time to go contrarian...
Fastest recovery on record is cause for concern
Sentiment index reaches heady, pre-crisis levels of Q3 2007
By TEH HOOI LING
(SINGAPORE) While the jury is still out on whether the recovery we are seeing today will be ‘V’ or a ‘W’ shaped, investors are becoming as euphoric as they were during the height of the stock market boom in the third quarter of 2007 - which is worrying some market observers.
Last week, International Netherlands Group (ING), a global financial institution based in Netherlands, released its ING Investor Dashboard Sentiment Index for 13 markets in the Asia Pacific.
Almost all Asian countries reported consecutive improvements in investor sentiment during the second and third quarters. But a fact that escaped most write-ups of the ING investor sentiment index was that the index has reached the heady, pre-crisis levels of the third quarter 2007.
That was when the outlook was considered ultra-rosy and the Dow Jones Industrial Index was at 13,895 points, en-route to hit 14,164 points just 10 days later. In Singapore, the Straits Times Index ended at 3,645.41 on Sept 28, 2007, and climbed to a record high of 3,831.19 on Oct 11, 2007.
So has investor sentiment run ahead of fundamentals? Noted a savvy private investor: ‘The numbers suggest strongly we are at, or close to, a short-term top.’
