Monday, July 7, 2008

COE Prediction - July 2008 Bidding Exercise

My poll for visitors closed with four responses - 1 expected higher quota premium, 0 expected flat and 3 expected lower quota premium. With many news reports on recent inflation and uncertainty of crude oil price, it came as no surprise as the four pumps see an increase in price. I would also predict a lower quota premium but will take a position for an increase in quota premium for these reasons:
1. The elapse time between the last bidding exercise and this one is three weeks and thus, although the expected orders per week should be down, a 50% extra time would accumulate more in terms of absolute numbers.
2. The pricing is now closely pegged to the stablized quota premiums over the last 2 bidding exercises so dealers should have priced with reasonable tolerance.
3. The increase in pump prices would also encouraged motorists with guzzlers to replace them with a hybrid or CNG car in view of the lower car price and savings in fuel.

The next bidding exercise should see a mild increase before coming down in the 2nd bidding exercise in July.

Prediction on July 7:
Category A: $15,000-16,000
Category B: $15,000-16,000

Verdict on July 9:
Category A: $14,685
Category B: $15,501

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