The year 2010 should be looking bullish as the economy is slowly recovering. We have seen an upside of more than 50% in stock since March. The Singapore government has recently raised 2009 growth forecast to a contraction of only -2% to -2.5%, and is expecting growth of 3-5% for 2010. Many banks are kind of bullish with many stock recommendations like marine offshore sectors, financials and healthcare. Still we need to be a bit of conservative since most of the stocks right now are fully valued or overvalued. We do not know what will happen in the future with surprises such as the Dubai debt worries. The economy is recovering, but if you look at US economic data, it could be a slow recovery as rates continue to be low. Asia is seen to be the one which will lead the recovery. Singapore was the first to be out of recession. China remained strong with their huge trillions of dollars of reserves. Recently, gold have been surging due to the falling value of dollar as everyone was afraid of the low dollar and hence put their money into gold where it will beat inflation. What is scaring everyone is the "super inflation" that may happen when the economy recovers and more people are again spending. Right now inflation is still kept in check.
In Singapore, the sectors should be recovering are the airline industry as more people are travelling again due to the holidays and since the H1N1 incident. Housing prices has rocketed again but is controlled by the government to prevent a "housing bubble", so it is now not that bullish anymore. However, it seems that property is one of the only asset that is very valuable as it can appreciate very well in good economic times. So with prices of property up, will rental rates of offices go up? Maybe, still more to come...
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