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Editorial Desk
Editorial Desk | 03 February 2012
By: Xavier Lim
Articles (51) Profile

China’s official Purchasing Managers’ Index (PMI) surprised the market by rising to 50.5 in January, from 50.3 in December, and beat analysts’ expectations of 49.5. Although market experts believe that the stronger-than-expected PMI signalled that a hard landing for China’s economy is unlikely, the data also erased expectations that the Beijing government will ease its monetary policy further in the near term.

Elsewhere, Japan logged a trade deficit of 2.49 trillion yen, its first annual trade deficit since 1980, raising questions of how much longer can the country depend on exports to service its huge public debt. At the same time, South Korea’s trade balance also swung into the red to register its first trade deficit of $1.96 billion in two years in January.

Meanwhile, all the European Union members except Britain and the Czech Republic agreed to a new treaty designed to strengthen accountability and keep a closer eye on member nations’ efforts to rein in overspending and resolve the region’s debt crisis.

On the other hand, US gross domestic product grew 2.8% in the fourth quarter, propelled by increases in consumer spending and business inventories, a nice acceleration in growth from the 1.8% in the third quarter and the 1.3% in the second quarter. However, the economic growth fell short of the expected 3% rate.

Back home, our purchasing managers’ index fell to 48.7 in January from 49.5 in December as demand for exports weakened amid a sputtering global economy.

Despite lingering concerns over the Eurozone debt crisis, US stocks still managed to record their best January performance since 1997. Our local bourse also followed suit to rise 9.8% for the month. Average daily volume traded also increased 61.1% to $1.5 billion and 60.4% to $1.2 billion respectively.

Macroeconomics aside, we have featured five REIT plays namely CapitaCommercial Trust, CapitaMall Trust, Frasers Centrepoint Trust, Parkway Life REIT and CapitaRetail China Trust in our In Focus section. Also, take a closer look on what lies ahead for the first four REITs from page 6 onwards.

While we think companies will continue to report strong final quarter earnings in the coming days, there may be a headline lurking around the corner that will shake out the upside momentum this months.

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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