Ras Al Khaimah, UAE (PRWEB) June 23, 2014
Grace Century, an international research and private equity company based out of Ras Al Khaimah in the UAE, has been forced to give extended and revised predictions for the second half of 2014, due to many of its forecasts being met early. This year’s predictions were very accurate, with the exception of oil (see 2013 press release).
While these extended and revised annual global and regional financial predications are available in detail to Grace Century members, the company has released a brief overview to the public:
Most banks have seen multi-year highs in their equity prices. We expect the banking sector to remain firm.
As predicted, despite rising rates in 2013, and briefly touching 3% in the U.S. on the 10 year bond, we saw an overall weakening of the U.S. Dollar. Scott Wolf, Director of Research for Grace Century says, “We see the U.S. Dollar still weakening and U.S. rates rising past 3%. Again, we emphasize that this is against the norm and contrary to mainstream analysts. The Sterling versus the Dollar has just hit 6 -year highs, at $1.70, which was our original objective. The U.K. looks to be the first to abandon the ‘dovish’ policy. As stated before, the weaker the dollar; the less attractive Dollar denominated asset class becomes. That psychology hasn’t yet taken hold,” says Wolf. ”We would use any move above $1.70 as an opportunity to start moving back into the U.S. Dollar, in incremental tiers. For instance, exchange some at $1.70, some at $1.74 and some at $1.78. The weaker Dollar will force U.S. rates up, and thus ultimately the Dollar,” he clarified. Like 4 banks, each on a corner; you will deposit in the one giving the most (all other factors being equal).
According to Wolf, “We got our early surge in the Euro vs the Yen past 140, however we still have not seen any meaningful stock Market correction. This shows the amount of money waiting for the drop and thus underpinning support.”
Stock Market Indices’
As previously stated, Grace Century feels that the Markets are a freight train, and one not to stand in front of. Dividend hunters have had no where else to go but to dividend stocks. The Market has ignored macro geopolitical crises in Russia/Ukraine, Syria, and now Iraq. The Market is telling you, as well as other indicators like gold and oil, that this will not have direct effect on mainstream Markets.
The Market of course is contingent upon interest rates with the exception of locations such as Dubai. Since the announcement of the Expo 2020 in the U.A.E Emirate, prices have about doubled. This has driven many residents to other Emirates where prices could be as much as 65% cheaper for comparable or even better accommodations. That shift forced those locations to go up as well. We will see this phenomenon through the next few years until more developments are re-started after the 2008 problems, and new ones come on line.
Gold & Oil
As warned, prices have stayed in a range. The real risk, after the recent turmoil and lack of reaction, is now downside. We would still not buy metals, and if owned, we would sell half of the holdings. The world unrest will continue to underpin gold, but we still really don’t see any reason to buy it, or sell it. As far as Oil, unrest did push prices higher but not anywhere close to what one would expect. This is because other producers will make up the shortfall from any Iraqi/Syrian disruption. We continue to look for opportunities to the downside and maintain our $75/barrel objective.
Grace Century reiterated, “These are our opinions and we recognize that some are contrary to Market’s opinion.”
About Grace Century
Grace Century, FZ LLC is an International research and private equity consultancy located in Ras Al Khaimah (north of Dubai) in the United Arab Emirates (UAE). Grace Century specializes in “game-changing” life science and health related private equity projects. For more information, visit: http://gracecentury.com.