“A Timorous v Bold World”

Today our mentor is up and about but  he has to catch up on his mails.  So, I shall continue to write here by sharing this post at my blog today.

Timorous or Bold World?

 

A Timorous v Bold World

Today I attended a gourmet lunch hosted by Bank Julius Baer at the Four Seasons Hotel, Singapore, coming away with additional information to that I have gleaned so far from just attending UBS dinner talk at the Ritz-Carlton a few nights ago.

If you read my blogs  on Jan 11 and 12 at this website, you will be able to follow my train  of thought.

Dr Van (Anantha Nageswaran),  the Chief Investment Officer, Bank Julius Baer, gave the keynote address to those invited to the gourmet lunch.

His outlook for 2011  is not too far from that of UBS , such as:

1.       Economies:  The global cyclical backdrop is expected to be more unsynchronized, with a multi-speed growth pattern.  Growth will be predominantly in emerging economies while the Americas and Europe will remain below pre-crisis levels.

2.       Equities: A constructive medium term outlook on equities with a combined  benign  inflation and low GDP growth is attractive for equities, especially in emerging markets.

3.       Money Market & Bonds: Central banks in many emerging economies are tightening policies too slowly in the face of inflationary pressure due to their robust growth.  This overall liquidity backdrop creates a headwind for benchmark government bonds in 2011.

4.       Currencies: The major currencies such as EUR, USD, JPY and GBP would  remain low-yielding in 2011 and perform poorly. This also creates supportive backdrop for carry trade strategies.  The CHF  is expensive but enjoys a solid economic backdrop such as current account surplus and a balanced budget. The CNY would appreciate steadily as the Chinese government reins in inflation.

5.       Commodities: A steady global recovery, liquidity, erratic weather condition should provide support for commodities such as precious metals to energy to agriculture. Gold is still preferred.

Q&A- Moderators: Dr Van & Dr Lee Boon Keng (Co-Head Investment Solutions (ISG) & Dy CIO Asia Pacific, Bank Julius Baer.

Q by me: I made a statement that a couple cannot buy a second home on loan in China to curb the housing bubble.  To circumvent this ruling,  most couples would ‘pretend to be divorced’.

A by Dr Lee: I would like to add to what you said.  Most couples also  resort to  using  their mothers’ names  to buy the second home under loan.

On the question of having children in China, Dr Lee revealed that in the rural areas, there is no restriction but in the urban cities, couples can pay the penalty of USD20,000 to have a second child.

My personal take is that since China is now an economic success story, couples should be allowed to have as many children as they wish as long as they can afford to give them a good standing in life.  Singapore which used to have a 2-child policy has now been more flexible too.

Annoucements:

1.Bank Julius Baer announced today the appointment of David Lim, a Singaporean, as CEO Bank Julius Baer Singapore with immediate effect.

2.Onshore private banking needs “critical mass” to make money, the head of Julius Baer Group Ltd.’s French-speaking region in Switzerland said in an interview in L’Agefi.

“We want to show that an onshore presence can be profitable,” Remy Bersier told the Geneva-based newspaper. “That can only be done in specific markets because it involves a critical mass.”

I shall be attending another such event next week and hope to add more then.

IDKIT aka Ana

4 thoughts on ““A Timorous v Bold World””

  1. Just received some clarifications from Dr Van:

    (1) Timorous or bold was about Asia and not about the world.
    (2) I was not bullish for the first half, at least, for Emerging market equities. I said that developed world equities (esp. US) would outperform.

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