IRCo's WEEKLY MARKET SNAPSHOT: 27 - 31 December 2010

IRCo's DCP almost touched US$5.0 per kg. on the last trading day of 2010, and it seems to cross that threshold in the coming week. Other cash prices in Thailand, Indonesia, and Malaysia also stayed in the range of 484 to 496 US cents/kg during Monday to Thursday due mainly to firm market fundamentals and strong crude oil futures. However, Tokyo and Shanghai rubber futures retreated slightly as investors took profits before the year 2010 would pass away. The year 2011 will be another golden year for agricultural produce worldwide, including natural rubber.

On the global stock markets, we would like to say that 2010 was a year for good investments in Wall Street, China, and other emerging market countries but Japan and European countries. The Dow Jones Industrial Average rose by almost 10.0% on the back of quantitative easing and a very low interest rate measures of the White House whereas Shanghai Composite Index was down almost 14.0% as Beijing wanted to cool down its overheated economy and to tame a fast rise in inflation. At the same time, the Japanese Nikkei 225 Index fell around 4.0% because of a strengthening Japanese yen against the greenback trimmed export earnings.

A healthy trend of emerging market countries has show a clear picture when the Thai Baht strengthened 8.86 % against the greenback while the Malaysian Ringgit and the Indonesian Rupiah strengthened 7.42% and 2.94% against the greenback for the whole year. The Chinese yuan strengthened only 2.64% against the greenback. Currency exchange rates of emerging market economies are likely to strengthen further in 2011 as there have been huge capital inflows into these countries due to the attractions of higher capital gains, higher interest rates, and higher gains in currency exchange rates.

(Source: http://www.irco.biz/MarketWise.php)