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Can 2Q13’s Earnings Season Help Lift The Markets?
By: Louis Kent Lee
Articles (199) Profile

So, where are we exactly? I mean, we have been looking at wild swings these past couple of weeks across markets. This was made even more apparent with the strong statement conveyed by the Federal Reserve pertaining its reluctance of more asset purchases unless it deems the economy bad enough for it to do so and intervene with such action, famously known as quantitative easing.

Despite that, US stocks were seen snatching up gains for six days in a row. Depending on the consistency of earnings result, this is deemed to be one of the most important things investors are watching out for this quarter for the stock market. As a matter of fact, markets were lifted higher after the minutes from Federal Open Market Committee revealed that many of the members wanted to see more signs that employment is improving before cutting asset purchases.

For the first time in 2013, China reported an unexpected fall of 3.1 % in exports. This was a huge contrast compared to the 25 % gain figure seen in January 2013. The big miss was due to an underestimation of the slowdown in demand, the stronger yuan and rising wages. Imports also reflected a 0.7% drop. Analysts however still believes that China will be able to reflect a growth of some 7% this year.

Shifting the focus back to the Lion City, Singapore Press Holdings (SPH) has announced plans to raise up to $504 million in a real estate investment trust (REIT) after lodging its preliminary prospectus with the Monetary Authority of Singapore in connection with the initial public offering on July 9.

SPH intends to distribute a special dividend of $0.18 after the listing and plans to offer a yield of as much as 6%.

Within the horizon of the next two weeks companies like Keppel REIT, CapitaLand, SPH and M1 will be releasing their earnings results, which will kick off the earnings season. A good start could mean more buoyancy and more positivity in the market. So watch on with us, as we see who made the cut, and who didn’t.

Louis is a qualified accountant with the ACCA, and is the Research Editor at Shares Investment magazine.

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