Potpourri this week - UOBKH

Are the days of near-free money finally coming to an end? The ECB raised rates for the first time in 3 years last week, hard on the heels of China’s long-expected rate rise. Granted, it’s from very low levels in the EU – a 25bps hike to 1.25% won’t kill anyone, nor stave off any serious inflationary pressures. But it was critical in altering market expectations of cheap money into perpetuity for good. Now, interest rate and inflation expectations are increasing, not least because of the rise and rise of oil prices amid political unrest from Libya to Nigeria. But, pain for the rest of us is major gain for oil services companies such as Ezion. There may be some respite on the inflation front from rising CPO supply though; it will go some way to relieving the sting of higher food costs. Hardly beneficial news for share prices of the CPO stocks, hence Huey Chuen’s downgrade of the sector. Despite their downward trend, absolute prices remain high enough for very healthy profit margins – and tax revenues for Malaysia. A net crude exporter, Malaysia remains in a sweet spot and is very well-positioned to dish out election goodies, especially in the property and construction sectors. As Vincent says, profit from it! Finally your favourite sales team could not resist having their own say on the Royal Wedding of Prince William & Kate Middleton. Enjoy!