You know that IPO fever is on when IPOs becomes one of the common dinner conversation topics with different groups of people.
GLP, MIT and China related companies. Everything seems to be hot – even SIA bonds and DBS preference shares.
We are in a period of low interest rates. This encourages borrowing and puts a damper on savings as extreme low interest rates are forcing people to look for alternative investments.
High interest rates, on the other hand, discourages borrowing and makes people more willing to leave their money in the banks.
Despite the huge amount of capital raising in the financial markets, there has been sufficient liquidity to meet all the demand.
How long will this party last? Property prices that increase at a rate faster than income will one day have to close the gap.
When the clock strike twelve, the carry trade reversal might come fast and furious.
Watch this interview by legendary investor Jeremy Grantham. There are times when sitting on some cash might just be useful.