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When we talk about the GDP growth and per capita income, Singaporestands at the top in the list. Apart from it, the country represents a booming economy with unexpected growth in the industries, installation of MNCs, Real Estate market and obviously the foreign investment has marked a special pattern on the national economy. It has not only boosted the development rather it has also attracted huge wealth from outside the country. Experts suggest thatSingapore is one of the business friendly spots on this earth with increasing tourism and the legalization of gambling since 2005.

The sole factors that compel a person or an interested property buyer to invest inSingaporeare illustrated below: “

Real Estate – The country offers the potential buyers a wide variety of housing options wherein the people can invest. The average price being $400,000 in the residential area, the nation attracts the investors all over the world. The biggest advantage here lies with the excellence in the construction department with a panoramic view of the natural beauty which lies along the shores of the sea.

Development – The national government has left no stone unturned in the complete industrialization and starting from the roots of the society and economy, the country has gained a high living standard and better economical growth. You can easily see the large growth due to the balancing factor which has equippedSingapore with huge opportunities and plenty of options that are yet to be exercised. The strategic and excellent geographical location of the island gives the country an opportunity to attract the direct foreign investments throughout the year.

Living Standard – According to the recent report,Singapore has been ranked 15th in the world and 5th inAsia as the most expensive country. This certainly describes the high living standard of the local citizens here. Minting money with direct investment in the property here is not a very typical task at all.

Economy – With a booming economy, all thatSingapore demands is the flexible investing policies and that the ground of the real estate should be commercially more viable. In other words, people from worldwide locations are getting high profile jobs in MNCs and thus, increase ion the investment is liable. You can bet on the costly property and earn a lot of money in very less response time. Foreign expatriates get attracted here and the investors of the world have shown great interest in doing business.

After getting all the possible and strong reasons for investment inSingapore, some other factors are also there that must be kept in mind. You will have to choose the appropriate and under-budget deals that may fetch you reliable income return in the future. The Asian cultures, the versatile taste of life and living with the wealthiest Asian people will further act as a catalyst for investing in real estate.

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The Government announced that on top of the regular 3% stamp duty, Additional Buyer’s Stamp Duty (ABSD) will now be imposed as follows:

— Foreigners and non-individuals (corporate entities) buying any residential property will now pay about : +10%

— PRs who own one and are buying the second and subsequent residential property: +3%

—Singaporecitizens who own two and are buying the third and subsequent residential property: +3%

While the last 3 rounds of property tightening (Feb 2010, Aug 2010 and Jan 2011) were clearly anti-speculation, this latest move is targeted at investment demand. Paradoxically, a potential flight of capital out of Europe into Asia may have galvanised the government’s resolve to ring fence the domestic property market, especially now that foreign purchases account for 19% of private residential property purchases in 2H2011, up from 7% in 1H2009.

With new supply ramping up into 2015, Morgan Stanley expects property prices to fall.

However, stocks typically bottom ahead of physical market prices. In 2009, the FSSTI bottomed in Mar 2009, even though the URA property price index continued falling, by -14.1% QoQ in Q109 and -4.7% in Q209. Similar experiences took place during the bounce in 1998 (Asian crisis), 2001 (TMT/Sept-11) and 2003 (SARS).

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Like a few other counters, Keppel bulls put up a strong fight from Early Oct 2011 and started losing momentum towards the start of Nov 2011.

The Kumo (blue shaded region) is a zone of resistance. Prices made it towards the top of the current resistance zone. This suggests to traders that the current bull momentum has some sustainability.

Going forward, the Kumo turns to be a strong support for the daily charts. The market is telling us it should be going sideways with opportunities for a rally.

We would watch for the Chikou Span (green line) to break above the Kumo to give further odds for a sustainable bull run.

We analyse the weekly charts below.

Notice how the rally stopped right below the strong Kumo resistance and was followed by three weeks of bear candles. This strong resistance would pose some hurdles for Keppel bulls to push through.

The blue arrows represent how prices might move forward looking at current analysis.

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This is a question clients often ask us. And it is not a simple question to answer. The following components all contribute to the Return on Investment of your trading system, be it stocks, forex or commodities.

• Trading Capital $ Size
• Risk % per trade
• Average Reward: Risk per trade
• Average Win Ratio
• Number of Trade Opportunities

Winnings = (Number of Trade Opportunities)*(Average Win Ratio)*(Average Reward: Risk per trade)*(Risk % per trade)*(Trading Capital $ Size)

Losses = (Number of Trade Opportunities)*(1 – (Average Win Ratio))*(Risk % per trade)*(Trading Capital $ Size)

ROI = (Winnings – Losses) / (Trading Capital $ Size)

If you purchase a blackbox system or attend a seminar which promises X% of ROI, make sure you run through the above 5 components. If the system is risking 10% per trade for example, it is easy to bump up the ROI, but it only takes a few wrong trades to wipe out your account.

Click here to download an excel sheet calculator to aid you in your ROI calculation.

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The issue of Europe has completely dominated financial markets and news flow over the last 3 months. No single event, summit or meeting can determine the trend for any length of time. Until we have clear direction from politicians on the US, Eurozone and the UK, we should expect the news flow to cause us to flip from one idea to the other.

Let us imagine either a currency or an economy that is on a simple upward trend depicted by the grey line in chart 1. Around the trend is the economic cycle, shown by the red line. Of course, since the cycle moves up and down, the trend line is never obvious.

On top of this simple picture, one needs to super-impose events or news flow. These events normally obscure where we are in the cycle. Of course major news events can impact the cycle and particularly extreme events can even impact the trend. Chart 2 illustrates this “normal” picture of the world. This view was prevalent in the pre-2007 period.

News is by nature both random and haphazard. So when the news flow disappoints we suddenly think we are on the downward path, and as the news improve, we equally think we are out of the woods. Clearly it is impossible for one piece of news to decisively determine the path. However, the market often acts as though it is the case.

It will take overwhelming one-way news flow to break free from this RoRo paradigm. Another way to break out of this paradigm is for the economic data to become crystal clear. Therefore, trading and reacting to news is a risky strategy.

Article adapted from HSBC Currency Weekly Report.

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Australia

With financial conditions already restrictive, house prices falling, fiscal policy sharply contractionary and an uncertain global environment, we expect the RBA to cut rates by 50bp by end-2011 before leaving rates on hold in 2012. For the AUD, the catalyst for ongoing resilience is our forecast for further quantitative easing in the North Atlantic and high relative interest rates in Australia. However, the upside risks should be capped by the RBA adopting an easing bias and by the expected deterioration in Australia’s trade accounts.

China

Our Strategists see global uncertainties as keeping investors generally in risk-off mode and weighing on Chinese equity valuations. Any potential recovery will likely be due to less tight EM policy rather than a meaningful resolution of concerns in developed markets. Therefore, our strategists still prefer domestic-facing cyclicals and less-crowded defensives.

Hong Kong

Despite its increasing dependence on Chinese demand, slower external demand (particularly from the G3) still influences the Hong Kong economy. The banking sector is facing the challenge of increasing operating expenses and low NIM, whereas the government’s policies on properties may continue to have an impact on market sentiment. In this macro environment, we believe that the current valuation premium of Hong Kong vs. the region is unlikely to expand.

India

Although India’s medium-term growth prospects remain promising, its near-term macro backdrop has deteriorated: the fiscal deficit may stay at a high level in FY2012 on the back of rising subsidies.

Indonesia

Our Strategists recommend an ‘overweight’ for the market given that Indonesia has a strong domestic demand story. Also, Indonesia is ahead of the inflation curve and has the strongest earnings growth in this region.

Malaysia

Our Strategists recommend an ‘overweight’ for the market. Besides its appeal as a domestic-demand-driven economy, Malaysia has also put in place a structural program for medium-term economic improvements. Moreover, the defensiveness of Malaysia’s equity market means it looks attractive against the current macro backdrop.

New Zealand

We believe the NZ$ is overvalued but see a lack of triggers in the near term to significantly close the valuation gap. Given the global backdrop, we expect the RBNZ to hold interest rates until early 2012, although this may be delayed if global conditions deteriorate further.

Philippines

Our Strategists maintain a ‘market weight’ on the Philippines as they believe there is no top-down direction in terms of development for the country.

Singapore

We keep our ‘market weight’ stance in Singapore. The equity market is dominated by banks and property, making it more sensitive to the global asset price cycle. This makes it less attractive than other more domestically-oriented economies.

South Korea

US recovery, emerging market demand and macro policy normalisation in Korea remain key macro themes for 2011. KOSPI valuations are among the lowest in the region and remain attractive relative to historical multiples. Globally low interest rates should keep liquidity conditions supportive. That said, due to slowing global growth momentum, we switched to ‘neutral’ for Korean equities from ‘overweight’ in early May.

Taiwan

Our Strategists have downgraded Taiwan to ‘underweight’ from ‘marketweight’. They believe DM weakness will outweigh the thematic appeal in Taiwan, and that the domestic demand story looks well-priced. These factors lead them to see the current valuation premium vs. the region as unwarranted.

Thailand

Our Strategists have raised Thailand to ‘market weight’ from ‘underweight’ as they expect DM concerns to weigh more heavily on other markets in the region. Moreover, the strong mandate that new Prime Minister enjoys could result in stronger fiscal stimulus.

Vietnam

We think the periodic devaluations establish a weakening trend in the VND. Notably, frequent downward adjustments in the VND exchange rate may deter investors and Vietnamese citizens (who hold a large proportion of assets in FX and gold) from holding the local currency even over the short term.

Source: Goldman Sachs Global Economics Analyst Fourth Quarter 2011

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