re: market oversold hi guys,good report i received this...

re: market oversold hi guys,
good report i received this morning...adds a bit of context to this situation

"The following are three key points and an investment conclusion post the Japanese earthquake from BCA Research, which we discussed at today?s morning meeting.

1. The output loss in Japan?s economy could be notable and the disaster could even trigger a ?technical recession?. However, this is likely to be short lived as reconstruction spending should kick in sometime in the second quarter, pushing up the growth rate.

2. The 1995 Kobe earthquake triggered a wave of repatriation of overseas assets by Japanese insurance companies to cover losses incurred at home. A similar phenomenon could be seen again and this will weigh on higher yielding currencies, ie the Australian dollar, as many Japanese institutions have played the yen carry trade.

3. Finally, the impact of this disaster on the rest of the world?s economy will be minimal. Japan?s contribution to global growth over the last five years has been very small and it represents only 7% of the global economy which, as a comparison, is the same size as Eastern Europe or Latin America.

Conclusion: ?we should keep in mind that this disaster will neither end the global business-cycle expansion, nor will it change the earnings outlook for the major economies. Therefore, any additional weakness in key global averages should be viewed as a buying opportunity?


Bell Potter Securities Limited
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GPO Box 4718, Melbourne VIC 3001