Goldman suggest to short Emerging markets currencies – ?!

They may be right after recent strong run up.  I think they are shorting the currencies or covering their shorts.

The origin of emerging markets currencies weaknesses were due to most central banks following US strategy to devalue their currencies. Besides, US interest rate rise a mere of less than 50 basis points sparked strongest dollar rally which is unreasonable.  Oil prices dropped also cause huge Ringgit drop in past 2 months.

Emerging markets currencies may have a correction at anytime soon. But there is no justification dollar can stay strong at low rates as of now.  Besides, in mid to long term.  The assets of emerging markets are no way to justify a continuous low currency until have a crash in economy.

If Greece is not possible to fail even it suppose to bankrupt.   Emerging markets especially Asean has more foots than dollar.  Goldman is a licensed speculator.

Air Asia RM 1.84 placement is positive

This implied RM 1.84 is a good support and privatisation potential remained.  If oil continue to stay below USD 80 per barrel.  We think AA will got big potential to retest RM 3.00.

Household debt increased to 89.1% a worry to retail industry

Household debt continue on the rise. This gives less chance for central bank to relax further.  In this subdue retail sentiment in Malaysia.  Any new measures to cool credits increase will slow retail further.  A vital step buy will hit retail harder.

Government will spend further to boost infrastructure to contribute GDP in a bigger picture.

We will further reduce debt ratio this year.  With our investment strategy focused into three areas below:

1. Asset and dividend oriented growth to large cap companies.

2. Climate change related companies

3. Agriculture and foods related companies

Equities will continue to recover but volatile

Before the next reason for another correction. Both the beaten currencies and equities markets in emerging markets will recover further. 

From oil to gold, emerging markets to Dow Jones or Hang Seng Index.  The whole markets becomes a volatile casino.  However, this created a huge opportunity if you just follow a simple discipline of buy low sell high. 

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