By Cho Jin-seo
Staff reporter
With economic uncertainty growing both at home and abroad, analysts' outlooks over the second half of the year seem to be oceans apart.
Some think recoveries in China and the United States will lead the world into a bull market. But others see that unpredictable events such as the Euro-crisis, North Korean brinkmanship and the fluctuation of commodity prices will leave the global economy at risk of a double-dip recession, as has happened so far this month.
One of the most positive voices has come from the OECD, which last week upgraded the world's growth rate this year to 4.6 percent from its earlier forecast of 3.4 percent. The main reason behind this upbeat forecast was, of course, ``Chimerica.''
The OECD thinks China will post a staggering 11.1 percent growth in gross domestic product (GDP). It said the United States will see 3.2 percent, which is much smaller, but still far healthier than the 1.2 percent recovery expected from Europe.
Partly relying on the OECD report, some stock analysts in Korea have begun to produce rosy reports. Hanwha Securities suggested Sunday that the KOSPI will hit bottom in the third quarter of 2010, and then began to head over 2,000 next year.
"We think that possible further adjustments in the market will be a bull market correction, and not the beginning of a bear market," the report said. "A long-term rise will start in the second half of the year, which will continue into 2011." The report cites four reasons for this bull market theory ― the stabilization of financial performances of firms, reduced uncertainty in Europe and America, the growth of domestic consumption in China, and the political and economic stabilization of the United States.
Such a view is shared by others. Samsung Securities say that foreign investment will pour into Korea once the European crisis is subdued as early as June.
On the other hand, less enthusiastic analysts say that a real concern is increasing volatility in the market, exacerbated by a lack of consensus among investors.
For example, the U.S. stock market, a benchmark of the global economy, ended downbeat last Friday as a credit-rating agency downgraded Spain, while analysis differs on whether this signals the beginning of the end of the crisis, or the end of the beginning of one.
"In the coming week, volatility in the market will continue to expand, since there are expectations on technical rebounds in the stock market, as well as long-term worry on the European debt crisis and budget cuts," Hanwha said.
An interesting metaphor is used in the Hanwha Securities report. "Stock investment has many common factors with poker. To make money in poker, you need to have a good hand. In the stock market, a good hand is a good fundamental in operations...... and the cards in our hands are not too bad now."
The report could have written in a slightly different tone, if the authors had thought about what every Las Vegas visitor knows ― that poor poker players lose big not because their hands are worse than others, but because they tend to be over-confident when their hands look good.