'We should have better clarity in the second half of this year and expect markets to start to stabilise. Globally, stock markets are attractively priced after the brutal sell-down in 2008 and we see great value in the European, Asia ex-Japan and Japanese markets.
'We remain optimistic that with the multiple stimulus packages put in place by the various governments, and together with their accommodative monetary policies, a global economic depression will be avoided.'
Mr Albert Lam, investment director at IPP Financial Advisers
'Unemployment will rise as companies go through cost restructuring, resulting in a higher level of retrenchment. Both non-oil domestic exports and oil-related product exports will be weak as most developed economies remain in recession, while emerging economies see sharp slowdowns.
'Globally, the situation will be similar, where unemployment will increase in many different countries. Consumer sales will slacken, housing prices will continue to decline. We can also expect an increase in corporate loan defaults as businesses find it harder to operate.
'Based on fundamental analysis of financial ratios such as price-to-book and price-to-earnings, equity markets are at attractive valuation. However, it is possible to see the cheap getting cheaper as companies report lower sales revenue and earnings.
'Using technical analysis, we see that equity markets are trying to find a bottom. In the process of doing so, we may see spikes of volatility, or even a further sell-down to a new market low.
'Geo-political risk is something that we need to be mindful of. For example, when Israel and Palestine were engaged in fighting three weeks back, we saw a sudden spike in crude futures prices as people got fearful whether Middle East oil could reach other parts of the world.
'In terms of recovery, we expect the Asia-Pacific to be one of the first regions to bounce back, with China likely to lead. This is because of the enormous stimulus efforts undertaken by the Chinese government.'
Ms Mah Ching Cheng, research manager at Fundsupermart
'We expect the Singapore economy to slow between -2 per cent to -1 per cent this year - a narrower estimate than the Government's. I think that the economic data for the first half of this year, in comparison to the first half of last year, will remain weak. But recoveries often happen when the economy recovers from a low base. By the end of this year, we are hopeful that economic figures will start to look more positive again in comparison to the first half. By then the stimulus packages by the various governments would have taken some effect.
'Singapore equity investors could possibly be waiting out for slight positives in the economy before investing more aggressively into equity markets. That leads us to think that the second half of this year will see greater stability and more sustainable uptrends in equities.'
This article was first published in The Straits Times on January 25, 2009.
