well to be honest, i think the local bourse
is overbought. The momentum is pretty
high-pitched, and very possible to turn
into overheating. Trade volume is, if not plateau-ing,
then thinning. Suspicious rise in credit-thirsty sectors
is always a cause for concern especially
when we are having a credit-caused downturn.
I surmise that the rise has something to do
with the tremendous amount of liquidity
in the local and global economy because
of the stimulus packages
pumped by governments.
The successive rate cuts by
central banks also sparked
some easy credit for
speculative playing. The thing with these developments
is when the effect of the short-term "jolts" wear out, we have
a rising inflation, anemic credit standing, and still
emaciated markets. Then we see a second phase of the downward
cycle, which COULD be worse than the downswing we experienced
since the collapse of Lehman Bros.
The practical side is if you have money at the bourse right now
I recommend sell at the most comfortable level you feel.
The drop-down is inevitable by the second sem of the CY 2009 up to 2010,
possibly 2011. Avoid financials and holdings like a plague.
They will fall like the London Bridge.
Mining and energy would be good since commodity price
is a good indicator for the global economic health.
But accumulate sparingly and cautiously.
I see the index shedding some 100 basis points or more
in the coming months.
They will be rise and fall, but the rise will not
offset the traction of depressing stock prices.