"Commodities will decline in the next six months,'' Faber, publisher of the Gloom, Boom and Doom Report, said at a press conference in Taipei on Thursday. Commodity prices will resume their gains after the correction, he said, with demand for oil doubling in the next 12 years.
Faber said Taiwan equities will outperform global stocks, while China "is not yet a buying opportunity.'' Taiwan's Taiex has dropped the least among Asian benchmark indexes this year and China's CSI 300 Index has slumped 44 per cent.
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Prices of commodities from oil to wheat have continued to surge in 2008 due to floods in Southeast Asia and the US and demand from India and China. Crude oil futures have doubled in the past 12 months.
Taiwan's Taiex Index has declined 8.2 per cent this year, the best performance in Asia. China's CSI 300 has tumbled the most in 2008 among benchmark indexes from the world's 20 biggest equity markets, as China took action to curtail rising consumer prices. The central bank required lenders to set aside a record amount of money as reserves this year after raising interest rates six times in 2007.
Faber also said he prefers Taiwanese to US technology companies, although the outlook for the industry is "bad.''