Global oil demand ready to rebound

International Energy Agency says the world's thirst for crude could be revived next year as the global economy recovers.

By Ben Rooney, CNNMoney.com

NEW YORK (CNNMoney.com) -- World oil consumption will rebound next year as the global economy recovers from a deep slump, according to a report released Friday.

The Paris-based International Energy Agency said it expects global oil demand to grow 1.7% in 2010 to an average 86.1 million barrels per day. That's an increase of 350,000 barrels per day from its previous estimate.

Crude for November delivery rose 8 cents and settled at $71.77 a barrel. Oil prices had slipped earlier in the session as the U.S. dollar recovered some ground on speculation that the Federal Reserve could tighten monetary policy as the economy recovers.

In its monthly oil market report, the IEA said "buoyant economic activity in more oil intensive emerging countries" will help support demand next year. However, the group warned that next year's economic outlook "is still fraught with uncertainty."

Global oil demand in 2009 is expected to average 84.6 million barrels per day, according to the IEA. That's up 200,000 barrels per day from last month's forecast. But overall consumption in 2009 is still expected to be down 1.9% versus the year before.

Oil surged more than $2 in the previous session as the dollar fell to a 14-month low and a surprise profit from aluminum producer Alcoa (AA, Fortune 500) on Wednesday boosted economic recovery hopes.

The dollar rebounded Friday after Fed Chairman Ben Bernanke said late Thursday that the U.S. central bank could reverse its easy money policies as economic conditions improve to ward off inflation.

"My colleagues at the Federal Reserve and I believe that accommodative policies will likely be warranted for an extended period," Bernanke said. "At some point, however, as economic recovery takes hold, we will need to tighten monetary policy to prevent the emergence of an inflation problem down the road."

The greenback was up 0.3% against the euro to $1.4755. It gained 0.5% versus the British pound to $1.5993. Against the Japanese yen, the dollar rose 0.4% to ¥88.74.

Crude often falls when the dollar strengthens because a more robust greenback makes commodities priced in dollars more expensive for overseas buyers.

25 Best Warren Buffett Quotes on His Strategies, Investments, and Cheap Suits

He’s called the Oracle of Omaha, and for good reason: not only is he one of the best investors of all time, but he’s also a witty communicator.

Here are twenty-five awesome quotes from the man himself. I find these quotes to be especially comforting when you’re ‘financially depressed’–after all, he views a market slump as a good thing!–so I hope these can remind everyone that we just need to do the basics, and we”ll be OK. Be a consistent net saver, buy the market through ups and downs, be a decent human being, and rest easy.

On Investing

- “Rule No.1: Never lose money. Rule No.2: Never forget rule No.1.”
- “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”
- “Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”
- “We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.”
- “Why not invest your assets in the companies you really like? As Mae West said, “Too much of a good thing can be wonderful”.”

On Success

- “Of the billionaires I have known, money just brings out the basic traits in them. If they were jerks before they had money, they are simply jerks with a billion dollars.”
- “The business schools reward difficult complex behavior more than simple behavior, but simple behavior is more effective.”
- “You do things when the opportunities come along. I’ve had periods in my life when I’ve had a bundle of ideas come along, and I’ve had long dry spells. If I get an idea next week, I’ll do something. If not, I won’t do a damn thing.”
- “Can you really explain to a fish what it’s like to walk on land? One day on land is worth a thousand years of talking about it, and one day running a business has exactly the same kind of value.”
- “You only have to do a very few things right in your life so long as you don’t do too many things wrong.”

On Helping Others

- “If you’re in the luckiest 1 per cent of humanity, you owe it to the rest of humanity to think about the other 99 per cent.”
- “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”
- “I don’t have a problem with guilt about money. The way I see it is that my money represents an enormous number of claim checks on society. It’s like I have these little pieces of paper that I can turn into consumption. If I wanted to, I could hire 10,000 people to do nothing but paint my picture every day for the rest of my life. And the GNP would go up. But the utility of the product would be zilch, and I would be keeping those 10,000 people from doing AIDS research, or teaching, or nursing. I don’t do that though. I don’t use very many of those claim checks. There’s nothing material I want very much. And I’m going to give virtually all of those claim checks to charity when my wife and I die.”
- “It’s class warfare, my class is winning, but they shouldn’t be.”
- “My family won’t receive huge amounts of my net worth. That doesn’t mean they’ll get nothing. My children have already received some money from me and Susie and will receive more. I still believe in the philosophy - FORTUNE quoted me saying this 20 years ago - that a very rich person should leave his kids enough to do anything but not enough to do nothing.”

On Life

- “Chains of habit are too light to be felt until they are too heavy to be broken.”
- “We enjoy the process far more than the proceeds.”
- “You only find out who is swimming naked when the tide goes out.”
- “Someone’s sitting in the shade today because someone planted a tree a long time ago.”
- “A public-opinion poll is no substitute for thought.”

Funny Ones

- “A girl in a convertible is worth five in the phonebook.”
- “When they open that envelope, the first instruction is to take my pulse again.”
- “We believe that according the name ‘investors’ to institutions that trade actively is like calling someone who repeatedly engages in one-night stands a ‘romantic.’”
- “When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact.”
- “In the insurance business, there is no statute of limitation on stupidity.”

Obama: 'Learn lessons of Lehman'

In speech on Wall Street, president says bailouts are working and economy is stabilizing, but regulatory reform is needed to prevent future collapses.

By David Goldman

NEW YORK (CNNMoney.com) -- The bailouts have largely stabilized the financial system, but regulatory reform is needed to prevent a similar crisis from happening again, said President Obama in a speech delivered Monday on Wall Street.

Marking the anniversary of the Lehman Brothers collapse, which set off a series of events that led to last fall's financial crisis, Obama cautioned Wall Street to step lightly as the economy and financial sector recover.

"Normalcy cannot lead to complacency," Obama said. "Unfortunately, there are some in the financial industry who are misreading this moment. Instead of learning the lessons of Lehman and the crisis from which we are still recovering, they are choosing to ignore them."

"They do so not just at their own peril, but at our nation's," the president added.

Step up regulation. Economists said the president offered no new proposals, but instead used the bully pulpit to get Congress and regulators on board.

Lawmakers and some regulators have been resistant to some of the changes the administration has proposed. For instance, Federal Reserve Chairman Ben Bernanke has opposed a new consumer regulator, arguing that it's the Fed's job to protect consumers.

"The president needs to create enough of a groundswell to get this done," said Dan Seiver, professor of finance at San Diego State University. "Right now he's encountering resistance from regulators like the Fed .. but they were the ones asleep at the switch."

Obama said much more work is left to be done. The president called for more stringent rules to prevent the domino-effect if one large firm collapses. He said an overhaul of regulation must be done in a way that does not smother innovation, but "the old ways that led to this crisis cannot stand."

"We will not go back to the days of reckless behavior and unchecked excess at the heart of this crisis, where too many were motivated only by the appetite for quick kills and bloated bonuses," he said. "Those on Wall Street cannot resume taking risks without regard for consequences, and expect that next time, American taxpayers will be there to break their fall."

Obama reiterated a number of proposals that the administration has previously made, including a new Consumer Financial Protection Agency, closing loopholes and gaps in the regulatory system, and putting an end to "too big to fail" by creating resolution authority for non-bank financial institutions. Obama also called on foreign economies to join the United States in its regulatory effort for a coordinated response to the financial crisis.

"Restoring a willingness to take responsibility -- even when it is hard -- is at the heart of what we must do," said Obama. "Here on Wall Street, you have a responsibility. The reforms I've laid out will pass and these changes will become law. But one of the most important ways to rebuild the system stronger than before is to rebuild trust stronger than before -- and you do not have to wait for a new law to do that."

Bailout era not over. "Although I will never be satisfied while people are out of work and our financial system is weakened, we can be confident that the storms of the past two years are beginning to break," said Obama. "In fact, while there continues to be a need for government involvement to stabilize the financial system, that necessity is waning."

Taxpayers have lent hundreds of billions of dollars to systemically significant financial institutions and trillions more in lending programs aimed at easing the tight grip on lending. Obama said bailout money is flowing back to taxpayers, but "that doesn't mean taxpayers will escape the worst financial crisis in decades unscathed," he said.

Why I'm Happy to Hold Wealth in Gold and Silver

By Chris Weber

Now that the first half of 2009 is over, I have to say I'm very happy with the way gold, silver, and platinum have done this year. I've been keeping a large portion of my money in the metals for years.

I like the way that the spotlight has now turned away from them, but quietly – when you look back on the year so far – they all have had solid gains. Quiet gains; those are my favorite kind.

Gold has had three consecutive rising quarters now. But more important, it has been holding most of the huge gains of the bull market of recent years.

Most other assets that have jumped hugely spike up and then collapse for years: Think real estate and high tech stocks. But gold has been in a great bull market for a decade and, though still in a corrective phase, has still risen solidly for months.

It started the year at $880; at mid-year it is $926.70. That's a rise of 5.3%, or 10.6% annualized (though no one knows how the rest of the year will play out).

Again, to me, this is great action. Quietly, gold has added about one percent per month so far this year. And no one is talking about it. Huge falls have proven temporary, but these are what people focus on. All the while, over time, the price rises. I'd be happy to take a 10% annual rate of return consistently on anything.

And if double-digit annualized returns are what gold is giving when it is "sleeping," what will it do when it awakes?

Silver started the year at $11.33. At mid-year, it was $13.54. Again, maybe many are not satisfied. But do the math and you get a 19.5% return. That's nearly 40% annualized. What's to complain about? And even more so than with gold, the focus of the public is far from silver. You give me an asset that rises by nearly 20% in six months with no one watching it, and I'll be happy.

Finally, platinum climbed 27.5% in the first half of this year, the best of all. However, this one is the most volatile and thinly traded. Still, if the Dow had soared 20-something percent since the first of the year, everyone would be crowing.

And indeed, bullishness has returned on the stock markets. Most everyone now believes things will get great or continue great. But this kind of thinking for markets that have barely moved since 2009 began is misplaced. All that has happened is that they have risen from their March lows.

I expected this... Back in mid-March, when I suggested to my readers that one could buy virtually any stock, I said that a rally would cause great bullishness to return. And so it has. But one has been better off just by sitting in gold and silver and doing nothing else.

Moreover, the stock markets look quite vulnerable. The Dow Transport Index has not confirmed the last high in the Dow Industrials. And both the Dow and most other global stock markets have been doing nothing much for the past few weeks. Moreover, they have been doing it on ever-lower volume. It is possible that the bear market rally has seen its best days.

All this is why I'm happy to continue holding a large position in precious metals. Granted, their performance this year isn't as spectacular as many hoped it would be. But in gold, I own a relentlessly rising asset that benefits from the competitive currency devaluations I discussed last month. In today's world, that lets me sleep soundly every night.

Fund Managers Optimistic Over Longer Term

By FINTAN NG

ASIAN equity markets look more promising over the longer term but short-term indicators and macroeconomic fundamentals will need to be firmer first before regional bourses start to make a more sustainable climb, fund managers and analysts said.

Money continues to flow into Asian equity markets with second quarter (Q2) funds flow totalling US$12.7bil, the largest quarterly inflow since 2001, in stark contrast to outflows of US$4bil in Q4 of last year, according to Macquarie Research analysts in a report dated June 26.

But they noted that cash holdings of fund managers remained high at 2.85% of their portfolios versus the long-run average of 2.4%. “This may suggest that investors remain cautious about the rally,” said Henry Hon, an analyst at Macquarie.

Liquidity is a big factor presently supporting the performance of stock prices, indicating investors are staying close to the exits while the still relatively large cash holdings suggest any market pullback may not be large, he added.

Prudential Fund Management Bhd chief investment officer Yoon Mun Thim agrees, saying the local market has risen sharply but may run a little ahead of fundamentals.

Although pent-up demand and ample liquidity may provide support for a surprise on the upside in the latter part of the year, macroeconomic fundamentals will have to catch up before the markets can move to a higher level on a sustainable basis, according to Yoon.

“The FBM KLCI has risen 20.7% in the first-half (H1) and has factored in to a large extent improvements in the global economy and rising corporate activities but the easy money has been made and the market may be more challenging in the second half,” he said.

Potential risks that may disrupt the positive momentum include a more severe outbreak of the A (H1N1) flu and worse-than-expected economic or financial data coming from the US or Europe, he warned.

Yoon said although Malaysia’s valuations were not cheap compared to regional peers, the local market remained attractive as it was less volatile, with stocks which have predictable and sustainable earnings.

“Since Malaysia has seen the largest net outflow in the region especially in recent months, with improving relative valuations, we may see some potential asset allocation to our markets,” he reckoned.

Credit Agricole Asset Management Malaysia Sdn Bhd managing director Roslina Abdul Rahman told StarBizWeek that regional markets have had a brilliant run with the MSCI Asia Pacific ex-Japan index rising 31% while the FBM KLCI rose 23% in Q2.

“It is therefore reasonable to expect a consolidation in the next few months while we expect Q3 to be fairly quiet and range-bound pending more evidence of improvement in macroeconomic fundamentals before the next push higher,” she said.

Roslina said the next leg of market re-ratings would be earnings-driven set against a backdrop of still-healthy liquidity conditions. “The upcoming (local) Q2 earnings season will be an important indicator of current conditions,” she added.

Roslina said relative to the region, Malaysia’s valuations were not as compelling as its regional peers due to higher price-to-earnings ratios and lower growth rates with low trading liquidity.

“Regional fund managers have their focus on China, India and Indonesia. These economies have the strongest domestic growth stories in Asia,” she noted.

Roslina remains positive over the local bourse’s medium to long term performance following the recent liberalisation measures announced by the government.

“The abolishment of the affirmative action policies is a significant step in addressing Malaysia’s competitive challenges. Whilst the benefits are unlikely to be felt immediately, it is a step in the right direction and sends a positive signal to the market,” she said.

Meanwhile, Schroder Investments Ltd multiregional equities head Virginie Maisonneuve said in a report that the key global trends that will drive the world economy and equity markets remain demographic changes, climate change and the continued development of emerging economies.

“This trend will continue with China and India as the two biggest emerging economies,” she said, noting that China now manufactures around half of the personal computers in the world and 85% of DVDs while India provides around 10% of the world’s software services and 60% of the research and information technology services of Fortune 500 companies.

Both countries are also significant players in the global financial markets with over 20% of global foreign reserves and being heavily invested in US treasuries, according to Maisonneuve.

“By 2020, they are estimated to account for over 17% of world growth while the combined market capitalisation of China and India already nears that of Japan,” she said.

Share Prices To Trade In Tight Range Next Week

KUALA LUMPUR, July 11 (Bernama) -- Share prices on Bursa Malaysia are expected to see a tight range in trade next week, in the absence of fresh leads and renewed pessimism over the global economy recovery, said analysts.

SJ Securities technical analyst Phua Kwee Hock said that there was not much news to be expected during the month, to boost the local market.

"The market would be in consolidation mode this month," he added.

Meanwhile, MIMB Investment it its research note said there were many technical indicators to support a downside in the short term.

Low volume and the fact that the market was stuck in a tight trading range during the week, basically confirms the cautious sentiment of traders.

OSK Research in its assesment said that it maintains a bearish view towards the near-term market.

"We will likely see the sellers selling more aggressively.On the upside, continue to look for an immediate resistance level at the 1,070 points-level and support at 1,057-1,064 points," it said.

The market was mostly lower for the week ended with the new FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) making a bearish debut on Monday.

The Index comprises the 30 largest listed companies by market value with at least a 15 percent free float. Its constituents are also prime market movers and represent about 60-70 percent of the main board's market capitalisation.

Bursa Malaysia introduced the FTSE global index standard to attract instant recognition and credibility amongst international investors.

Analysts say that the adoption of the FBM KLCI will in the long run push companies to beef up their performance so as to be among the top 30 counters.

However, they also cautioned that the use of 30 counters as opposed to 100 under the KLCI, might lead to volatility as price movements in just one or two weighted counters could swing the market either way.

During the week, Bursa Malaysia also saw its first foreign listing.

China's fifth largest outdoor sportswear manufacturer, Xingquan International Sports Holdings Ltd, opened at a 12-sen premium of RM1.83 per share on its debut on the Main Board of Bursa Malaysia on Friday.

Its closed seven sen higher at RM1.78.

Xingquan expects to raise RM165 million from its initial public offering, of which 34 percent would be utilised for the company's expansion,including building a new factory costing RM132 million.

On a Friday-to-Friday basis, the FBM KLCI eased 5.53 points to close at 1,067.76 compared to last week's closing of 1,072.69.

The Finance Index improved 10.1 points to 8,552.22, the Plantation Index fell 115.02 points to 5,260.82 while the Industrial Index slipped 3.13 points to 2,372.38 and the FMBEmas declined 28.27 points to 7,197.74.

The FBM2BRD lost 15.58 points to 4,709.49, the FBMTOP 100 edged down 7.55 points to 7,007.81, the FBM70 widened 90.95 to 7,121.64 and the FBMMDQ dropped 109.58 points to 3,866.73.

Weekly turnover dropped to 3.396 billion shares valued at RM5.021 billion from 4.996 billion shares worth RM5.389 billion the previous week.

Volume on the Main Board shed to 3.0 billion shares valued at RM4.9 billion versus last week's 4.421 billion shares worth RM5.209 billion.

The Second Board's volume eased to 205.906 million shares valued at RM81.8 million from 304.794 million shares valued at RM115.711 million last week.

Turnover on the Mesdaq Market dropped to 112.37 million units worth RM18.622 million compared to 144.723 million shares worth RM24.697 million.

The volume of call warrants declined to 60.278 million worth RM10.046 million from yesterday's closing of 69.152 million valued at RM12.177 million.

-- BERNAMA

Prisoners Of Love: The New "Thriller" Re-enactment

Talk about deja view all over again. Earlier on 27th June 2009, the 1,500 orange-jumpsuit-clad inmates of the Cebu Provincial Detention & Rehabilitation Center on the east coast of Cebu Island in the Philippines reprised their phenomenally popular 2007 viral performance of Michael Jackson's "Thriller" in tribute to the King Of Pop, who died Thursday.