That cup of joe may turn to gold
IF YOU view your cup of coffee as a mere morning pick-me-up, look again. You may be sipping on the next big investment opportunity.
While prices for Arabica coffee have been sliding for some time, recent dry weather affecting plantations in Brazil has sent prices back on the upswing, said Phillip Futures senior commodities manager Avtar Sandu.
"Early last year, heavy rains also knocked flowers off the (coffee) plants and, now, there's a drought," said Mr Sandu. A bad harvest could well mean that prices of the coffee bean could surge.
Mr Sandu, who was speaking at the MyPaper Advance Series Seminar with Phillip Futures yesterday, said investors could look into "buying in the dips" when prices move down to between US$1.55 (S$2) and US$1.60 a pound.
On the whole, commodities ranging from Arabica coffee to gold are expected to perform better this year compared to the previous two years, due to a positive global economic outlook, he said.
Still, he advised the 200 participants who attended the seminar at the Singapore Press Holdings News Centre to pick their commodities wisely, and study factors such as supply-demand, weather and production.
Echoing Mr Sandu's positivity was Phillip Futures investment analyst Vanessa Tan, who gave a bullish prediction on how the Straits Times Index and the Morgan Stanley Capital International Singapore Free Index would perform.
Despite both indexes being pressured since the start of the year, Ms Tan said the "current pessimism" in the stock market is temporary. She explained that the weak data from the United States in January was brought about by a harsh winter, and was not an indication of the economy stalling. Government policies in China would also help engineer a "soft landing".
Phillip Capital (Malaysia) chief strategist Phua Lee Kerk agreed that things look bright, but added that risks remain. Tensions in the South China Sea could flare up, and the US Federal Reserve could fall into a quantitative-easing trap, he said.
SGX Academy professional trainer Wong Kon How, who touched on trading global currencies, shed insights on how traders could use gold as a benchmark to track the weakness of the US dollar.
The three-hour talk attracted people like business process analyst Nathan Zhou, 25.
"It's quite good to have experts discuss specific topics about trading products... It's quite beneficial for younger investors like myself," he said.