Things to look at for 2009H1

Here are the things that I personally believe will be the interesting areas to look at for the first half of 2009. In the investment world, always good to be an early bird...

1. The fundamentals of commodities are unimpaired even since the credit crunch and the deepening of the economic crisis. Farmers cannot get loans for fertilizer now. Minners cannot get loans to open new mines. Oil companies are delaying or cancelling projects for oil exploration and developments. So we are going to have some serious, serious supply problems before too much longer.

2. Again, the shipping industry will probably benefit from the widening of oil price contango (the future price is higher than the spot price), as investors might be in anticipation of profit from higher oil prices in the future and book the tankers with options to use them as storage facility. Therefore, the shipping cost will probably bottom up from their current low level.

3. Another interesting idea is to look at British Pound. Since reaching a 26-year high of $2.1161 in November 2007, the currency has dropped 30 percent. In the past two decades, the five major declines in the pound averaged about 22 percent from peak to trough against the dollar, according to data compiled by Bloomberg. it is possible that the pound’s recent 26 percent slide may be coming to an end. So be aware of any non-negative developments in the economy in the coming weeks, there might be signs for entering the long side of Pound.

4. The current crisis has exposed severe shortcomings in banks’ ability to cope with a drying up of liquidity, largely because their reserves were insufficient or held in debt instruments that proved impossible to sell when the market turned. In an effort to boost banks’ liquidity reserves, the regulators around the world would probably recommend a proportion of banks' assets should be in the form of highly liquid government bonds. This would have a far-reaching impact. as many institutions will need to significantly reshape their business model over the next few years as a result. Therefore, highly liquidity assets, especially government bonds will be better off as demands pick up.