Far East Capital Newsletter
Hoping for improvements in the new financial year
30 Jun 2024

In This Issue

Hoping for improvements in the new financial year

We have just closed the last week of June, which turned out to be one of the weakest Junes for several years. Looking back over the last six months the dominant pattern has been an apparent end of selling, then a slight recovery to give us hope, than another downturn that has dashed our hopes - repeatedly. The downturn started with interest rate rises and it has continued beyond that period. Money has been made in special situations but the trend has definitely been against us.

The problem is that in this type of market liquidity dries up along with confidence. No-one has enough cash left to behave bravely, so even the standout buying opportunities can be largely ignored. Nevertheless, this is the type of market to be buying, with the potential to make huge trading profits over the next two years, but it would be useful to have someone advise us accurately when we have hit the bottom.

We are unlikely to see one specific event that signals the bottom of the market. The chances of that scenario have faded. Rather, we will see an extended period of gently improving confidence, in patches. There will be a gradual feeling that things are improving, being expressed with caution rather than enthusiasm. Could the end on the financial year be the turning point? Maybe, but time will tell. 

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