US Economy Likely To See A Sharp Slowdown
>From our analysis, the average US consumer would not be able to spend
much more than their present level of consumption; exports too, would
not grow significantly in the short term. This makes it difficult to
identify a clear economic driver to propel the US economy, going
forward. We thus think that it is highly likely that the US economy will
experience a sharp economic slowdown in the next twelve months.
As at 15 October 2007, the estimated PE of the US market was at 17.8X
and 16.9X based on 2007 and 2008 earnings respectively. This is at the
lower range of its five-year historical PE ranging from 14.8X to 20X.
Weaker expected earnings growth and the continued depreciation of the
USD against the SGD would eat into the returns of an investor who holds
US equity funds. Taking into consideration our gloomy views on the US
economy, earnings growth of US market is estimated to decrease to 5.4%
in 2008, from 8.8% in 2007. Meanwhile, the earnings growth of the US
banking sector has also shown signs of a decline lately.
On 16 October, Citigroup Inc.'s Chief Financial Officer, Gary
Crittenden, said late payments on home loans may worsen in the fourth
quarter of this year. At the same time, the Bank of America (BOA) also
reportedly said that it may reduce the value of loans used for leveraged
buyouts by US$700 million, and JP Morgan also said that it may disclose
a US$2.1 billion write-down for leverage buyouts and mortgages,
according to estimates by analysts at Sanford C. Bernstein & Co. Just on
24 October, Merrill Lynch also said that it has written off a
sharper-than-expected US$7.9 billion worth of losses in its
mortgage-related investments. The investment bank conceded that the
increased amount of write-offs was due to their exposure to
Collateralized Debt Obligations (CDOs) and sub-prime mortgage loans in
the US. These are some evident signs which signal that a slowing housing
sector has begun to affect the balance sheets of the US financial
corporations.
In view of our findings, we have decided to downgrade the US market to 2
stars ('Unattractive' rating) from 2.5 stars (or 'Neutral' rating)
previously. We recommend investors to pare down their exposure to US
equities.
Kunjungi situs http://www.info-saham.com untuk informasi seputar saham.
DILARANG KERAS MEMOSTING OPINI PRIBADI TENTANG POLITIK DI MILIS INI.
Silahkan lakukan itu di milis [EMAIL PROTECTED]
[EMAIL PROTECTED] untuk berhenti dari milis saham
[EMAIL PROTECTED] untuk bergabung ke milis saham
Yahoo! Groups Links
<*> To visit your group on the web, go to:
http://groups.yahoo.com/group/saham/
<*> Your email settings:
Individual Email | Traditional
<*> To change settings online go to:
http://groups.yahoo.com/group/saham/join
(Yahoo! ID required)
<*> To change settings via email:
mailto:[EMAIL PROTECTED]
mailto:[EMAIL PROTECTED]
<*> To unsubscribe from this group, send an email to:
[EMAIL PROTECTED]
<*> Your use of Yahoo! Groups is subject to:
http://docs.yahoo.com/info/terms/
