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Headline-Driven Markets Trade With Cautious Optimism
Singapore Market Commentary | 25 October 2013
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By: Ong Qiuying
Articles (131) Profile

Markets remain dominated by headlines for the past fortnight as they enjoy some form of relief rally for a while following a deal reached to end the US government shutdown coupled with the diminishing likelihood of tapering this year in view of a mixed bag of economic data. However, it was marked by cautious optimism as Congress approved only a temporary deal to raise the federal debt-ceiling till early 2014 and the country could be embroiled in a similar situation again if the underlying budget issues persist.

Elsewhere, China’s gross domestic product grew by 7.8% y-o-y in 3Q13, in line with market expectations and faster than 2Q13′s 7.5%. The HSBC flash Purchasing Managers’ Index also rose to a 7-month high of 50.9 in October, up from 50.2 in September, implying that China’s growth recovery is consolidating moving into 4Q13.

Nonetheless, the good news were not enough to lift sentiments as China’s benchmark 7-day repurchase rate surged after the central bank declined to inject cash for a third day, on concerns that loose liquidity might fuel risky credit growth with the uneven reining-in of its property market as well as news that Chinese banks have raised their bad-debt provisions.

Turning to the Singapore market, inflation eased to 1.6% in Sep after climbing 4 consecutive months, largely due to a decline in transportation costs as well as the latter’s high base effect. The Straits Times Index closed the fortnight at 3,205.24 with the spotlight on the speculative penny stocks, Asiasons Capital, Blumont and LionGold, as they soared after SGX lifted their trading curbs. The shares remain among the top 20 actively traded stocks through the past week but plunged more than 15% in intra-day trading on 25 Oct-13 after the MAS and SGX said, in an email interview with Reuters late 24 Oct-13, that they are conducting an extensive review of the stocks’ trading activities.

Meanwhile, the corporate earnings season is expected to take centre stage after kicking off with the REITs sector.

Qiuying oversees the construction and real estate investment trusts sectors at Shares Investment.

Please click here for more information about this author.

Attilan Group  -- -- --   
Business: Co engages in alternative asset investment and management activities. [FY17 Turnover] Investment management (65.7%), pre-school (20.6%), media sales (11.7%).

Insight: Aug-18, 2Q18 revenue increased slightly by 4% as C... Read More
Blumont Group  0.003 +0.001 +50.00%   
Business: Co provides contract sterilization and polymerization services. [FY18 Turnover] Sterilisation (99.3%), property (0.7%).

Insight: Feb-19, FY18 revenue increased 6%. Total expenses ... Read More
LionGold Corp  0.001 -- --   
Business: Co has interests in gold mining and exploration companies in Australia and Ghana.

Insight: Feb-19, 9M19 revenue rose 26.8% as a result of inc... Read More

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