Slow start for Asian markets without any concrete move from IMF

Asian markets are set for a lower start today in the absence of any key, game changing policy announcements over the weekend. Losses are not expected to be significant and there could be a swing to late gains as overseas news flow develops. 

There wasn’t too much direction from the IMF over the weekend, but more of the same rhetoric. U.S. Treasury Secretary Timothy F. Geithner set the tone at the annual meeting in Washington by warning that failure to combat the Greek-led turmoil threatened “cascading default, bank runs and catastrophic risk.” 

Billionaire investor George Soros said “something needs to be done” to safeguard Europe’s banks because Greece may be unable to avoid default.

Commodity markets remain very fragile and will continue to remain so until the global growth picture improves.  There are some good trading opportunities to be had. Traders need not be long only. For example, the Gold/Silver ratio is up to 54x from 40x a couple of months ago, a healthy gain despite the large fall in gold price. 

In Australian corporate news, Mongolia’s push to take a bigger stake in Rio Tinto’s projects is an endorsement for the Australian operating environment. Good for medium term project development in Australia which still remains world’s best destination. 

Some more positive talk on Qantas, given its share price and its recent strategy to divert its international routes. Qantas shares are trading at a big discount to book value. 

AGM season will be kicking off over the next few weeks, ramping up by the end of October. Watch for comments on guidance and the impact on businesses from recent market downturn, particularly the financials.