Morgan Stanley: Global bearish market nearing climax
Global financial services major Morgan Stanley expects the bearish trend in global market nearing its climax and forecasts a strong possibility of bulls entry, if the continuous rise in commodity prices slows down.
Elaborating on the importance of oil prices in the global economy, the letter stated that in the first half of 2008, stock markets of most oil exporting countries soared to new highs, while those of oil importers plunged 15% on an average.
The report stated that India and Turkey rank near the bottom of the global stocks market league tables this year, as both the countries have extremely large oil import bills, running at nearly five percent of the GDP.
“They have no other major commodity exports to offset the oil price shock and also have few listed companies that are commodity plays,” it added.
Furthermore, the letter said that inflation may not be the crucial factor impacting a fall in the stock markets across the world.
Stocks in commodity exporting economies such as Russia and Nigeria, which have witnessed the most pronounced increase in inflation, could not have held up as well on a relative basis, the report stated. (Xinhua)
SUPPORT THE BUDAPEST BUSINESS JOURNAL
Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.