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DAR Wong: Fed Rates Not Raised; 2 Things Investors Can Take Note Of
Aspire, Thought Leaders | 18 September 2015
By: Chen Xushuang
Articles (26) Profile

The US Federal Reserve has decided to leave its interest-rate target unchanged. The reasons given are that the economy has not recovered enough, as well as slowing job growth, and the resulting low inflation, which further lessens the need to raise interest rates.

What This Means

Basically, no change is happening for now. Doubts on the effectiveness of the anticipated monetary tools have not been resolved, and there is no conclusion to make. But at least, this also means that there will be no new uncertainty over whether a rate hike is a one-off, or if there would be more to come.

With regards to this issue, we have also interviewed active market trader, registered fund manager, educator and author Mr DAR Wong on his views.

Like many economic analysts, DAR thinks that the US has yet to achieve enough capacity and financial bullets for a proper rate hike. Thus he does not expect the Federal Open Market Committee (FOMC) to raise interest rates any time soon. In fact, he foresees continued economic slowdown for at least the next 2-3 months, till the end of 2015. Thus he stated that the situation of a short term hike followed by a slowdown in the long term is quite unlikely. On the other hand, he opined that a gradual long term increase of rates, with no change in the short run, “makes not much meaning” to the market.

Investors’ Takeaway

Expect Slowdown in Asia Too

Investors should take note that as the US economy faces a slowdown, growth in Southeast Asia will be dragged down as well. DAR also stated that China is already leading the slowdown. As a result, investors can expect lower liquidity in the market on a worldwide scale, he said.

SGD to Strengthen, Growth of Oil Sector

However, DAR noted that the recent Singapore Interbank Offered Rate (SIBOR) has risen, probably due to previous anticipation of the US interest rate lift-off. He said that this would result in the strengthening of the Singapore Dollar, and with nothing happening on the US side, the USD/SGD ratio might actually decrease to around 1.38 or 1.37.

“This also means a stronger purchasing power for Singapore”, said DAR Wong, “and if we were to look at the oil sector for instance, oil would become cheaper. “

“For a country like Singapore where the oil industry forms an integral part of the economy, we rely on this area to stimulate economic growth.”

Follwing this reasoning, investors can perhaps look forward to and place their bets on the growth of companies in the oil industry.

Still worried about when and how much would the US Federal Reserve hike interest rates? Do you have burning questions that you want to ask regarding the China economic slowdown and SHCOMP nosedive in June? Are you confused if any of the external factors from other countries in Asia will affect your Singapore stocks portfolio?

Catch renowned investors and speakers with rich experience in the stock markets, who have had witnessed multiple stock market crashes and global recessions over the years at Shares Investment Conference 2015!

Speaker profiles

1. Dr Chan Yan Chong, a renowned investor with more than 25 years of experience and the MBA programme director & associate professor of business school at the City University of Hong Kong.

2. Kevin Gin (CFA), the Founder and Principal of Alpha Capital. He was the former COO for CITIC Securities, Head of Singapore and Regional Real Estate Research for Kleinwort Benson Securities Asia (now part of Credit Suisse) and Head of Greater China Property Research with Yuanta Securities (Hong Kong)

3. Louis Wong, one of the most experienced fund managers in Hong Kong. He has over 25-years of solid experience and track record in the financial market. He was awarded Best Financial Analyst for 3 years by the Putonghua Channel of Radio Television Hong Kong and is also a part-time instructor of several investment courses in various Hong Kong universities.

4. Daniel Loh, an investment coach that specialises in equities and derivatives trading, he appears regularly on local TV financial programmes like “Good morning Singapore” and “Hello Singapore”.

As a Communications Studies graduate specialising in journalism, Xushuang is keen to observe and explore issues that readers want to know more about, and to deliver quality content through engaging writing.

Please click here for more information about this author.

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