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Asian Economic Outlook in 2009 Print E-mail

The Malaysia Insider - 12 January 2009 

The Economist Intelligence Unit has made further significant reductions to growth forecasts for Asia and Australasia in 2009. The worsening global picture merits substantial re-evaluations to projections of economic growth in the region.

Our GDP forecasts for export-dependent Taiwan and South Korea have been cut by 4.2 and 1.1 percentage points, respectively. These two economies, along with Singapore and Japan, will be the worst performers in the region in 2009.

But even superstars like China and India are facing sharp slowdowns – albeit to still-robust rates of 6 per cent and 5.2 per cent respectively.

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Here's Why Now is a Good Time to Invest into UK Traded Endowment Print E-mail

Most people lose money when they invest. Thus, I've learned that to make money from investing, we cannot follow what most people are doing.  We need to be a "Contrarian", to go against the Herd.

Many people do not realise the concept of "Reversion to the Mean". What it means is that if something deviates too much from the "average", it is likely to move back to the Mean.  That's why in Financial Markets, after stock prices have been shooting up 200% to over 500% in the last 5 years, the "party" was ended by stock market Crash.

However, year 2008 proved to be one of the Worst Year for Stocks since 1937.  For many, this might be depressing news, for me, this is exciting News.

What it might mean is that year 2009 is likely to be a year that stocks bottom and stage some form of recovery. I especially like some of the markets that did very badly in year 2008. China stock market is one, it fell by the greatest margin in year 2008. Singapore stock market is another, it fell more than U.S. (source of all the financial troubles we experienced). 

I like China and Singapore because both of them have strong fundamentals, have little debt and will probably bounced back very fast when economies start to recover.

Looking at currencies, Sterling Pounds was one of the worst performer in year 2008. Again, I'm excited because of the possibility of "Reversion to the Mean". Thus, the chance for Sterling Pounds to recover is actually higher than for it to drop another 20%. 

Thus, this might be a very good Opportunity for anyone to invest into UK Traded Endowment, as you'll be buying sterling pounds on the cheap and also buying policies on the cheap, since the financial Crisis has caused many Traded Endowment policies to be priced very low.

With price low, what goes up is the level of Capital Guarantee, which can be over 100% Capital Guarantee (Cash Value of policy vs Policy Price) and the potential returns. For more information on UK Traded Endowment, you can email us at    This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

Equities:
• MSCI World Index: -42.1% (worst yearly performance since start of Index in 1970)

  • S&P 500 Index: -38.5% (worst annual percentage decline since 1937 and 3rd worst on record; largest quarterly [4th quarter: -298] and daily [September 29: -107] points decline ever; 6th worst daily percentage decline [October 15: -9.0%])
  • Dow Jones Industrial Index: -33.8% (worst annual percentage decline since 1931 and 3rd worst on record; largest quarterly [4th quarter: -2,330] and daily [September 29: -778] points decline ever; 6th worst daily percentage decline [October 15: -7.9%])
  • S&P 500 and Dow Jones: There was no point in 2008 where the indices were up for the year at the close of a trading day. Since 1900, 2008 was only the 4th year (after 1910, 1962 and 1977) where the Dow never had a single day where it closed up for the year, according to Bespoke.
  • FTSE Eurofirst 300 Index: -44.8% (worst yearly percentage fall since its creation in 1986)
  • Nikkei 225 Average: -42.1% (biggest annual percentage decline on record)
  • CBOE Volatility Index (VIX): Historical high in November based on new calculation, but remained below levels seen during the 1987 crash based on an previous calculation.

Treasuries:
• US Treasuries: Yields dropped to lowest levels since 1950.

  • US 10-year Treasury Notes: Yields fell by 182 basis points - biggest yearly points decline since 1995 and the second biggest in the last 20 years.

Currencies:
• Japanese Trade-weighted Index: +25.0% (largest annual rise since currency was allowed to float freely in 1973)

  • Pound against US dollar: -26.2% (worst annual decline since gold standard was abandoned in 1971)
  • Pound against euro: -22.8% (worst yearly decline since launch of single currency in 1999)
 
Moody's "Global Outlook 2009: A Bleak Year" Print E-mail

Korea Newswire - 2 January 2009

The coming year will be a bleak one for the world economy. Recessions in recent years have tended to be brief and mild. This time, the unparalleled magnitude and systemic cast of the financial crisis increases the likelihood of a longer, more severe and broader downturn, not just in the U.S., but in other major developed countries. Compared with previous downturns, this one is more tightly synchronized because of the global spread and depth of the financial shock. As a result, recession's tentacles are now gripping Japan and most major European economies, including Germany, the U.K., France, Italy, Spain and Ireland.

Recognizing the threat to the world economy and financial markets, policymakers in the major economic powers have taken extraordinary measures that will eventually cost trillions of dollars to try to contain the crisis. These measures include taking an internationally coordinated, system-wide approach, providing liquidity and lending guarantees, recapitalizing banks, and nationalizing institutions whose insolvency threatened the integrity of the global financial system. The International Monetary Fund and other multilateral institutions have cooperated to put together multibillion dollar lending packages to help countries hit by sudden reversals in capital flows. Monetary easing is now more aggressive, and country after country has announced increasingly ambitious fiscal stimulus measures.


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Singapore Recession Deepens, Govt Lower 2009 Outlook Print E-mail

Reuters – 2 January 2009

Singapore's recession deepened in the fourth quarter as the global financial crisis took its toll on manufacturers and the services sector, and the government warned the economy may shrink by as much as 2 percent this year. The economy contracted at a seasonally adjusted, annualized pace of 12.5 percent during the October-December quarter, following a revised 5.4 percent decline in July-September, data showed on Friday.

It was the third consecutive quarter of decline in gross domestic product and was worse than the most pessimistic forecast of nine economists polled by Reuters which was for a decline of 8.6 percent.

The government now expects Singapore's GDP to come in between a decline of 2 percent and growth of 1 percent in 2009, lower than the previous forecast of -1 percent to +2 percent made in November.

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Better Time to Invest in the TEP Market Print E-mail

TEP – 30 December 2008

New research released last week has suggested that a number of factors are combining to push the cost of traded endowment policies (TEPs) down to a record low, the Financial Times Adviser reports.

The study, conducted by Money Management, found that TEP investors are in line to receive a minimum of 97.7 per cent of their total investment in the current climate.

Furthermore, it claimed that this figure can be attained without any dependence upon additional bonuses in the remaining years of a policy or a final bonus when it matures.

The research appears to back up the belief that with the current financial turmoil having a profoundly negative impact on with-profits assets, investors will be ready to pounce when the corner is inevitably turned.

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