1. CENTER FOR
ASSET
MANAGEMENT
RESEARCH &
INVESTMENTS
Panel Discussion
Investment Opportunities in 2H 2010 and beyond:
Singapore, Asia and Global Markets
Moderated by
Joseph Cherian
May 22, 2010
Alumni Homecoming Conference & Dinner 2010

2. The Art of Forecasting
Big Banks’ US$ Outlook for 2010:
• US$ has limited downside with respect to Yen and Euro. Cyclical
near-term weakness followed by gradual dollar recovery further out
• If global economic growth disappoints, US$ will strengthen
• US$ will remain weak but strengthen in late 2010
• US$ downside limited, in fact likely to rally significantly against Euro,
especially given the US$-funded carry trade is probably overdone
Forecasts dated Jan 2010!!
TURNS OUT BIG BANKS ARE BECOMING GOOD AT FORECASTING FX!

3. The Year-to-Date Empirical Evidence
Euro | Yen | SG$ versus US$ Source: Bloomberg
EUR weakens significantly
JPY slight strengthening
SGD flat

4. The Year-to-Date Empirical Evidence
Euro | US$ | Yen versus SG$ Source: Bloomberg
EUR weakens significantly
USD flat
JPY slight strengthening

5. Comparing Stock Index Price Returns (in USD)
Source: Bloomberg
• From its Mar 2009 lows, Straits Times Idx the best performing on a 1YR basis
Order: Straits Times Index, MSCI Asia Apex 50, S&P 500, Nikkei 225
• On a Year-to-Date basis, S&P 500 down the least
Order: S&P 500, Nikkei 225, Straits Times Index, MSCI Asia Apex 50

6. Comparing Valuations
Source: Bloomberg
10YR Median: 17.8
2 ½YR Median: 11.5
10YR Median: 15.0
10 YR Median: 14.3
10YR Median: 25.4

7. Volatility Index (VIX)
Reflecting Market Sentiment? Source: Bloomberg
• 2009 was forecasted to be one of
the worse periods in the investment Closed at 45.8 on 20/05/10!
environment, but it turned out ok Reduction in risk appetite?
10YR Median: 17.8
(STI: 74.7%; HSI: 56.6%; SPX:
26.5%; NKY: 18.4%)
• Which by 2010, heralded
proclamations that the global
economic recovery was here to stay!
10YR Median: 15.0
• VIX now at 46, 10-year average is 21
• But the recent Euro zone sovereign debt crisis, increase in U.S. jobless claims, and
drop in Leading Economic Indicators (LEI) are bringing new worries and concerns
• Would this be unfavorable for Equities and the Dollar? Favorable for Treasuries and
10YR Median: 25.4
Gold?
• Unfavorable for Cyclicals, Telecom, Financials?