January
23, 2014
I
just want to wish everyone a wonderful start to 2014 and welcome back from the
holiday season. It is time again to review the economic outlook and forecasts
for 2014 and what better way to project the future of the stock market, real
estate market in world currencies than in a personal word through this blog.
You
may tend to notice an ongoing theme as my blogs progress to provide broad
overviews both globally and for the G8 and G20 countries. These broad overviews
will include projections and developments in stock markets, real estate markets
and currency trends.
Global
Movements
In
the first few weeks of 2014 the US market saw slight correction but overall the
US dollar fundamentals remain strong and I predict will continue to perform
bullishly until at least 2015. The
slight dip in American employment and payroll numbers is what forced the slight
correction, yet this is already being
shaken off.
US
market will see growth in 2014 and the placement of the new Federal
Reserve Chairwoman is a good sign for the start of that growth. Within the
first couple of weeks we also saw the stabilization of the price of oil and
other commodities which started the bullish trend early. The numbers coming out
of the European Trade Union show a stable slow recovery that could extend for
the next two years.
Spain
kicked off the new year with less unemployment claims than in the previous
month showing positive signs of growth. Similar signs were also seen in Japan
and China for quick start to 2014 and economic growth. In areas of political
unrest, Turkey will continue to see
turmoil and economic downturn as the country’s political activities
continue to dog their economy. With $100 billion lost to this political unrest,
the Turkish Lira will continue to fall.
Other
nations that are not part of the European economic Union will continue to see
their currencies
fall as strong economic blocs in North America, Europe and Asia continue to
dominate. The South African Rand, the Polish Zloty, and the Hungarian Forint will
also see their currencies devalued through 2014.
Unfortunately
the Canadian
dollar will also move lower along with a number of other Western nations
against the greenback as the US economy continues to improve. The Canadian
dollar will slide to at least $0.90 relative to the US dollar, the euro will
correct down to 1.32 Euros, the British pound will fall to 1.60 GBP to the US
dollar - all showing reduced vigour against the American market.
Precious metals including
gold and silver may peak slightly in 2014 but will generally fall possibly to
pre-2009 levels as commodity corrections take place. Gold will see its value fall
to $1,200 an ounce and should remain stable at that level. Gold has lost its
shine as individual and institutional investors will be looking for stock
market purchases to exit the precious metals category.
Market
specifics
There
have been a number of market specific actions to note in the beginning of
January that I will discuss individually.
Starting
with the US and its growth potential through 2020, the majority of which will
come from certain
strong industry sectors including oil and gas, tech, and finance which are
all showing strong growth dynamics already. Certain high-value stocks within
tech (especially) may see slight corrections but blue chip stocks generally are
coming back in share price.
In
the European Union things will continue to stabilize and slow growth will
continue to materialize due to the measures taken to shore up the European
economy through major banking initiatives including the requirement: that
European banks attain certain
levels of liquid assets in order to back their valuations. Many of these
institutions are following these requirements by selling off assets or writing
down debts. As an example, Lloyd’s of London increased their share price by 35%
merely by selling off non-core assets. Through this selloff the banks have
achieved stable footing and can look toward growth. The threat to the Euro as a
currency has finally been put to bed as Germany has recommitted itself to the currency
and the threat of the Euro disintegration is completely evaporated.
In
Asia, China and Japan continue to be economic powerhouses with China estimated
to surpass the US as the largest economy in the world as early as 2015, which
is five years earlier than previously predicted by most economists. As China
continues its amazing growth trend it will boost the economies of Asia and
the world. Japan also took the necessary steps to bolster its economy early and
is reaping the rewards as the Yen is at a five-year high, exports are up and
continue to grow.
Real
Estate Developments
As
mentioned in my previous blog, real estate markets in urban centers and Western
nations will continue to grow and be in demand. Proof of this has already been
established as the growth trend of apartment
sales in Manhattan is the highest ever showing major markets for real
estate are already coming back. Furthermore, the number of US building permits
are up substantially increasing the overall real estate development numbers.
Indicators
throughout the globe are coming in to provide further proof of the possible
boom in real estate development on the horizon. The UK has removed all housing
support and government initiatives as the need for such stimulus is no longer
needed. Another hotspot outside of the traditional Western markets includes
Dubai, which has been awarded
the 2020 Expo and will see a substantial increase in investment and
visitors to the area in the next five years – further increasing the demand for
real estate development in the area.
Lastly,
one of the few economies that did not experience the major global upheaval as
the rest of the world, the Canadian real estate market proves to be
continuously booming especially in consideration of its development pricing
next to other major markets. Although the GTA as a whole will see continued
growth, more attention and development will be seen between Toronto and Niagara
Falls since the government has announced plans to extend the 407 highway to
Niagara Falls and the GO train will be expanded to Grimsby. Through these
recent announcement, major real estate developments are expected in Burlington,
Hamilton and Grimsby through to Niagara Falls.
Wishing
you all the best in 2014,
Liaquat
Mian
Boilerplate
Mr.
Liaquat Mian is the CEO of LJM Developments Inc, based in Burlington, Ontario.
LJM’s core focus is residential and commercial real estate development in the
GTA to Montréal corridor. LJM has also achieved remarkable investment returns
on its diverse portfolio of global real estate, currency and stock investments
since its inception. Find more information at www.ljmdevelopments.ca
Legal Disclaimer
The
opinions stated in this blog are those solely of Mr. Liaquat Mian, and do not
represent financial or investment advice, and may not represent L JM
developments. Individuals must seek independent qualified financial advice from
a licensed financial services provider before making any investments. Opinions
and forward looking statements in this blog should not be used for making
financial decisions or investments. Investors must be aware of the risks
involved in making investments and must seek professional advice. This blog is
purely an opinion blog by Liaquat Mian.
