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Editorial Desk
Editorial Desk | 18 November 2011
By: Xavier Lim
Articles (51) Profile

With Italy’s 10-year bond yield spiking above 7%, its highest since the euro was launched in 1999, global equity markets swung into negative territory. However, these losses were partially recouped after Italy’s Senate approved a budget bill and Mario Monti, a former European Commissioner, was appointed as Italy’s prime minister.

Nonetheless, Italian borrowing costs quickly rose back above the “danger level” of 7%, and this time, French, Belgian and Spanish yields followed suit. This swiftly put investors back into panic mode.

With the spotlight tightly on Europe’s developments, our cover story this issue attempts a closer understanding of the possible endgames for the European debt debacle and its aftermath on the parties involved. Considering the damage brought about by Italy’s and Greece’s instability, would it make sense for the European Economic and Monetary Union to cut away its cancerous tumours? For details, turn to page 9 for our Europe coverage.

At the same time, we switch our attention to the impacts of the European Union nations’ stalled engine on Singapore’s pillars of growth – the exports and tourism sector. Home to the world’s second busiest container port, Singapore has had its domestic growth projection cut to 5% this year.

On to the brighter spots on the globe, Indonesia is hailed as the next rising star to join the coveted ranks of the BRIC. While the developed economies are deeply embroiled in their respective quagmire, the country is among the emerging economies slated to pick up the slack and power global growth. Flip to page 15 and find out about the potential of the country’s ‘demographic dividends’.

Also making it to our line-up is a write-up on Hong Kong’s economy. It managed to eke out a 0.1% growth in the third quarter, skirting a technical recession, even as exports slowed.

Given the continued uncertainty over the Eurozone sovereign debt crisis, we see no reason why investor sentiment would be improving in the next few weeks. Till there is greater political consensus to add clarity to the ensuing European turmoil, sit tight as the market goes on a roller coaster ride!

Armed with an arsenal of investment knowledge, Xavier is the Senior Research Editor at Shares Investment.

Please click here for more information about this author.


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