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Showing posts from November, 2014

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Russia Holds Key Rate at 21% Amid Surging Inflation

The Bank of Russia unexpectedly maintained its key interest rate at a record-high  21% , defying analysts’ expectations of another significant hike as inflation remains stubbornly elevated. The decision marks a shift toward a more measured approach in balancing economic growth and price stability. Key Details Inflation Concerns: Annual inflation climbed to  8.9%  in November, well above the central bank’s  4% target , with inflation expectations reaching  13.9%  in December. Policy Rationale: The central bank cited the significant tightening of monetary conditions after October’s  200-basis point hike  as sufficient to resume disinflationary processes. Governor Elvira Nabiullina emphasized avoiding both economic overheating and severe slowdowns. Economic Overheating: Elevated government spending on the war in Ukraine and social programs, coupled with labor shortages and rising wages, have fueled strong domestic demand, exacerbating price pressures...

How Low Can Oil Prices Go?

It may be difficult to believe but as mentioned in my previous post, this is a new era for oil . And the next question to ask is how low can oil prices go?  Well, if the analysts were correct, the oil can still go lower...and it might fall a lot more. OPEC's decision not to cut production was obvious: to put and cause pain to US shale drillers, but it's providing holiday gift for consumers.  OPEC members Thursday followed the lead of Saudi Arabia, which has said it did not want to cut production and has made it clear it will defend its market share against other producers. Those producers include the U.S. shale industry, which has helped boost U.S. production by a million barrels a day in just a year. OPEC member Venezuela sees the world oversupplied by 2 million barrels a day. And if the US oil production were to continue to increase, the oil prices will definitely fall even lower. This is very likely to happen especially over the next three to fo...

New era for Oil

It was difficult to imagine that the oil price will be at 70 per barrel 6 months ago but today, the oil price has plunged to $70.15 per barrel.  OPEC's decision not to cut production is indirectly a declaration of price war in the crude market and the challenge to US shale drillers.  Here is a look at why the sharp drop in the oil price. First, US production has nearly doubled in recent years to 9 million barrels a day and analysts expect the production to rise by more than 1 million next year. And like all commodities and trades, an oversupply will drive the prices down. With this supply, Saudi Arabia and OPEC have essentially surrender to the inevitability of the lower prices from the exploding improvement in the US energy production. As OPEC maintained their output target, the oil price plunged to a point where some of the shale projects may lose money. This is a new era, where the market itself will manage supply. Saudi Arabia and OPEC kne...

Weekly Investment Term #6

If you have been mixing with people who are into investment, you will probably heard some people talking about buying stocks with good fundamentals or good prospects etc. There are also others who are looking into the technical chart to try and predict the market movement.  Well, there is a way for you to answer some of the questions like: a) How is the company being run? b) Is it generating profits? c) Is there a growth in the performance? d) How does the company fare in comparison to the peers? That way is what some people called: Profitability ratios Profitability ratios measures the ability of a company to generate profits relative to sales, assets and equity. These ratios are useful to to measure a company's performance over the years and also in comparison to the peers.  Here are 5 ratios that I would love to share with you today: 1) Gross Profit Margin (GPM)   Gross Profit Margin (GPM) is calculated with the fo...

Market Daily Report (28 Nov 2014)

As mentioned in the morning post on the oil prices plunge , the FBM KLCI continue the downtrend. The downtrend continues   Most shares traded lower at the end of today, as the poor sentiments surrounding around the O&G counter spread to other sectors as well. OPEC's decision not to cut output to stem the falling crude oil prices crushes any hope of a quick rebound for the crude oil prices. In fact, it's hard to even try to predict the bottom of it at this point of time.  The FBM KLCI fell 0.5% today, to close the week at 1,820.89 points at market close. However on a week-on-week basis, the KLCI ended the week 11.76 points or 0.65% higher, compared to last Friday’s closing of 1,809.13 points.  The OPEC's decision might just force the downtrend to continue for a while....as Reuters reported that oil prices, oil-related shares and oil-linked currencies all tumbled in Asia on Friday.  The huge supply of oil could hurt country lik...

Oil prices plunge

It's not a good news for the energy shares as they led losses after oil prices plunged.  Not looking good for oil After OPEC decides against the cut, Brent crude oil plunged as much as $6.50 a barrel on Thursday, and U.S. crude fell by nearly as much, posting the steepest one-day falls since 2011. Benchmark Brent futures settled at $72.58 a barrel, down $5.17, after hitting a four-year low of $71.25 earlier in the session. The contract was on track for its biggest monthly fall since 2008. U.S. crude was last down $4.64 at $69.05 a barrel.  This is definitely not a good news for oil producing countries like Russia and even Malaysia. PRICE WAR? It is going to be a price war. The US crude may even slide to below $65 a barrel in coming weeks and this could be a factor against the economy of the Northern American shale oil production.  While many were saying the oil price may have hit a bottom, some analysts have a differing point ...

Market Daily Report (27 Nov 2014)

Just yesterday, we were talking about a good day for FBM KLCI, where the index rose 3.61 points to close at 1842.17. Well, some analyst will look at the drop for today to 1829.91 (a drop of 12 pts) is a technical correction after consecutive gains for the past 3 days.  But with the anticipation that Organisation of Petroleum Exporting Countries (OPEC) member nations would not cut output to support prices, it's best that investors be careful in their trade in FBM KLCI. There are some who expect the rebound in oil price in December because of the winter in the northern hemisphere.  The decline today was mainly due to the blue chips counter like Tenaga, Telekom etc. Regionally, the markets were mixed with Japan's Nikkei and and Hong Kong's Hang Seng decline while South Korea's Rospi rose for about 0.06%.  Here are some of the concerns that investors should take note of: 1) How the oil prices will move in the coming months with the OPEC no...

Market Daily Report (26 Nov 2014)

It's a good day for FBM KLCI, as it closed higher for its third consecutive day, after the US revised higher its third quarter economic growth. Malaysian shares rose in line with most Asian markets. Positive for FBM KLCI At 5pm today, KLCI rose 3.61 points to close at 1842.17. (it's 0.2% increase), thanks to gain from stocks such as Maybank, Tenaga as well as British American Tobacco (BAT). The KLCI is supported by the regional positive sentiment especially after Reuters reported the US government upgraded its reading on third quarter gross domestic product (GDP) growth to 3.9 percent on Tuesday, from 3.5 percent reported last month.  BAT is the top gainer while Dutch Lady Milk Industries Bhd is a top loser.  In the region, the markets were mostly up, while Hong Kong’s Hang Seng rose 1.12%, while South Korea’s Kospi gained 0.03%.

Compare the "mddle class" today and 10 years ago

The term "middle class" was a word that signifies progress, and it also mean stability. The "middle class" used to mean a family with a nice place call Home, drives a Volvo or vehicle of that class, goes on yearly vacation and send their kids to college.  But those were the days. Because the middle class today varies so much in comparison to 10 years ago. In Malaysia, the "middle class" group generally includes people who earn RM3,000 above. Between RM3,000 to RM4,999 a month, it's normally the lower middle income while the upper income earns RM5,000 above. In our country, our government data in 2012 shows that 27.8% household income was at the lower middle income while 33.6% household earn RM5,000 and above.  Even though there is a stead increase in income in the country, the increase barely offset the country's soaring inflation rate....the rising living cost.  Here are some of the significant items that one should compare between ...

Credit Card Mistakes That One Should Avoid (Part 1)

Credit card can be friend as well as foe, as mentioned previously in Credit Card - Friend or Foe (Part 1) , Credit Card - Friend or Foe (Part 2) , Credit Card - Friend or Foe (Part 3) and Credit Card - Friend or Foe (Part 4) and while a credit card comes with numerous benefits and flexibility to one provided that the user uses it well; can be rewarding to him or her as well. Having said so, there are several costly mistakes that one should avoid at all cost - as those mistakes will eventually lead one deeper into the debt pit. 1. Avoid Paying Only the Minimum Payment Typically on a credit card statement, one will see two type of balance due; total balance due or some known as the statement balance as well as minimum payment due. The minimum payment due is usually RM50 or 5% of the outstanding balance. Imagine only paying 5%, with 95% of the outstanding will be charged a hefty interest rate. Piling up debt in this way shows the incapable to repay the debt thus hurting the credi...