Global Share Prices Likely To Remain On Uptrend, Says Economist

By Tengku Noor Shamsiah Tengku Abdullah SINGAPORE, March 3 (Bernama) -- Global share prices are likely to remain on an uptrend, boosted by positive economic indicators, says Dr Shane Oliver, Head of Investment Strategy and Chief Economist at AMP Capital Investors. He said the news on the European debt crisis was mostly positive with the European Central Bank (ECB) providing another 529.5 billion euros in cheap three-year funding to banks. "The key point is that Italian, Spanish and French bond yields have now fallen to new lows for the year, adding to confidence that the debt crisis is being contained. "The theme of an ongoing global recovery remains, with most global economic indicators continuing to improve," he told Bernama. He said in the short-term, global shares are vulnerable to a consolidation or correction, given the high levels of investor sentiment,strong gains year to date and an oil price surge. "However, any pullback globally, is likely to be mild and with a broader upward trend. "Valuations are attractive, particularly against very low bond yields, the risk of a Euro-zone meltdown has faded, the momentum in global economic indicators is positive, global monetary conditions are getting more easier and there is lots of cash on the sidelines," he added. Oliver said the United States ISM Manufacturing Index was a notable exception, but it was largely offset by news of ongoing improvement, in the country's labour market. He said the Chinese Purchasing Managers Index (PMI) business conditions appears to be stabilising around levels consistent with about eight per cent growth. In Australia, the mining capital expenditure boom continues, but outside of mining, its pretty tough in many areas. Oliver said this was highlighted by the soft December half reporting season which has now essentially wrapped up. In China, Oliver said February data is likely to show a further cooling in inflation to 3.5 per cent, a slowing in industrial production and fixed asset investment and soft credit growth. All of this, he said, is expected to be consistent with further monetary easing. -- BERNAMA