US sub-prime crisis far from over, warns Jim Rogers

May 9, 2008

US sub-prime crisis far from over, warns Jim Rogers

By Grace Ng

THE United States sub-prime crisis rocking world financial markets is not over by a long shot, warns investment guru Jim Rogers.

'I doubt that we're halfway through,' he said yesterday, adding that he expects more write-downs from European and US banks for their investments linked to delinquent US mortgages.

'We certainly haven't hit the bottom as far as I'm concerned.'

He is also pessimistic about oil prices, tipping that crude can 'go much, much higher', even passing the US$200-per-barrel-mark some pundits have predicted.

Oil hit about US$123 a barrel yesterday.

Mr Rogers, chairman of investment group Rogers Holdings, was speaking at the launch of the Barclays Global Agriculture Delta Fund.

The fund gives investors direct exposure to the performance of the Rogers International Commodity Index - Agriculture, which represents the value of 20 agricultural commodities futures contracts, including grain and cotton.

The index is reviewed annually by a committee chaired by Mr Rogers.

The Singapore-based American, who gained fame and fortune by co-founding the Quantum Fund with billionaire George Soros, is staking 'all his new money on commodities and China plays', and shunning the more traditional sectors amid the global financial turmoil.

He noted that agriculture is the 'most promising area of the commodities sector', as people are consuming more, but the supply and inventory levels of some agricultural products are at historic lows.

Mr Rogers is also bullish on China plays, particularly those listed in Singapore and Hong Kong, which are 'cheaper to buy' than those in China. He added that he bought some China stocks in Singapore yesterday .

He also observed that high-yielding commodity currencies like the Australian and New Zealand dollars remain good bets to hold, as he expects them to 'to do well'.

While the US dollar is losing its status as the world's reserve currency, Mr Rogers also noted that many investors are too pessimistic about the greenback, which he expects to rally.