Rank: Chief Joined: 8/4/2010 Posts: 8,977
|
wukan wrote:hisah wrote:wukan wrote:hisah wrote:
One week later after breaking below the psychological support this index has dumped 10pts (5%) to close at 190.99 today. Yesterday we had another upthrust bar which has come in two week later after the previous one on October 4th. This index is reflecting very bearish (negative) sentiments for an index that comprises the top 15 market heavyweights. Unless the political stalemate is amicably resolved as well as stimulus is injected into the sickly economy, bears will continue to wreak havoc in the market. If 2017 is not the flush out year then 2018 will likely be before the market can base out.
@hisah how will a stimulus work if there is a weak credit demand from private sector? "Year-on-year credit growth is at 1.7 per cent, but month-on-month we are on a negative territory," Jared Osoro, KBA's director for research and policy said at a briefing on Thursday.(Source BD) What will sustain the bulls in this kind of environment? Bears will screw us all the way to 2500 level for NSE 20 probably with an overshoot touching GFC lows. If you remove the political anxiety the demand will start to recover then you can inject the stimulus. However, without settling the former issue first then stimulus alone will not be effective. You inject stimulus when banks are not lending it out and capital utilization is low you end up with a comatose economy(stagflation). The solution is spending cuts, balancing the budget and lowering taxes, the private sector would do the rest. What you have outlined is true, but without a conducive political environment implementation of such becomes a difficult task. $15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
|