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Straits Times 3,116.84 -10.90 -0.35%
Hang Seng 26,173.59 +124.87 +0.48%
Dow Jones 26,252.24 +49.51 +0.19%
Shanghai Composite 2,897.14 +13.71 +0.48%
Editorial Desk
Editorial Desk | 07 December 2012
By: Xavier Lim
Articles (51) Profile

Asian stocks shifted towards the downside when the Shanghai Composite Index fell below the 2,000-point psychological barrier. Fears that China’s economic reform will further hurt its growth and deterioration in the earnings of Chinese companies continued to push China’s stock market to a fresh four-year low despite China’s manufacturing Purchasing Managers’ Index (PMI) coming in stronger in November than that of October.

But the Chinese index did not stay too long below the psychological level. It rebounded off its four-year low to break through the 2,000 mark after the new Communist Party chief Xi Jinping called for policy continuity and stability ahead of the party’s central economic planning meeting this month.

Adding to the stock markets’ volatility was the on-going argument between the Democrats and Republicans with regards to the “fiscal cliff”. Meanwhile, gold price fell below US$1,700 an ounce despite the US dollar weakness. The drop in the US dollar-denominated commodity, gold along with the US dollar probably signalled investors’ concern over the Chinese demand for gold.

Over in Australia, the Reserve Bank of Australia cut its key cash rate by a quarter percentage point to 3 percent, matching a low hit in the aftermath of the global financial crisis, on fears that Australia’s economy is deteriorating.

Back home, Singapore’s November’s PMI improved slightly to 48.8 from 48.3 in October. However, the manufacturing activity remained under the 50-point threshold, signalling a contracting manufacturing economy.

Over the two weeks, blasting the headline news has been the Muddy Waters-Olam saga. The battle between the two firms has raised questions on the complexities of Olam’s business model as well as Muddy Waters’ real intentions behind. In our cover story this issue, we take a look at the flurry of exchanges over the “attacks and defences” from both parties that have drove Olam’s shares into erratic swings. Details are from page 7.

Next, we shift our focus to examine the prospects of SIIC Environment Holdings, formerly known as Asia Water Technology. The company has advanced to the Main Board of Singapore Stock Exchange and is looking forward to obtaining strong support from its parent company, Hong Kong-listed and China state-owned conglomerate Shanghai Industrial Holdings. Turn to page 10 for more insights.

Happy reading!

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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