DO NOT GET TOO EXCITED ABOUT MARKETS ON MONDAY.... Yes the SBP has cut the rate by 100 BPS. If you knew that there will be rain in the evening and you took the umbrella with you to wherever you were going, you would just be RELIEVED, not ecstatic. If you were NOT EXPECTING any rain but rain started and you found an umbrella by chance and to your own surprise in your cars back seat, THEN YOU WILL BE ECSTATIC. Point being.... This cut was already expected..its worked into the markets already to a major extent. This does not mean that when the markets open up with a BANG on Monday that you go and start buying everything in sight. Yes the markets will be up..No Doubt, but most of the beneficiaries of this cut have to a major extent already seen the PRICE HIKE in their stocks. So be careful what you buy and more importantly...WHY you want to buy it. For the long term investors, Yes it is great news... KEEP HOLDING on to the Stocks i recommended on December 28th 2014, in my post. I am sure you are already enjoy your gains in them tremendously since December 28th. Anybody can SELECT and buy stocks AFTER the rate cut is ANNOUNCED.... MARKET VISION is buying stocks that will do GOOD without the rate cut and GREATER if the rate is cut. That was the basis for December 28th post. Bigger news is ECB announcing a 1.3 Trillion Euro QE. 70 Billion USD a month till September 2016. Now That Is Positive but ONLY if it comes with a Financial Sector Reforms. Without the reforms, i see another European Disaster in the making post this QE period. Buying of Sovereign Instruments by ECB is NOT going to resolve matters on a permanent basis.
Posted on: Sat, 24 Jan 2015 12:31:33 +0000