FAJARBARU BUILDER GROUP BHD (7047.KL)

Bob Doll: Ten predictions for 2011

AFTER A REWARDING but volatile year for stock investors, our expected gains for the equity markets for 2011 are not much different from what we expected for 2010. What’s different for 2011 is that market risk will be more to the upside than was the case in 2010. Indeed, US stocks in 2011 will record a third straight year of double-digit percentage returns, the first time this has occurred in more than a decade. By the close of 2011, the Standard & Poor’s 500 Index will be at 1,350-plus, a target that implies that the market will appreciate at least in line with corporate earnings. It is with this backdrop that we venture forward with our predictions for 2011:

1. US growth accelerates as US real GDP reaches a new all time high

2. The US economy creates two to three million jobs in 2011 as unemployment falls to 9%

3. US stocks experience a third year of double-digit percentage returns for the first time in over a decade as earnings reach a new all time high

4. Stocks outperform bonds and cash

5. The US stock market outperforms the MSCI World Index

6. The US, Germany and Brazil outperform Japan, Spain and China

7. Commodities and emerging market currencies outperform a basket of the US dollar, euro and yen

8. Strong balance sheets and free cash flow lead to significant increases in dividends, share buybacks, mergers and acquisitions and business reinvestment

9. Investor flows move from bond funds to equity funds

10. The 2012 US presidential campaign sees a plethora of Republican candidates while President Barack Obama continues to move to the centre

S&P Japan move

Standard & Poor's surprised markets by downgrading Japan's long-term sovereign debt one notch from AA to AA minus, citing the country's ballooning deficit, which it said will further reduce Tokyo's already restricted fiscal flexibility.

The move will have a limited impact on Japan's ability to raise money on financial markets but it raised a red flag with investors about other leading countries' fiscal imbalances.

"It is not a good sign.... A major economy like Japan being cut is not going to go down very well," said Mark Priest, senior equities trader at ETX Capital

What is Now ? and Next ?

KLSE - still above the uptrend moving average. healthy correction now.

STI - double Top, and waiting to break resistant, if can..

S&P 500 - Strong uptrend, but correction will coming soon.

HSI - Still above the uptrend line, but waiting to break resistant, if can.

Shanghai - the trend was not so beautiful, waiting to break resistant.

Jakarta - Disappoint it going to south now ??

US Fed official: US$600bil bond programme could backfire

WASHINGTON: A member of the Federal Reserve's policymaking committee suggested Tuesday that the Fed may need to scale back its $600 billion Treasury bond-buying programme if the economy grows more quickly than expected.

The Fed meets next on Jan. 25-26 and will review the program at that time.

CPO windfall profit tax could be subject to review

The palm oil windfall profit tax (WPT) which has been the major cause of contention among many plantation companies could be subjected for a review soon, a source close to the industry said.

The source said plantation companies especially those undertaking new planting and replanting that incurred losses in the initial six years of operations have expressed their discomfort over the WPT when “most of them have not even started paying for corporate tax or break even but were forced to pay for the WPT.”

HUBLINE BERHAD - 7013

Hubline Berhad is trying to break above its resistance level RM0.30.
(TP RM0.37)