In his Ultimate Gann Course, David Bowden compares this to Elliott Wave breaking the market down into three sections. While Elliott would describe the pattern as “5 Waves”, being three impulse waves and two corrective waves, Gann would call it three equal sections, with the impulse waves and the sections being labelled the same.

There are a few things to note about this chart. Firstly, the second and third sections are very similar in terms of price, with both being larger than the first section. Also, with the second and third sections being almost equal in price, there is also a relationship in terms of time, with the third section taking four times longer to complete than the third section.

As a sidenote, those students who attended Safety in the Market’s Master Forecasting Summit in September 2009 might like to review the homework I set them on the Euro based on the work we did on the last day of the summit. The homework led you to forecast a major top on the Euro on November 27th. The actual high of the year came one trading day earlier, on November 25. Now to wait for the Dollar/Yen forecast!

But for now, back to the Euro! From the November top, we have seen the Euro decline. I am looking for the Euro to start its next bull campaign towards the end of the first quarter of 2009 and then move on to a strong 2010. But first it needs to make a strong low. Chart 2 below shows the important percentage levels of the 2009 bull market range. The most important level, the 50% milestone, is highlighted in red.

The 50% level is worth watching for two reasons (other than the fact that WD Gann said you could make a fortune trading this one rule alone!).

Firstly, it gives us a potential price support target to watch for, and secondly because it allows us to rate whether the move on the Euro is strong or weak. If the Euro can find support and make a bottom – possibly in mid-March – above the 50% level, it will show it is a stronger market. If it can’t hold the 50% milestone, it will show that it is in a weaker position.

The fact is that every day we all make choices that affect our general level of wealth, and in turn our susceptibility to economic hardship; it’s just that some of us make better choices than others. I’m not just talking about serious financial decisions relating to investments and mortgage repayments either. The habits of wealthy people make a lot of common sense, but as they say common sense isn’t all that common.

The secrets of making the most of your lot in life, financially at least, are outlined here. If they sound obvious, don’t be too surprised. They are.

1. Spend less than what you earn

Do you really need to be told this? Unbelievably, it seems that most of us fail to understand this most fundamental of truths. In the mid eighties average household debt in Australia was about 44% of disposable income. Around 20 years later it’s above 160% and rising. In the US, about 44% of Americans spend more than what they earn in a given financial year. Even a credit crisis has failed to make us see sense.

Squirrels don’t spend a lot of time and energy storing nuts for the fun of it. And just as they are smart enough to plan for the future, so too should you. If you need elaboration on this point, you really are doomed to a life of poverty.

2. Save your money

This flows directly from the first point. But here we aren’t just talking about spending less than you earn, but allowing what you save to build up. I’m not saying you shouldn’t enjoy life and splash out every now and then, just budget for it and ensure that at the end of the day you are slowly growing your piggy bank.

How much you save will be the single biggest factor in determining your long term wealth. Read that sentence again (it’s important). So if you desire great wealth, you better plan to save as much as you can. A good rule of thumb, where possible, is to plan to save at least 10% of your income.

3. Invest

Without going into a long and boring lesson in economic theory, we can still appreciate that a dollar today is worth more than a dollar in the future. That’s because you can invest a dollar and grow it over time.

There are countless ways to invest your money, so let’s just go to the heart of the matter. Regardless of whether you are talking about stocks, property, term deposits or emu farms, there is one underlying rule when it comes to investing. That is: risk = return.

Don’t mistake this for meaning you will get great returns if you take great risks. It means that if you want great returns you must take great risks. And by definition risk is “the possibility of incurring loss or misfortune”. In other words, instead of making a great profit you could suffer a crippling loss. Let’s just say that it is a good idea to understand the risk involved with any investment and consider the worst case scenario. If you can’t take the worst case, don’t do it!

The important thing is that your money is being put to work and is growing over time. If it’s not, it will become less and less valuable due to the effects of inflation.

4. Borrow wisely

Debt isn’t always a bad thing. Most of us will need to borrow money to buy a house and sensibly using borrowed money can enhance our investment returns. What really matters is the level of debt and what we do with the borrowed money.

Debt needs to be repaid at some point and it will cost you interest along the way. The longer your debts are outstanding the more expensive they are, so if your debt is a high proportion of your income it will take you a very long time to repay. Also, the more debt you have the lower the level of your disposable income, because more income will be used to pay the interest.

Of course, if we take the borrowed money and use it to make sensible investments we can make more money than what the loan costs us. Over the long term this has been the case with property and shares, but to my knowledge most people haven’t made good returns on a boat or car, and certainly not on clothes and holidays.

I’m not saying we walk everywhere naked and never take a holiday, but I am saying that borrowing for these things ends up costing you a lot more than simply saving up for them in the first place. Just be patient and budget for the things you want.

5. There’s no such thing as get rich quick

If it sounds too good to be true, it probably is. Anyone who is offering the “opportunity” to make great sums of money with low risk is most usually a fraud. After all, if it were that easy wouldn’t they just do it themselves? So no matter how impressive the sales pitch, no matter how nice the guy’s suit is, if you are being offered massive returns with low risk, just walk away.

6. Be patient

If you can’t get rich quick, you might as well get rich slow. Thankfully this is rather easy, provided you are resolute and patient. Most people argue they don’t have any investments because they can’t afford it, but most of us should be able to save at least $20 week.

At the end of the first year you will have over $1,000 and if you keep saving $20/week and invest your money at 6%pa along the way you will have over $15,000 in 10 years. Because of the effects of compounding, that’s a 50% total return! Granted you won’t be buying a new Porsche with that, and 10 years is a long time, but it’s money that you otherwise wouldn’t have.

Furthermore, if you can save more and get a better return the numbers get even better. If we instead save $50 week and invest this into the share market every year, we will have $53,000 in 10 years and $212,000 after 20 years (based on the past 30 year annualised total return of the Australian market).

Put simply, the longer we wait, the better off we will be. The point is that even average returns and modest savings will do you well if given half the chance. Just be patient.

7. Insure yourself

No matter how clever we are with our financial planning, life can have a way of messing things up. It’s not something you like to dwell on but it is something you should consider. Insuring things like your house, car, income and even your life means that you can meet any financial challenge, no matter what trouble you find yourself in.

Of course while insurance offers great peace of mind, it also costs money. So don’t tick every extras box that comes your way and just cover the basics and shop around. Hopefully you’ll never need it!

So that’s pretty much it. Not rocket science, but many of us ignore these most basic of rules: don’t be one of them. In ten year’s time you’ll thank me.

Home buyers, dominated by HDB upgraders, were responsible for the overcrowding in showflats during that period. The increasing numbers of units appearing on the market and the large number of crowds gathering at property launches stunned most market watchers.

The strong sales of new mass market homes saw the prices of new launches slowly climbing up over the past few months. The transacted prices of new homes increased to between $750 per square foot (psf) and $1,000 psf in November from between $500psf and $700 psf in July 2009.

The number of mass market transactions exceeding the $1,000 psf mark also increased, with 392 transactions last year, compared to 75 in 2008. The highest price recorded for mass market homes were for units in Centro Residences in Ang Mo Kio, at $1,289 psf.

Although mass market private home prices have increased, a large number of developments are also offering a new mixture of products to keep the prices at an affordable level.

The demand for smaller units such as studio type, one room plus study, two bedroom, and two room plus study, within the central area appears to have brought down the mass market sector.

Unlike the mid-tier and high-end segment, mass market homes are typically larger in sizes as buyers frequently purchase them for their own occupancy rather than for investment. Thus, only 10 to 20 percent of units in the mass market development have smaller sizes.

However, more mass market projects are now offering smaller units. For example, 43 percent of Hundred Trees and 59 percent of Optima @ Tanah Merah are allocated to smaller type units. Buyers seem to have had a good response, and good take-up rates have been seen in both projects.

And as the Singapore government transforms the country into an attractive satellite island, more investors are now starting to invest in mass market private homes in the region.

For instance, the renovation of the Jurong Lake District contributed to the increase of property transactions in the western part of the country. The expansion of Bedok Town Centre, the rejuvenation of Changi Business Park and Tampines Regional Centre, and the building of the fourth university also increased the developments in the eastern suburbs such as The Gale, Optima @ Tanah Merah, Livia, Oasis @ Elias, Ferraria Park Condominium and Waterfront Waves.
 
As more and more places undergo rejuvenation and expansion, mass market homes will become more attractive in the near future.

If the monthly average of more than 1,400 units sold did not make policymakers sit up, the robust sales certainly caught the attention of everyone.

A few attributed the result to pent-up demand, while the government believed it was due to speculations. In September, it announced measures to “temper the exuberance in the market and pre-empt any speculative bubble from forming.”

Developers were disappointed, assuming the measures were a death knell for the fragile private housing market. As the measures were not aimed at investors, instead for pure speculative plays, the effect was more psychological than real.

It is hard to tell if the measures had really worked. Sales in the succeeding months fell, but they would have fallen anyway, with or without the measures.

Many have forecasted even fewer sales with the coming year-end holiday period. However, November’s figures showed a solid 600 units sold. Considering it was a ’slow’ month, sales received good response despite rising prices.

The actual price increase in Q4 2009 will probably exceed the 7.3 percent estimate last month.

There is no reason why buying will not continue, as it is not the speculators who are buying but the investors, rendering the cooling measures of little impact.

Chinese investors in particular are leading the charge. Many have benefited from the real estate boom in China, and their funds are now flowing into Hong Kong and spilling over to Singapore.

Buying will likely continue unless there are other channels for this massive liquidity. Buying will only falter when authorities start to step in to limit the risks arising from the increased exposure of the banking sector in the property sector.

There are only two possible scenarios for this year: sharp correction or continued healthy growth

You can buy shares through a standard brokerage account and benefit from the dollar’s rise. How much money can you make with a conservative play like this? Well, that depends on how high the dollar soars.

The last time this happened – in 2008 – UUP jumped from $22.79 to $26.50… a gain of 16%. Not bad for an unleveraged investment that you can buy with a click of your mouse on any standard online brokerage account.

But there’s an even better way to capitalize on a rising dollar, and I think you should know about it…

See, while UUP surged 16%, another type of currency play gave traders the chance to line up triple digit gains the last time the dollar rallied, like I predict it will this year.

How is this possible?

Through the $4 trillion Forex market – specifically, by buying the dollar and shorting key emerging market currencies. Take the South African rand, for example…during the dollar rally of 2008, this currency depreciated by 33%. Forex traders who shorted the South African rand in the Forex market were able to pocket gains of 833% (using a reasonable 25:1 leverage).

Similarly, the Mexican peso and the Hungarian forint fell 28% and 34.5% against the dollar that year. That would amount to gains of 700% and 862% in 25:1 leveraged trades.

Of course, this strategy is riskier than buying an unleveraged exchange traded fund like UUP. But with a good risk management strategy, you can easily limit your downside, while benefiting from much higher potential returns.

Minimize Your Risk with Minis

Currency traders have the advantage over commodity or stock traders because they can strictly limit their risk and control their leverage using what’s known as “lots” in the currency market.

As a trader, you have the choice to trade different amounts of currency using standard lots, mini lots or micro lots. Choosing the right type of lot helps you control your leverage – micro-lots use a little leverage, mini-lots use a medium amount of leverage, and standard lots is a LOT of leverage.

Personally, I believe using the medium choice: mini-lots are the best and easiest way to reduce your risk especially when trading exotic currencies.

When you trade mini-lots, you’re actually investing in 10,000 units of a specific currency pair, as opposed to 100,000 units with standard lots. More leverage = more risk, so mini-lots are a safer option for your account.

A Hypothetical

At the risk of getting a little bit technical, let’s look at a hypothetical situation…

Imagine that you have a $25,000 account and that you want to buy the dollar and short the Mexican peso (or buy the USD/MXN pair). You’re looking to earn a 4% gain, with an equal maximum loss.

If you use a standard lot, you will be risking more than 15% of your capital on that one trade.

Sure you have the opportunity for more gains with that added leverage, but you’re also risking a huge chunk of your account. If the trade goes against you, you won’t be able to bounce quickly from the loss.

On the other hand, if you trade two mini lots, you will risk just 3% of your total capital on that trade. But you still can double your money, using 25:1 leverage.
For currency traders, it’s the best of both worlds.

Regardless if you win or lose on the trade, you can ensure you have plenty of cash left in your account to trade with. And at the same time you can target far higher returns than you could ever achieve through a pro-dollar fund like UUP.

There is no doubt in my mind that mini-lots, combined with exotic currencies offer the most predictable, risk-controlled way to play this dollar rally.

By employing this strategy, you can enjoy all the benefits that the professional traders enjoy, with less capital at risk. You will also be able to trade without the anxiety and distractions that come with large swings in the currency market.

SINGAPORE: Singapore’s Prime Minister Lee Hsien Loong on Monday identified three areas of priority for the government: restructuring the economy, addressing the population shortfall and updating the political system.

In a wide—ranging speech to the annual Singapore Perspective Conference organised by the Institute of Policy Studies, Mr Lee said Singapore’s economic policies must enable the country’s economy to perform to its limits and help Singaporeans thrive in the new world.

He said the Economic Strategies Committee will publish its recommendations next week and the government will respond to them in the Budget.

On the population shortfall, Mr Lee said Singapore’s birth rates are not improving despite the government’s best efforts.

Last year, there were about 170 fewer live births than in 2008.

This would mean that the total fertility rate would have gone down further.

PM Lee stressed that while the decline could have been due to the global economic downturn, it was still a grave trend. If left unchecked, Singapore will face not just an ageing, but a shrinking population.

Therefore, he said the government needs to encourage Singaporeans to start families with parenthood benefits and other incentives.

However, he added that the country must also top up the population and talent pool with immigration in a measured and calibrated manner.

Turning to the subject of updating the political system, Mr Lee said that while having a sound system is essential, that in itself is not enough to produce political stability and good governance.

He said that the nation is still dependent on having the right people in charge and an able and committed team coming forward to lead the country.

The Prime Minister said a key task for his predecessors and himself has always been to identify promising people to form the next team.

He said good progress has been made in this area but he does not have a complete next team lined up in Cabinet yet.

He is confident that by the next general election, the People’s Action Party (PAP) will field a team which will consist the core of the next generation leadership.

Mr Lee also stressed that leadership renewal will be a major issue in the next general election.

The definition of a Gen Y is someone born between 1980 and 1995. But for most people Gen Y is just a euphemism for layabout, bludger or timewaster. And it helps to explain the alternative reference of ‘Gen ID’ - which means ‘Generation I Deserve’.

Let’s be honest, the name calling is appropriate. I’m sure you’ve talked incessantly about lazy youths or young adults - they won’t buy house, they want to go overseas, they won’t put money in the bank, and on it goes.

And then they quit a perfectly good, well paying job, just because it didn’t ‘engage’ them - whatever that means.

But fear not, the Gen Y offspring aren’t completely useless and ignorant of investing. In fact, you may be quite surprised at how good some of them are at saving…

You see, a survey from bullion company Gold de Royale came through to my inbox recently. The survey looked at their client’s investments habits.

The most interesting detail was the age of the customer buying bullion. A whopping 32% of gold bullion purchases were made by those classed as Gen Y!

But hang on, that can’t be right! This is the generation that thrives on credit, still lives at home on the Bank of Mum & Dad, and believes that a loan for $20k for that ‘must have’ 12 month trip overseas is an asset rather than a debt?

But what about the Gen Xers and Baby Boomers? Only 5% of Gen X’s looked to precious metals for an alternative investment, whereas the Baby Boomers lead the way with 60% of the near retirees wanting bullion as an investment.

Even so, the mainstream media image is still Gen Y is useless with their money.

But the fact is, they’re not. And I’ll explain more in a moment.

Firstly, you need to remember that no other generation has had credit thrown at them, like the Gen Yer’s have.

I bet you spent years saving for you first car, with every single cent - or penny - safely tucked away in a jar or under the bed. You knew that if you wanted wheels, you had to work hard and save for it.

But, when a Gen Yer was finally ready for a car, his or her bank manager had already sent a letter to them congratulating them on their eighteenth birthday and advising them they could get a loan for a car - even if they only had a part time job.

And don’t forget that at any University open days, there are bank leaflets for prospective students on special ‘University Credit Cards’. Sure these cards have a low limit, but before the students are enrolled credit has been thrust into their hands.

So while they have been dubbed ‘Generation Debt’, amazingly ‘only’ 56% of Gen Y’s over 18 have a credit card.

I mentioned before that the Gen Yer’s might be better at investing than you first realised. While you’ve looked at property prices, and possibly wondered how your kids will ever afford their own home, this generation, have looked for alternatives instead.

A hefty chunk of Gen Y have share portfolios. Many older investors have been frightened off the stock market, but Gen Y has used this crisis as a chance to become financially ’savvy’.

A large majority of ‘Generation Me’ have taken this market carnage as a sign they need to learn more about investing. In fact, 65% of Gen Y rate ‘Saving & Investing’ as their main concern. In true Gen Y style, they even have Facebook groups dedicated to sharing tips on how to save more money.

And even though retirement is nearly 40 years away for this lot, many are contributing more of their salary to superannuation.

So if you have the strong desire to kick your Gen Y off the Xbox, Playstation or Wii and move them out of their bedroom while they’re at work, do it. You might just find a large stash of bullion under their bed!

But the good news to come from the market down turn, has shown Gen Y that boom times don’t last forever and that they’ll look for other investment opportunities, instead of bricks & mortar.

SINGAPORE : Singapore’s economy may be picking up, but Prime Minister Lee Hsien Loong has said Singapore is not expecting the recovery to be very vibrant and strong.

And he cautioned Singaporeans against getting too carried away with the recent economic recovery.

Mr Lee said: “There is a fine balance; you want people to feel that they can make things better, but at the same time, do not assume that all the problems have passed.”

Mr Lee was speaking to reporters after taking part in the Lunar New Year light—up ceremony in Chinatown on Saturday.

On the buoyant property market, he said that Singaporeans cannot assume it will continue going up.

He added that the government is confident that things are under control.

And as to whether Singapore will achieve 3 or 4 per cent economic growth this year, Mr Lee said it will depend on how well things turn out.

Mr Lee also revealed that Finance Minister Tharman Shanmugaratnam will release the Economic Strategies Committee report on February 1

Markets from New York to Tokyo reacted with barely-restrained panic to Obama’s drive to limit the size of the largest banks and introduce measures to curb “excessive” risk taking.

“Never again will the American taxpayer be held hostage by a bank that is too big to fail,” vowed Obama, flanked by former Federal Reserve chief Paul Volcker who advised the president on the rules.

He promised to “protect” taxpayers by preventing banks or financial institutions from owning, investing in or sponsoring hedge fund or private equity funds.

Wall Street gave an immediate thumbs down to the plans as US stocks plunged, with the blue-chip Dow Jones Industrial Average down more than 200 points or two percent in Thursday trading.

The news then sent shockwaves though Asian stock markets with the region’s financial centers suffering heavy losses in Friday trading. European exchanges later opened under pressure.

Obama’s measures would effectively force financial firms to choose between lucrative proprietary activities — trading in stocks and sometimes risky financial instruments for their own benefit — and traditional activities, like making loans and collecting deposits.

The initiative, which must be approved by Congress, includes a new proposal to limit the consolidation of the finance sector, placing broader limits on “excessive growth of the market share of liabilities” at the largest financial firms.

Obama blamed banks for sparking the worst economic crisis since the Great Depression with “huge reckless risks in pursuit of quick profits and massive bonuses” in a “binge of irresponsibility.”

“My resolve to reform the system is only strengthened when I see a return to old practices at some of the very firms fighting reform and when I see record profits at some of the very firms claiming that they cannot lend more to small business, cannot keep credit card rates low, and cannot refund taxpayers for the bailout,” the president said.

He vowed to enact the reforms in Congress, even if Wall Street deployed an army of lobbyists to kill them.

“If these folks want a fight, it’s a fight I’m ready to have,” he vowed defiantly.

The announcement was the latest attempt by the White House to harness public rage at Wall Street bonuses and the financial crisis.

David Easthope, analyst with Celent, a research and consulting firm, said the effort could hit the banks in one of their most profitable areas.

Proprietary trading “has been the sweet spot for leading investment banks over the last few years, and executives will be concerned that Washington will be taking away the frosting,” he said.

The Financial Services Roundtable, which represents 100 of the largest integrated financial firms, said the proposal would do little to improve risk management or protect consumers from irresponsible loans and trades.

“The proposal will restrict lending, increase risk, decrease stability in the system, and limit our ability to help create jobs,” said Steve Bartlett, president and chief executive for the Roundtable.

The group represents 100 top financial services firms providing banking, insurance, and investment products and services.

Obama’s first year in office was dominated by efforts to rescue a handful of banks that threatened to topple the US economy after being exposed to massive losses on the subprime mortgage market.

According to Treasury officials, about 205 billion dollars was pumped into 707 banks under the government rescue plans.

Obama has sounded a tougher tone towards banks in recent weeks as he faced widespread voter anger at the massive government bailout, which came as Americans faced surging unemployment, home foreclosures and national debt.

Top Obama economic aide Austan Goolsbee sought to counter criticism that the plan is returning to the Depression-era law creating a wall between investment and commercial banks.

“It’s not returning to Glass-Steagall,” Goolsbee said.

While the act repealed in 1999 forbid underwriting securities or investing in securities by any commercial bank, Goolsbee said, “This is not that. This says a bank cannot own a hedge fund, cannot own a private equity fund or do trading for its own account that is not related to its client business.”

He added that the goal is “to get back to the fundamental nature of the bank, which is serving its clients, rather than investing for its own profit.”

Firstly let’s look at methodology. Basically these fall into four categories. The first is Fundamental and even though I don’t personally use this approach nevertheless it is used by the vast majority of investors - retail and institutional.

The next three are technical. The first are what I would call trend following indicators; the second range trading indicators and the third are what I would call pattern recognition such as Elliott Wave and Gann.

I personally use Elliott and have so for the last 15 years. Perhaps conservative at times but it does not lose you money in my view. If you are going to use technical’s then it is important to have at least a basic understanding of each of the three so you can make an informed decision. No approach is the Holy Grail. Yet I see many would-be successful investors waste effort searching for the easy route to riches. It does not exist. It is like the ‘Long March’ it is one step at a time. But with experience under your belt there are short cuts.

The reason I mention this is that I also see many study one approach, try it and give up as it does not bring the instant riches. And they then spend a fortune studying the next system.

But I also see others who are too mite minded to properly invest in education.

I will also say here that it does not matter which system you use as long as you use it with an applied approach and with discipline. They all work. I would say you could choose any approach and apply it in this way and you will succeed.

The other key point is that you must apply it in a measured way. That is, you try your new found knowledge steadily. Many investors jump in head first after a training seminar. You apply your learning in small easy comfortable steps at first using a small trading kitty.

The sleep test is important here but to mix my metaphors - you must at some point fully immerse yourself after putting your toe in the water.

It reminds me of that old adage ’slowly slowly catchee monkey’.

A spokesman for the integrated resort said this is part of an extensive training programme underway for all levels of staff.

Many dealers had been hired to work at the Integrated Resort from July last year.

However, construction woes led to delays in the opening date of Marina Bay Sands and that, in turn, led to uncertainty among employees as to when training and work would start.

That’s changed now.

Dealers MediaCorp spoke to said they’d been asked to turn up for uniform measurements and to get their staff passes done next week, followed by training.

Marina Bay Sands was unable to confirm exactly when the first batch of training started but added that typically, such floor training takes about three months, after which such employees must get a competency certificate.

There is also another hurdle for them to clear.

They also have to be interviewed and clear background checks by the Casino Regulatory Authority.

CRA said, in a statement, that it received the complete casino licence application from Marina Bay Sands in November last year.

It added that processing such applications typically take three months or more but that progress is good.

Marina Bay Sands had previously said that it will open its first phase of the resort in April.

• Global growth to normalize at around 4% GDP, mainly driven by growth in emerging markets
• Equity markets to rise another 10%-20% in coming months due to increased corporate profitability and operating leverage
• Re-pricing of risk in bond markets, especially sovereign debt
• Short-term rates to remain low for another few months but to rise strongly later in the year
• Long-term rates to move higher, but more moderate than short-term rates
• Inflation to remain at very low levels for another 12-18 months
• Energy prices to move higher with oil breaking USD 100/barrel in the first half of 2010
• Soft commodities to move sharply higher with upside potential of 30%+ in 2010
• Gold to consolidate after strong upward move, trading in narrow range in Q1/2010
• Gold to continue upward trend in second half of 2010
• U.S. Dollar to move lower, despite temporary upward bounces

As you can see, we’re expecting a rapidly shifting financial landscape to persist throughout the year (as it has since 2007/2008). We covered some of the broader points in last week’s macro-view, but this week I wanted to drill down and focus on just a few major trends that could be immensely profitable for you as the year wears on…

Gold Finds a New Kind of Value in the Wake of a
“Once-in-a-Century” Crisis

As we anticipated in previous A-Letter outlooks, gold has recently moved to record levels and it has been one of the best performing investments in the recent past. But should investors be worried about the upward trend of gold and take it as a sign that there is trouble ahead for markets in general?

In our view the answer is no.

We’ve written about the changing importance of gold in our previous reports, and we don’t think that gold is all that expensive at current levels. Again, once current prices are seen in a historical context, considering inflation and the weakening U.S. Dollar, gold is not expensive at all.

Also the obvious willingness of emerging markets and their central banks to use gold as an additional way of diversifying their reserves will be highly supportive for the yellow metal in the years to come…

Analyst Firm
Old Target Price (SGD)
New Target Price (SGD)
MobileOne
Nomura
2.10
2.30
Noble Target
Credit Suisse
2.10
3.00
Ascendas REIT
Credit Suisse
2.24
1.86

CapitaCommercial Trust (CCT SP): The office landlord partly owned by CapitaLand Ltd. (CAPL SP), said it
agreed to sell an office building in Singapore for S$203.3 million ($146.2
million). Separately, the company said distributable income in the
fourth-quarter climbed 39 percent to S$52.9 million from a year ago.
CapitaCommercial gained 3.8 percent to S$1.36. (Bloomberg)

Midas Holdings Ltd. (MIDAS SP): The supplier of aluminum extrusion profiles used in train carriages had
its share-price forecast raised to S$1.36 from S$1.07 at DMG & Partners
Securities Pte, which maintained its “buy” rating. Its shares added 0.9
percent to S$1.07. (Bloomberg)

MobileOne Ltd. (M1 SP), Singapore’s smallest phone company, reported fourth-quarter net income
of S$37.2 million, compared with S$36.6 million a year ago. Analysts had
anticipated profit of S$33.9 million, based on estimates compiled by
Bloomberg. Its shares were unchanged at S$1.97. (Bloomberg)

Shares of Singapore Exchange (SGX)lost as much as 11 cents, or 1.32 per cent, before ending at $8.27
yesterday, after it posted lower-than-expected earnings in the second
quarter. DBS Vickers Securities reduced its earnings estimates for fiscal
2010-2012 by as much as 4 per cent on lower derivatives revenues estimates
for fiscal 2010. It sliced its target price to $8.10 from $8.22 and kept a
‘fully valued’ call. (BT)
Singtel has joined a diverse group of industry players to build a US$400 million
subsea cable system that will initially link Singapore, Indonesia, the
Philippines, Hong Kong and Japan by the second quarter of 2012. The
six-member Unity consortium, which comprises Bharti Airtel, Global
Transit, Google, KDDI Corp, Pacnet and SingTel, is building a 9,620km
system that spans Japan and the US via the Pacific Ocean. This US$300
million system recently landed in Japan and is expected to be ready in the
middle of this year. (BT)
CapitaLand shares yesterday gained as much as 16 cents or 3.74 per cent as analysts
issued fresh ‘buy’ calls and upgraded the stock’s target price.
Citigroup’s Wendy Koh thinks the acquisition should add 25 cents to
CapitaLand’s RNAV. She upgraded the stock to ‘hold’ from ’sell’. Macquarie
analysts Tuck Yin Soong and Elaine Cheong similarly estimate that the deal
will add 20 cents to the company’s RNAV. Incorporating newly-listed
subsidiary CapitaMalls Asia’s (CMA) latest share price into the RNAV will
also add another 30 cents per share. ‘We lift our RNAV by 10 per cent to
$5.29 as a result and raise our target price by 11 per cent to $4.79,’ the
analysts said. (BT)
Genting Group is already looking to build another resort, a huge mall and an even ‘more
interactive theme park’ just across the Causeway in Iskandar Malaysia.
Genting, Asia’s largest publicly traded casino operator, and its
joint-venture partner US-based Simon Property Group have already invested
an initial RM200 million (S$83 million) in the Chelsea designer discount
shopping complex in Iskandar Malaysia, Johor’s special economic
development zone. Mr Lim dismissed the notion that RWS would cannibalise
its Malaysian operations. ‘It will grow the pie and if the two resorts
work hand-in-hand, we will offer a more complete holiday (destination) for
tourists from Asia.’ (BT)
Meditecs International Corp, which supplies masks and healthcare equipment, posted net profit
attributable to shareholders of US$1.79 million, up 83 per cent, for the
year ended Dec 31, 2009. This was despite a 30 per cent decline in group
revenue to US$56.7 million as the twin effects of focusing on
higher-margined product sales and cost optimisation kicked in. (BT)
Indonesian tanker company Berlian Laju Tanker (BLT) is going full steam into exploiting the new cabotage rules in Indonesia,
sealing a five-year plus two-year optional time charter for a very large
gas carrier (VLGC) worth up to US$90 million with Indonesian state oil
company Pertamina, the first such contract awarded to an Indonesian
company. (BT)
Ezra Holdings has made a break into the West African market in a big way, announcing
two services contracts worth up to US$80 million. It is aiming for more
than US$1 billion worth of tenders there. Mr Lee estimates the West
African market for services to be worth about US$100 million a year. Ezra
has a very small share of that market for now. He declined to make a
projection on future market share but said Ezra will aim to do one
large-scale project of FPSO size every 12-18 months. (BT)
Japan Airlines Corp. (9205 JT): The carrier yesterday filed for bankruptcy. The stock will be delisted on
Feb. 20, the Tokyo Stock Exchange said. (Bloomberg)

Mizuho Financial Group Inc. (8411 JT):Japan’s third-largest lender said it had 95.1 billion yen in loans and
other exposure to Japan Airlines as of the end of December. Sumitomo Trust
& Banking Co. (8403 JT) said it has 28.1 billion yen in loans to the
carrier. Japan Airlines was unchanged at 5 yen. Mizuho dropped 1.6 percent
to 187 yen. Sumitomo Trust sank 3.8 percent to 509 yen. (Bloomberg)

Crude Oil (CL1 Comdty): Crude oil for February delivery traded at $78.83 a barrel, down 19 cents,
on the New York Mercantile Exchange at 10:45 a.m. Sydney time. February
futures expire today. The more-active March contract traded at $79.19,
down 13 cents. Yesterday, the February contract gained $1.02, or 1.3
percent, to settle at $79.02 a barrel. Trades were combined with those
from Jan. 18 because of the Martin Luther King Jr. holiday in the U.S.
(Bloomberg)
Gold:  Gold futures for February delivery rose $9.50, or 0.8 percent, to
$1,140 an ounce on the Comex division of the Nymex. The metal rallied as
prices held above the 20-day moving average around $1,118, McGhee said.
(Bloomberg)

US Stocks: The Dow Jones Industrial Average rose1.09 percent to 10725.43 points,
while the tech-heavy Nasdaq climbed 1.4 percent to 2320.40 points.
(Reuters)

Wall Street: Prospect of Republican win for key Senate race in Massachusetts powered
stocks to new 15-month highs, with Merck, Pfizer, Aetna jumping on hopes
for more concessions to be made to health-care legislation. Broad gains
across other sectors came as investors bet compromises could be likely for
other hotly contested issues such as corporate taxes, financial-services
regulation. Merck +2.9%, Pfizer +2.6%, Aetna + 4.2%. A victory by
Republican Scott Brown over Democrat Martha Coakley in Tuesday’’s contest
would threaten legislation to overhaul nation’’s health-care coverage laws
by eliminating Democrats” filibuster-proof majority in the Senate.
McDonald’’s +1.9% after Credit Suisse boosted investment rating on stock
to outperform from neutral. Kraft Foods fell 0.6% after food giant
clinched deal to acquire candy company Cadbury. American depositary shares
of Cadbury, rose 6.2%. Dow +1.1%, Nasdaq +1.4%, Philly semicons +1.8%.