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QE3 Fever Fizzles; Growth Woes Back In Spotlight
Singapore Market Commentary | 28 September 2012
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After a rally fuelled by optimism over central bank stimulus measures, the boost from the Fed’s US$40b asset-buying plan weakened after Philly Fed President Charles Plosser questioned the effectiveness of the latest QE3 and markets slipped back into the red in the second week of the fortnight.

Mounting fears of a recession escalated as anti-austerity protests in Spain refocused the nation’s funding problems with Spanish bond yields topping 6% on 26 Sep-12 while Germanyís relative resilience to the Eurozone debt crisis has been fraying with its IFO business confidence index falling for a fifth straight month to 101.4 in September. That said, Spain’s announcement of its economic reform plans eased some fears.

While sentiment in Asia remained vulnerable, news that the People’s Bank of China had injected Rmb365b into the money market, the highest weekly injection through open market operations, sparked speculation that authorities might take steps to prop up the nation’s stock markets.

Back home, our manufacturing output unexpectedly fell 2.2% y-o-y in August as electronics production dropped more steeply amidst sluggish global demand and CIMB cautioned that trade-reliant Singapore could dip into a technical recession with the third straight month of decline.

Amongst the actives, SingTel hogs the attention after controlling shareholder, Temasek Holdings, sold 400 million shares, or 2.5% of the company, prompting its shares to fall 3.9% at $3.20 on 26 Sep-12. Meanwhile, although the Thai group had pledged to vote in favour of the Asia Pacific Breweries sale, it is expected to reject the capital-reduction exercise, leaving Fraser & Neave’s fate uncertain.

Despite the slew of monetary easing efforts, when and how the global economy will recover remains an open question. With the troubles of Europe never too far away, it is time to brace for a period of renewed volatility and uncertainty unless solid signs of an economic recovery emerge.

Singtel  3.500 +0.02 +0.57%   
Business: Asia's leading communications group. [FY19 Turnover] Mobile Comm (31.1%), Data & Internet (19.2%), Infocomm Technology (17.5%), Sale of Eqmt (16.5%), Digital Biz (7.2%), Fixed Voice (5.2%), Pay-TV (2.1%), Leasing (0.8%), others (0.4%).

Insight: May-19, FY19 operating revenue remained flat at $1... Read More
Thai Beverage Public Co  0.830 -0.005 -0.60%   
Business: [FY18 Turnover] Spirits (46.1%), beer (41.1%), non-alcoholic beverages (7%), food (5.8%).

Insight: May-19, 1H19 revenue rose 26.1% to THB142.6b mainl... Read More
Fraser & Neave  1.710 -0.020 -1.16%   
Business: [FY18 Turnover] Dairies (60%), beverages (25.4%), printing & publishing (14.6%).

Insight: Apr-19, 1H19 revenue inched 1.9% to $931.8m underp... Read More

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