Some track market bottom to catch stocks at the lowest price

RECENTLY, our stock market has been affected by a lot of negative news, like unsettling US subprime issues, the weak economic growth as well as high political risks. Many retailers have lost confidence in the market.

Yet there are some who are trying their best to predict the stock market bottom, hoping to catch stocks at the cheapest price.

It is always a tough job to predict the lowest point in any stock market cycles. It requires some understanding of business cycles, which can be interpreted as fluctuations in economic activity.
It can be made up of expansions and contractions in the overall economy.

A peak in the business cycle happens when the economy reaches its peak and starts to decline. A trough in the business cycle occurs when the economy touches its bottom and starts to recover.
This is the turning point of any business cycle. Normally, stock market at this stage will show a confirmed sign of market turnaround.

The movement of stock prices is highly influenced by the companies’ profits. From a macro view, there are three determinants for corporate profits - consumer spending, industrial production, and services and capital spending.

Among the three, the key determinant is consumer spending.
As a result of the hike in oil prices, a high inflation rate and the overall weak economic growth have caused some slowdown in consumer spending.
As the main driver of consumer spending is personal income, which is largely derived from wages and the salaries, high inflation rate has caused some consumers to hold back on their spending.

To companies, the weak consumer spending will lead to lower demand for their products and eventually build up in inventories.

Most companies may take measures to reduce inventories, first by reducing purchases. Some factories may start to slow down their production if they see demand is getting weaker and, if this continues, it will lead to excess capacity, which subsequently might lead to retrenchment.
The overall industrial production rate will slow down while the unemployment rate will go up higher.

If the situation continues to weaken, some manufacturers may hold back plant expansion programmes.
Some proposed mergers or acquisitions may be put aside as not many company owners want to take the risk of expanding their business during this situation.
The slowdown in capital spending will lead to a further decline in future corporate profits.
The stock market is sensitive to future corporate profits. As consumer spending is the main determinant in corporate profits, any weakening in consumer spending will cause a big sell-down in stock prices.
This explained why the market sentiment was weak whenever oil prices edged up higher.

Where are we now?

According to Joseph H. Ellis in his book Ahead of the Curve, there are four stages of economic downturn -

Stage 1: The peak;

Stage 2: A modest slowing;

Stage 3: Intensifying worry; and

Stage 4: The advent of recession.

Stage 1 is where consumer spending and real gross domestic product (GDP) are increasing at a strong pace whereas Stage 2 is where the growth rate of consumer spending and real GDP only shows a slight decline.

Given our present situation, we are in Stage 3 with a higher inflation rate, slower growth in consumer spending and real GDP.
At this stage, the market may tumble about 20% from the peak. Some economists begin to worry that there are some possibilities that the overall economy may drop into a recession.
We do not think we will enter Stage 4 even with further decline in consumer spending and higher unemployment rate. It is not necessary that every time when we are in Stage 3, it will surely be followed by Stage 4. There are periods when we may revert to Stage 2 from Stage 3.
The decline in oil prices recently has provided some relief. Even though some economists commented that the worst may not be over yet, lower oil prices will contribute to a lower inflation rate.

Even though at this juncture it is still very difficult to confirm the trend reversal, the recent drop in oil prices has definitely helped to improve the overall consumer sentiment.
Understanding business cycles will help us to understand better stock market cycles. We always believe that we need to know what causes the market movement, then hope for the best and prepare for the worst.

by Ooi Kok Hwa is an investment adviser licensed by Securities Commission and the managing partner of MRR Consulting.

ALLAH S.W.T LEBIH MENGETAHUI

petikan dr HarakahDaily.Net
Salmiyah Harun, Nyza Ayob & Nuha Rahim Thu Aug 07, 08 2:19:13 pm MYT

KUALA LUMPUR, 7 Ogos (Hrkh) - "Saya dah tanda tangan ikat jamin peribadi saya, dan pasport saya masih berada bersama saya . Saya hargai pendirian yang diambil peguam saya.Yang saya kesalkan ialah pendakwaan ini. Walaupun saya yakin berdasarkan cara pendakwaan itu, pendakwa seolah dipaksa. Kalau tidak mustahil pendakwaan itu dibuat," demikian antara kata-kata Dato' Seri Anwar Ibrahim sebaik sahaja keluar dari kamar Mahkamah Seksyen Jenayah 1 pada jam 11.15 pagi ini, di Kompleks Mahkamah Jalan Duta.

Penasihat KeADILan itu mengaku tidak bersalah atas tuduhan melakukan hubungan seks di luar tabii dengan pembantunya Mohd Saiful Bukhari Azlan penghujung Jun lalu.
Pihak pendakwa tidak membantah Anwar dibenar ikat jamin dan mencadangkan ketua umum PKR itu dikenakan jaminan RM20,000 dan menyerahkan pasportnya.
"Dahulu dalam media tempatan dihebahkan bahawa ada penderaan dan paksaan. Semalam Perdana Menteri, Dato' Seri Abdullah Ahmad Badawi mengeluarkan kenyataan tidak bertanggung jawab mengatakan ada rogol, tetapi hari ini pendakwaan suka sama suka.
"Jika suka sama suka, kenapa saya seorang yang kena dakwa. Jika suka sama suka, kena dakwa kedua-dua,"katanya yang berucap dihadapan kira-kira 40 media dan diiringi isterinya,Dato' Seri Wan Azizah Wan Ismail. Turut kelihatan anak-anaknya yang turut memberi sokongan kepadanya.
Jelas Anwar, tumpuannya kini pada Pilihan Raya Permatang Pauh. Katanya, beliau akan memulakan ceramahnya malam ini di Taman Medan, Petaling Jaya.
"Dari Taman Medan kita akan ke Permatang Pauh. Dan insya-Allah dari Permatang Pauh sampai ke Parlimen dan kita ambil alih kerajaan dan perbetulkan segala kekhianatan, penipuan dan rasuah yang ada," katanya.
Anwar ada alibi

Sementara itu, Menurut Peguam Anwar Ibrahim, Sankara Nair Anwar memiliki alibi yang kukuh pada masa kejadian (26 Jun) pada jam 3 petang sebagaimana yang didakwa oleh pembantunya, Saiful.
Sankara yang ditemui di luar kamar sebaik sahaja prosiding tamat jam 10.30 pagi berkata, Mahkamah Sesyen Jalan Duta hari ini dilihat berlaku adil kerana membenarkan anak guamnya diikat jamin setelah Anwar mengaku tidak bersalah terhadap pertuduhan liwat.
Beliau salah seorang daripada sembilan peguam bela Anwar berkata, Hakim S.M Komathy memperlihatkan sifat adil dengan menggunakan budi bicaranya membenarkan Anwar dibebaskan dengan ikat jamin.
Sankara juga berkata, pendakwaan kes liwat terhadap Anwar tidak akan menjejaskan proses pilihan raya kecil Permatang Pauh akhir bulan ini.
Hakim menetapkan 10 September untuk sebutan semula kes itu di mahkamah yang sama.

Berikut adalah Kertas Pertuduhan terhadap Anwar:
Bahawa kamu, pada 26 Jun 2008 antara jam 3.01 petang dan 4.30 petang di alamat Unit 11-5-1, Desa Damansara Condominium, No 99 Jalan Setiakasih, Bukit Damansara, dalam Wilayah Persekutuan Kuala Lumpur telah dengan sengaja melakukan persetubuhan yang bertentangan dengan aturan tabii dengan Mohd Saiful Bukhari bin Azlan dengan memasukkan zakar kamu ke dalam duburnya; dan oleh yang demikian kamu telah melakukan satu kesalahan yang boleh dihukum di bawah Seksyen 377B Kanun Keseksaan.
Sekiranya disabitkan menurut Seksyen 377B Kanun Keseksaan, kamu hendaklah dihukum dengan penjara selama tempoh yang boleh sampai 20 tahun, dan bolehlah juga dikenakan sebatan.

Anwar diwakili sembilan peguam
Anwar diwakili oleh sepasukan sembilan orang peguam yang diketuai oleh Sulaiman Abdullah. Peguam lain termasuklah Sivarasa Rasiah, Sankara Nair, Saiful Izham Ramli, Amer Hamzah, Edmund Bon, Latheefa Koya, Leela J Jesuthasan dan Mohd Razlan Jawaludin.
Pihak pendakwaan diketuai Peguam Cara Negara Dato' Idrus Harun manakala pihak pembelaan yang dibarisi sembilan peguam diketuai Sulaiman Abdullah.
Ini adalah kali kedua Anwar menghadapi tuduhan liwat. Dalam kes pertama pada 2000, beliau dituduh meliwat Azizan Abu Bakar, pemandu isterinya, Datuk Seri Dr Wan Azizah Wan Ismail.
Terdapat juga peguam pemerhati bagi pihak Majlis Peguam dan badan hak asasi manusia yang berpejabat di Washington, Paris dan Bangkok.
Sementara itu beberapa orang pimpinan PAS turut mengikuti perbicaraan tersebut seperti Naib Presiden, Dato' Husam Musa; Setiausaha Agung, Dato' Kamaruddin Jaffar; AJK PAS Pusat merangkap ahli Parlimen Kuala Selangor, Dr Dzulkifly Ahmad dan AJK PAS Pusat yang juga ahli parlimen Titiwangsa, Dr Lo' Lo' Mohd Ghazali menyambut baik keputusan mahkamah tersebut.
Husam yang ditemui menyatakan keputusan tersebut menunjukkan mahkamah lebih bebas dan adil.
"Kami bersyukur atas keputusan yang diambil oleh mahkamah tadi. Selepas ini, kita akan turun 'berperang' di parlimen Permatang Pauh bagi memenangkan Dato' Seri Anwar Ibrahim,"kata Dr Lo' Lo'.
Anwar meninggalkan perkarangan Kompleks Mahkamah pada kira-kira 11.35 pagi.
Laluan ke kompleks itu sesak seketika apabila lebih 2,000 penyokong Anwar berhimpun di luar dan dalam perkarangan kompleks menyebabkan Anwar sukar meninggalkan kawasan itu. - mks

Komen:Hanya Berserah Kepada Allah S.W.T sahaja...itu yang termampu.