YVONNE TAN yvonne@thestar.com.my 

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Can money buy happiness?

Two thirds of people worldwide "need to live better"

Whether or not money can buy happiness, people worldwide seem to think it can, at least according to a new poll that canvassed respondents in two dozen countries.



Nearly two-thirds of about 20,000 people surveyed said they "need to live better," the survey by market research company Ipsos showed, while one-third said their life was fine the way it was.

Given a list of factors for improving their well-being and quality of life, 89 percent said a stronger economy in their country was very or somewhat important -- the top response.

Better living conditions and stronger family relationships were named by 84 percent, while only 56 percent listed finding a romantic partner, and 49 percent included meditation or prayer.

Lifestyle factors such as eating better, sleeping or exercising more and finding new challenges also placed high.

Responses from nations as far-flung as Brazil, Saudi Arabia, Russia, Sweden, Germany, South Africa, Hungary, Japan and Mexico varied widely, according to the poll.

Hungarians were mostly likely to say they needed to live better, with 89 percent agreeing, and second-most likely to say this was harder to do than ever before.

Saudi Arabians were the most likely to say their lives were fine as they were, followed by those from India and Sweden.

"These sentiments are inseparable from their crushed economy," said Keren Gottfried, research manager for Ipsos Global Public Affairs, which conducted the poll on behalf of Reuters News, referring to Hungary.

"We know from our economic confidence polling that these days only three percent in Hungary say their national economic is good. On the flip side, economic juggernaut Saudi Arabia is least likely to think they need to live better," Gottfried said.

"They also consistently have the highest economic confidence scores," she added.

And despite the popular perceptions of the French quality of life -- ample social services, great food, generous, federally mandated annual leave -- the French were the most likely to say that living better is now more difficult than ever.

While nearly three-quarters worldwide agreed that living better requires a plan, more than two-thirds of the French felt that living better is not something that can be planned.

Belgians were next, but far behind, with only 49 percent agreeing, while Indonesians were the strongest believers in the power of planning for a better life. Almost 95 percent said this was essential, followed by South Africa at 92 percent, South Korea with 90 percent and Hungary and Sweden, both with 87 percent.

"The planners come from all sorts of countries, economically strong and weak alike," Gottfried noted.

Reporting by Chris Michaud; editing by Patricia Reaney) - (Reuters) 

M'sia Govt Dept paid RM11,800 for RM3,400 laptop and printer!

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PETALING JAYA: The Marine Parks Department (JTLM) overpaid between 177% and 2,805% for equipment on a new boat and was not even supplied some items, the Auditor-General's Report stated.

It said JTLM did not conduct market research when it agreed to the price listed in the contract for these items, resulting in an additional cost of RM172,501.

The glaring differences included paying 2,805% more or RM56,350 for a night vision marine binoculars although the estimated market rate for the item was RM1,940.

However, what was supplied was not the RM56,350 binoculars but a non-night vision marine binoculars worth RM1,069.

Other price differences of equipment included a night vision Bushnell binoculars for RM56,350 which was a 1,893% increase from the market price of RM2,827; RM16,100 for a LCD television and DVD player which was 638% more than the market rate of RM2,182; and RM11,845 or 246% more for a laptop and a colour printer although their market price was RM3,428.

However, the audit found that the DVD player that was supplied was only worth RM195 and the laptop and colour printer that were supplied was only worth RM2,137.



Other items that were quoted beyond the estimated market price was for a colour marine radar for RM47,725 or 478% more compared to RM8,255 and a hand-held portable VHF transceiver for RM4,324 or 177% more compared to RM1,561.

JTLM had signed a RM7.51mil 12-month contract with a company to design, build, install, test and deliver an all-weather aluminium enforcement boat by July last year.

“There was no evidence that JTLM had conducted the necessary market research.

“The procurement management needs to be handled in a more organised manner by officers who have the expertise and experience in handling Government procurement.

“Contract terms on the design and quality testing were not followed and the equipment was not supplied according to specification.

“Yet payment was fully made without any price adjustments,” the report said.

The Treasury replied that the estimates for the contract were based on a verbal market research with experts from the Fisheries and Marine Department as well as reference to previous tenders from the Marine Department.

It added that there was a one-year gap between the tender offer date and the supply of items resulting in some items being supplied that were not according to specifications.

However, JTLM said the change in brands did not affect the quality, function and specification of the items.

The Star