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Another article demonstrating frothiness?

The Straits Times
Published on Jan 11, 2013
Stocks will be year's top performers, says DBS

Central banks have helped allay fears; some market correction likely

By Alvin Foo

STOCKS will be the top-performing asset class in 2013, said DBS Bank yesterday.

DBS Private Bank chief investment officer Lim Say Boon told a media briefing that a concerted wave of central bank intervention has kept the fear of extreme market risk at bay. But he warned that a temporary equities correction could be round the corner after the recent exuberance.

Mr Lim said: "There's been so much fear in the market over the last four years that the market's suffering from tail-risk exhaustion." Such worries include a break-up of the euro zone and the United States fiscal cliff.

He added: "As long as central bankers say we'll give unlimited support, then tail risk is likely to be managed and the market returns to normal risk."

The improved investor risk appetite is reflected in the Vix Index - the best gauge of investors' fear on Wall Street - which tumbled to a 5½-year low recently.

Key Asian markets have mostly seen a sterling start to 2013, with Hong Kong's Hang Seng Index 3 per cent higher and Singapore's Straits Times Index up 2 per cent.

But Mr Lim warned: "There will be volatility. A correction is probably due now, as we've seen quite a run-up. But I think prices will grind higher in the course of the year."

He has a "moderately positive" outlook on the global economy as the US housing market has bottomed out and the economy is on the mend, and China is re-focusing on stimulating its economy.

Mr Lim believes that Asian equities excluding Japan will outperform US ones. A Citigroup funds flow report showed a 17th straight week of inflows into Asia.

DBS Group Research noted: "A more stable investment environment, sustained low interest rate environment and the strong Singdollar will continue to attract capital inflows into Singapore."

Mr Lim is more upbeat about the Hang Seng than the STI, citing cheaper valuations. He also prefers the HSCEI, the main index tracking China firms listed in Hong Kong, over the Hang Seng, and A-shares over H-shares.

HSBC Global Asset Management is also upbeat on Asian equities this year. Its Asia-Pacific chief investment officer, Mr Bill Maldonado, said: "In Asia, valuations have collapsed but profitability has not, which suggests a fundamental opportunity... in equities, especially China and Korea."
pls buy more stocks, preferably thru vickers!